Homeownership Better Way of Producing Wealth

According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index homeownership is a better way to produce greater wealth, on average, than renting.

The BH&J Index is a quarterly report that attempts to answer the question:

Is it better to rent or buy a home in today’s housing market?

The index examines the entire US housing market and then isolates 23 major markets for comparison. The researchers use a “‘horse race’ comparison between an individual that is buying a home and an individual that rents a similar quality home and reinvests all monies otherwise invested in homeownership.”

Ken Johnson Ph.D., Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states:

“The nation as a whole is in buy territory. Continued near record low mortgage rates, unsteady stock market performance, and rents (on average) now out pacing the cost of ownership (maintenance, taxes, insurance, etc.) all combine to favor owning and building wealth through home equity over renting and reinvesting in a portfolio of stocks and bonds.”

Dallas, Denver and Houston currently remain deep in rent territory but, “there is some degree of good news from these markets for homeowners as the cost of renting is now increasing at a faster rate than the cost of homeownership — reducing the advantage of renting over buying.”

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now.

To Find Out More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.

Original Source: Keeping Current Matters

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First Time Homebuyer Checklist

Buying your first home is an exhilarating experience! It may mean you’re growing your family or you’ve finally gotten that promotion that will allow you to make a big investment. However, it can also be a very stressful time. Through the help of your realtor, lender and other great resources, you can be fully prepared for this exciting transition. The following steps map out the best way to prepare for your home purchase:

9 Months Out

  • Check your credit score. A Federal Trade Commission study found one in four Americans identified errors on their credit report, and 5% had errors that could lead to higher rates on loans. Knowing in advance will give you time to fix any errors or raise your credit score if necessary.
  • Talk to a mortgage broker to find out what you can afford. Lenders look for a total debt load of no more than 43% of your gross monthly income (called the debt-to-income ratio). This figure includes your future mortgage and any other debts, such as a car loan, student loan or revolving credit cards. Look for a mortgage broker who will shop for a competitive loan rate for you among multiple lenders.
  • Prioritize what you want in your home and neighborhood. Unless you’re buying new construction, no home will have everything you want. In order to focus your search and find your ideal home, it’s important to know what you can and can’t live without.

6 Months Out

  • Contact your realtor to map out your timeline and discuss your goals. An agent will work in your best interest to find you the right property, negotiate with the seller’s agent and shepherd you through the closing process.

3 Months Out

  • Focus your search and start actively looking at homes. At this point, hopefully you’ve scoped out neighborhoods that interest you and browsed through potential homes online. Now your realtor will schedule times for you to go out and view the homes.
  • Work with your lender to get approved for your loan. He or she will most likely require your W-2 forms, pay stubs, tax returns, bank statements, credit card and loan statements, and more.

2 Months Out

  • Make an offer on a home. It usually takes at least four to six weeks to close on a home. If you have a firm move-out date, allow enough time to deal with any hiccups that can delay closing.
  • Get a home inspection. One of the first things you’ll do after an offer is accepted is have a home inspector look at the property. If the home inspector finds something that needs repair, that may cause you to restructure the deal and could delay closing.
  • Find a real estate lawyer. Your agent will most likely be able to recommend someone to you that he or she has worked with in the past.

1 Month Out

  • Stay in constant communication with your realtor, your lender and your lawyer. You’re in the home stretch and you want to ensure that everyone has their ducks in a row for closing.
  • Get insurance for your new home. Don’t forget to secure insurance before closing. You’ll need to provide proof of insurance on or before closing.
  • Do a final walk-through of your new home. This usually occurs the day of closing to make sure the home is in the shape you and the seller have agreed upon.
  • Get a cashier’s check or bank wire for closing. You’ll get the amount owed at closing a few days before closing so you can secure a cashier’s check or arrange to have the money wired. Regular checks aren’t accepted.

While this list might seem overwhelming, your real estate agent will be there every step of the way to walk you through it. Please feel free to reach out to me with any questions at Julia@reprealestate.com.

Information taken from Houselogic.com. Photo taken from City of Chicago. 

CLOSED 333 W. Hubbard, #2L

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333 W. Hubbard, 2L

2 Bedrooms / 2 Bathrooms

1237 Sq. Ft.

1 Garage Space

This 2 bed/2 bath River North condo was everything our buyer was looking for. It’s unique layout with an open concept kitchen and living room, large bedroom sizes and gorgeous bathrooms made for a stunning home practically tailor-made for our client – complete with a corner nook just large enough to house the baby grand piano!

This stunner is now off the market, but to view similar properties please contact grace@reprealestate.com.

Closed!

1109 N. Hermitage, #2

2 Bedrooms

2 Bathrooms

Gorgeous new condo in Wicker Park. Built in 2009, this property features luxury appliances, beautiful crown molding, a fireplace, a large deck and one garage space. Dark hardwood floors throughout and an abundance of natural light.

As REP Group agents, we respect and appreciate our client’s privacy. To inquire about pricing for similar properties in the area, please contact us directly at julia@reprealestate.com.

Closed!

2750 N. Dayton, #5

2 Bedrooms

2 Bathrooms

Location, location! Beautiful unit in the heart of Lincoln Park. This property features a fireplace, a large balcony and one garage space. Beautiful hardwood floors throughout, stainless steel appliances, granite countertops and an open layout for entertaining.

As REP Group agents, we respect and appreciate our client’s privacy. To inquire about pricing for similar properties in the area, please contact us directly at julia@reprealestate.com.

Residential and Commercial Construction Underway in Lincoln Park

Lincoln Park’s newest infrastructure is impossible to miss! While traffic is a real bummer around the Clybourn Corridor (what else is new?), the latest development – dubbed New City – will bring a bevy of shopping, restaurant and entertainment options to residents. Mariano’s, Dick’s Sporting Goods and King Bowl America are just a few of the new hot spots coming your way. According to Curbed, the 19 story residential tower is targeted to open on July 1, while the commercial sections will open throughout September and October.

Take a tour of this mega development.