Monday, September 25, 2017

How Large of a Down Payment Should I Make on My Home Purchase?

The Numbers vs Emotion argument…
Meet Marcus and Kelly – they are a young couple, selling their home and buying a new one. Being that it’s a seller’s market, Marcus and Kelly will do very well and walk with $100,000 from their sale.
So, what do they do with the money? Do they put some, half or all of the funds down on the new home purchase? We are going to break down what the best decision is, by the numbers, for the purchase of their $250,000 “forever home”.

Option A
(20% down)
Option B
(ALL Funds)
LOAN AMOUNT$200,000$200,000
DOWN PAYMENT$50,000$100,000
Marcus and Kelly have come down to option A, putting 20% down, having a $200,000 loan amount and investing the remaining $50,000. Or option B, putting the full$100,000 down, having a $150,000 loan amount and investing the difference in payment, which is $237/month.

Future Value Analysis – @ 8% Return
Option AOption AOption BDifference
YEAR 10$85,542 (less additional $237/mo)$43,358$39,184
YEAR 15$122,686 (less additional $237/mo)$82,011$40,675
YEAR 30 $461,466 (less additional $237/mo)


To properly analyze, Marcus and Kelly are assuming an 8% return on their funds. Option A returns are adjusted for the higher mortgage payment and option B assumes that the difference in mortgage payments is invested each month.
By using the same assets, with proper investment advice, option A winds up giving Marcus and Kelly an additional $39,000 by year 10, and $100,000 over 30 years, just by properly applying the concept of time value of money.
So to conclude, provided the difference in payment won’t keep you up at night and you have time for your investments to grow, then only put 20% down and invest the rest with a knowledgeable investment adviser.

Call us today to find out more. It costs zero to find out! 

Tuesday, June 20, 2017

Why a Renovation Mortgage Could be Perfect for Your Purchase

Numbers you should remember: $110k, $50k and $220k

In this 2017, inventory challenged market, a renovation mortgage is becoming more and more of an option for you to turn an ordinary house into the home of your dreams.

What is a Renovation Mortgage? 

Simply (as possible) put, a renovation mortgage is a transaction where you finance in the improvements. However, in order for the lender to take on the risk, the funds are held in escrow and disbursed in progress payments as the work is completed, phase by phase.

The name of the products are either a 203k (FHA) or Homestyle (Conventional)

So, how does a renovation mortgage work? 

In the case of a purchase, you can buy a beaten down home, usually a foreclosure or a home that is dated or otherwise in some state of disrepair.

Purchase Price $110,000

You can get a bid from a contractor for say $50,000 to improve the home to your specifications.

This means you’re financing $160,000.

After the home is complete, the home then becomes worth say $220,000.

Why might this be the perfect option for you in today’s housing market? 

In every corner of the real estate market, all we are hearing is “inventory shortage, inventory shortage”! This option can help you turn the house that no one wants, into the home you love!

Wednesday, May 31, 2017

Making lives better, one home at a time

James Vukich
Senior Loan Officer
NMLS# 1087184
Looking to buy a home? Or, wondering what a refi would mean for you? James is your guy! 

"I understand buying a home is one of the most important decisions you will ever make and I take pride in the fact that you are trusting me to help walk you through the process.

Please feel free to call me ANYTIME - this includes evenings and weekends as well.  I'm here when it's convenient for you!

I have full support from our Homestead Financial Mortgage office, where the entire loan process from pre-approval to underwriting, closing and funding is handled locally under one roof in Chesterfield, MO.  We also do not charge an appraisal fee on new home purchases, saving you an additional $400-$500 on your transaction!"

For more info, call James today!
or apply online:

Making lives better, one home at a time! 

14897 Clayton Road | Chesterfield, MO 63017 | NMLS# 222524

Wishing all had a great Memorial Day

Hoping everyone had a great Memorial Day! 

All gave some and some gave all — Remember them, as well as their families, this Memorial Day. THANK YOU for your service!
Honoring all who served, Homestead Financial Mortgage

Friday, May 19, 2017

Buying a Home for less per Month than your Rent by the Numbers

Buy a home for less than mortgage

This statement always raises an eyebrow…or 10, when I say in this market, with just a moderate down payment, you can buy a home for less than what you pay in rent!

This is how it comes out by the numbers:

Principal and Interest  @4.25 817.88
Taxes @1.25% 182.29
Insurance  100.00
Mortgage Insurance    81.74
Total     $1,181.88

Lets compare that to a reasonable rent payment in this market of $1,250. This is how we come to prove the statement that you can buy a home for less than your rent.

Even further, after the tax benefits of mortgage interest, and the doors which this immensely valuable deduction opens, the net effect means an amazing savings to the home buyer over renting. 

For more information, check out HomesteadU