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Increasing Your Down Payment!

by Desi Sowers

You can save thousands in interest by putting money toward your home.

For prospective home buyers who have annuities, selling those future payments for a lump sum of money now can help them avoid getting locked into a mortgage black hole.

First-time home buyers often save money for years to collect enough for a down payment on their house. Once they have that 5 or 10 percent of the house value in the bank, they settle follow through by agreeing to 15 to 30 years of monthly payments on the mortgage, one that costs a fortune in interest.

What many don’t realize is that increasing a down payment for a $300,000 home by just 5 percent can reduce the mortgage by as much as $30,000. Putting money from an annuity sale toward a down payment offers significant long-term savings on your home – decreasing the amount paid for interest, loan principal and monthly payments.

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Affording a Down Payment for Your Dream House

For most people, the greatest obstacle for getting a new home is the down payment. While mortgage payments might be easily figured in to a budget, putting together enough cash to buy takes time and hard work. Buyers generally pay a minimum of 3.5 percent (for federal housing loans) to 20 percent for down payments. For a $200,000 home, this means coming up with at least $40,000 to bring to closing. As people still recover from the recession, saving $40,000 while still keeping up with regular bills and living expenses seems like an impossible feat.

Unfortunately, paying less than 20 percent has other financial consequences. Lenders can (and almost always do) require you to purchase private mortgage insurance, which increases your monthly expenses and the total you are paying for your home. Additionally, they may restrict you to mortgages with high interest rates or even deny your application.

How Much Are You Actually Paying?

Let’s look at an example. You’ve found the home of your dreams for $300,000 and you’re ready to commit to a 30-year mortgage. If you can afford a down payment of $30,000 (which would be 10 percent of the cost), then you will need a mortgage of $270,000.   What kind of terms can you expect from a lender?   Banks look at a variety of factors to determine your loan eligibility and your credit-worthiness. They collect credit scores, employment history and the size of your down payment to determine your interest rate. According to The Washington Post, in 2014 the average interest rate was 3.99 percent for a fixed-rate loan. With a 10-percent down payment, an applicant with excellent credit would likely be able to qualify for this rate.

With the help of a mortgage calculator, you can find out how much this will cost. In this example, monthly payments are $1,287.47.   Here is a price chart based on a 30-year mortgage for a $300,000 home:

30-year mortgage at an interest rate of 3.99%

Mortgage (Down Payment) Monthly Cost Interest Paid
$285,000 ($15,000) $1,299.37 $182,909

Notice the total interest paid comes to nearly $200,000. For that amount you could buy another house!

The Difference Annuity Cash Can Make

Using money from your annuity to bulk up your down payment can be a game-changer. The larger down payment reduces the necessary principal for the loan and decreases the home loan to value ratio. Because of this, a bank may qualify you for a lower interest rate.   For these examples, we used an interest rate of 3.625 percent. This chart shows how every increase in the down payment significantly decreases the total interest paid.

30-year mortgage at an interest rate of 3.625%

Mortgage (Down Payment) Monthly Cost Interest Paid
$285,000 ($15,000) $1,299.37 $182,909
$270,000 ($30,000) $1,231.34 $173,282
$255,000 ($45,000) $1,162.93 $163,655
$240,000 ($60,000) $1,094.52 $154,028

Now, if you are an annuity owner and you pull out $15,000 from selling annuity payments, you can increase your down payment by 5 percent, making a down payment of 15 percent. This reduces the mortgage total and the total interest is now $163,655.10. If we compare the interest on both mortgages, the difference between the old and new mortgages is nearly $30,000 — $193,487.47 – $163,655.10 = $29,832.37.   If you double your down payment to 20 percent, and kept the same interest rate, your savings will be closer to $40,000 — $193,487.47 – $154,028.32 = $39,459.15.

Eliminating the Waiting Period

Bottom line: If you own an annuity or structured settlement and want to own a home, don’t go through another decade of saving or sit around until the date your annuity payments are scheduled. And avoid the mistake of making a small down payment. By paying more up front, you reduce the home loan-to-value (LTV) ratio, which increases your eligibility for a mortgage and the likelihood of receiving approval for a better interest rate.

By selling annuity payments – using a resource that is already at your disposal – and putting the money toward your home, you can save tens of thousands in interest. Let your neighbor be the one with the 10-percent down payment, while you pay 20 percent and spend the next 30 years with $200 more in your pocket every month.

Courtesy of Alanna Ritchie Learn more about Annuities 

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Bring the farmer and the horse lover out to this pastoral setting. A 65 acre farm with everything you could want in a residential, agricultural or recreational property. Including multiple outbuildings, a horse barn with four stalls, hay lofts and tack room, fenced pastures, a spring fed pond and a mini orchard. Let yourself get swept away in the long range mountain views adorning this farm land with an expansive brick Cape Cod. Entertain in the inviting formal rooms where beautiful picture window views are sure to sway your guests to relax.  A southern style family room is ideal for kicking back and submerging yourself in the panoramic views. Featuring a wet bar, stone fireplace, exposed beams and easy access to a fabulous brick patio this is an entertainers delight. With miles of granite counter tops, an abundance of oak cabinets and a huge center island this designer kitchen allows for cooking and serving all in one expansive space. The main level master suite offers multiple closets, private bath and a separate dressing area that is sure to impress. An upper level guest suite plus two additional spacious bedrooms make the upstairs a perfect place to rest at days end. A fabulous covered patio is a place one could happily linger throughout the day while enjoying gorgeous mountain views. Bring the whole family out to see this 65 acre paradise. We are sure they will want to stay. Additional Details!

You don’t have to just visit; you can live here and enjoy Virginia’s growing economy and vacation-like lifestyle! With easy access to I-81 you can appreciate a prime example of why New River Valley VA is such a desired place to live and play. This Christiansburg VA  home is just steps to  shopping, nightlife, VA Tech and recreational activities.

Desi Sowers has distinguished herself as a leader in the New River Valley real estate market. Desi assists buyers looking for New River Valley real estate for sale and aggressively markets New River Valley homes for sale.

Desi brings with her a keen eye for the details of buying or selling a New River Valley home and seemingly boundless determination and energy, which is why her clients benefit from her unique brand of real estate service. Rooted in Tradition, Focused on the Future – Desi Sowers will help make the most of your New River Valley real estate experience. Give her a call today, 540-320-1328, and discover the difference she can make during your family's move.

2015 A Year of Housing Opportunity

by Desi Sowers

As the economy continues to improve, more and more Americans will qualify for homeownership, allowing more families to obtain the American Dream.

2015: A Year of Housing Opportunity | Simplifying The Market

Many believed that when the housing market crashed, so too would the desire of American’s to own a home again. Many reports have shown that, especially among younger generations, the American Dream of homeownership is still very much alive.

Julián Castro, Secretary for HUD, recently summed up what it means to own a home in a speech at the National Press Club.

"Homeownership is still the cornerstone of the American Dream — a fact you can see in the lives of everyday folks.

It’s a source of pride. It’s a source of wealth, providing both a nest and a nest egg. And it strengthens communities and fuels growth in the overall economy."

Castro appropriately named his speech, “2015: A Year of Housing Opportunity”, a theme that rang true throughout.

“Opportunity is not an abstract concept - it's a path to a more prosperous life, and housing often serves as its foundation. T.S. Elliot once said that "home is where one starts from."

“A home is often a primary source of wealth in a family… Having a home is generational way to pass that wealth on. We want people responsible enough to own a home to have that opportunity.”

Bottom Line

“Over the years-through decades of economic downturns and wars-the American people have always held on to this Dream, and always will.”

As the economy continues to improve, more and more Americans will qualify for homeownership, allowing more families to obtain the American Dream.

Attaining the American Dream: 5 Financial Reasons to Buy

by Desi Sowers

It also makes sense financially.Attaining The American Dream: 5 Financial Reasons To Buy | Keeping Current Matters Heading into 2015 many people have their sights set on buying a home. The personal reasons differ for each buyer, with many basic similarities. Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership his paper - The Dream Lives On: the Future of Homeownership in America.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Price Reduced! 4617 Webbs Mill Road Riner VA 24149

by Desi Sowers
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Nestled on 1.33 serene wooded acres with easy access to the New River Valley and Roanoke VA 4617 Webbs Mills Road is the perfect place to call home. Panoramic views of mature trees and endless skylines are just waiting for your enjoyment. Come on in toast your toes by the massive stone fireplace in the living room. A partially finished basement with a full bath and laundry facilities is ideal for expandable living space.  A double covered carpet is ideal for grilling and chilling with friends. A little lipstick and rouge, spackle and paint will make this solid 1970’s basement home perfect for your family. Call today to steal this deal!

You don’t have to just visit; you can live here and enjoy Virginia’s growing economy and vacation-like lifestyle! With easy access to I-81 you can appreciate a prime example of why New River Valley VA is such a desired place to live and play. This Riner VA home is just steps to shopping, dining, nightlife, VA Tech and recreational activities.

Desi Sowers has distinguished herself as a leader in the New River Valley real estate market. Desi assists buyers looking for New River Valley real estate for sale and aggressively markets New River Valley homes for sale.

Desi brings with her a keen eye for the details of buying or selling a New River Valley home and seemingly boundless determination and energy, which is why her clients benefit from her unique brand of real estate service. Rooted in Tradition, Focused on the Future – Desi Sowers will help make the most of your New River Valley real estate experience. Give her a call today, 540-320-1328, and discover the difference she can make during your family's move.

SOLD! 1385 Red Hawk Run Christiansburg VA 24073

by Desi Sowers
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Breathtaking views and a gorgeous home 1385 Red Hawk Run is a dream come true!  Situated on 6 acres in the popular Smith Creek subdivision where homeowners have use of a 75 acre protected area that includes a pond and trails for horseback riding, 4 wheelers and hiking.  Let yourself get swept away by the serene setting of this stunning Colonial home.  Offering panoramic sun drenched views from multiple entertaining areas this pretty home shows like a magazine layout. Quality features include tiled floors, granite counters, hardwood floors, pocket doors, tray ceilings, tiled baths, recessed lighting, trendy light fixtures, crown molding, fireplaces and a brick/vinyl façade.  A masonry fireplace flanked by picturesque window views is an alluring place to soak in glorious views of rolling hills and mountains. Beautiful designer gourmet kitchen features granite counters, custom cabinets, tiled backsplash, smooth top range plus an extended dining area with deck access. A built in command center plus a spacious laundry room makes this sparkling home ideal for large families. A true 5 bedroom home with a pampering master suite and generously sized secondary bedrooms ensures a place to rest for all.  The kids and kids at heart are sure to enjoy the cheerful basement with outside access, easy care flooring, a bedroom, bath and a large den this is fantastic flex space.   Double garage plus a picture perfect red barn stores mowers, bikes, tools and more.  Call today to this Christiansburg VA home for sale!

You don’t have to just visit; you can live here and enjoy Virginia’s growing economy and vacation-like lifestyle! With easy access to I-81 you can appreciate a prime example of why New River Valley VA is such a desired place to live and play. This Christiansburg VA  home is just steps to  shopping, nightlife, VA Tech and recreational activities.

Desi Sowers has distinguished herself as a leader in the New River Valley real estate market. Desi assists buyers looking for New River Valley real estate for sale and aggressively markets New River Valley homes for sale.

Desi brings with her a keen eye for the details of buying or selling a New River Valley home and seemingly boundless determination and energy, which is why her clients benefit from her unique brand of real estate service. Rooted in Tradition, Focused on the Future – Desi Sowers will help make the most of your New River Valley real estate experience. Give her a call today, 540-320-1328, and discover the difference she can make during your family's move.

New River Valley VA Home For Sale
105 Highview Trail Newport, VA 24128

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Beautiful country cottage on 5 acres will take you away from crowds yet offer a short drive to Blacksburg VA shopping, dining and nightlife or a short hike to the Appalachian Trail. Quality features include new heat pump, new hot water heater, updated bathroom, a new metal roof with sprayed foam insulation, gorgeous knotty pine floors and paneling plus tiled floors in the wet areas. An inviting living room offers the ultimate place for watching the ever changing light and colors of the outdoors. A spacious kitchen provides an abundance of cabinet and counter space plus a smooth-top range. The delightful dining room with French door access to the outdoors expands your entertaining space. Two generously sized bedrooms and tiled bathrooms are sure to impress. Relax on the covered front porch or the multi-tiered deck where you will be captivated by the magnificent mountain vistas that stretch for mile upon mile. Numerous fruit trees including Apple, Cherry and Walnut with established berry bushes plus beautiful White Oak trees which draw natural deer trails is perfect for the gardener in you.  An incredible piece of paradise place to slip away from the hustle and bustle of everyday life while enjoying farming, hunting or your own livestock. Riding lawn mower and standing freezer convey.  Here is your chance to own a piece of paradise!

You don’t have to just visit; you can live here and enjoy Virginia’s growing economy and vacation-like lifestyle! With easy access to I-81 you can appreciate a prime example of why New River Valley VA is such a desired place to live and play. This Newport VA home is just a short drive to shopping, nightlife, VA Tech and recreational activities.

Desi Sowers has distinguished herself as a leader in the New River Valley real estate market. Desi assists buyers looking for New River Valley real estate for sale and aggressively markets New River Valley homes for sale.

Desi brings with her a keen eye for the details of buying or selling a New River Valley home and seemingly boundless determination and energy, which is why her clients benefit from her unique brand of real estate service. Rooted in Tradition, Focused on the Future – Desi Sowers will help make the most of your New River Valley real estate experience. Give her a call today, 540-320-1328, and discover the difference she can make during your family's move.

 

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Handsome confederate style home situated on over an acre of flat lush lawn. Dual zone heat pump, vinyl siding, vinyl windows plus a newer metal roof makes this charmer move-in ready. Dynamic Dublin location near Claytor Lake, Randolph Park, schools and shopping plus the 28 acre common community park is a short stroll along the tree lined sidewalks. A grand foyer sets the scene for a vast formal living room and banquet sized formal dining room with tons of natural lighting and gorgeous oak hardwood floors. A charming kitchen offers ample cabinet and counter space, a pantry, a smooth top range, dishwasher, refrigerator. A spacious master bedroom and two secondary bedrooms offer a soothing place to rest at days end. Two car garage, full basement and floored attic offer fantastic storage. Let the peace and quiet sweep you away on the deck overlooking acres of mature trees.

You don’t have to just visit; you can live here and enjoy Virginia’s growing economy and vacation-like lifestyle! With easy access to I-81 you can appreciate a prime example of why New River Valley VA is such a desired place to live and play. This Dublin VA  home is just steps to  shopping, nightlife, VA Tech and recreational activities.

Desi Sowers has distinguished herself as a leader in the New River Valley real estate market. Desi assists buyers looking for New River Valley real estate for sale and aggressively markets New River Valley homes for sale.  

Desi brings with her a keen eye for the details of buying or selling a New River Valley home and seemingly boundless determination and energy, which is why her clients benefit from her unique brand of real estate service. Rooted in Tradition, Focused on the Future – Desi Sowers will help make the most of your New River Valley real estate experience. Give her a call today, 540-320-1328, and discover the difference she can make during your family's move.

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Original owner since built back in 1973 this solid rock house shows pride of ownership!   Situated on  1.24 acres with a peaceful country feel yet just a few miles to schools, shopping and restaurants   6943 Depot Road is a must see.  A finished basement offers additional living or guest space plus an abundance of storage.  Relax in the living room where a picture window offers glorious mountain views. A huge kitchen features plenty of Walnut cabinets, double wall ovens, lots of counter space, a serving bar and a cozy breakfast nook. Generously sized bedrooms and tiled baths are sure to please. The double lot yard is super nice with pear and peach trees plus a Concord grape vine and long range mountain views. Escape the hustle and bustle of daily life just by coming home to this serene setting. Make you appointment today!

You don’t have to just visit; you can live here and enjoy Virginia’s growing economy and vacation-like lifestyle! With easy access to I-81 you can appreciate a prime example of why New River Valley VA is such a desired place to live and play. This Belspring VA home is just steps to shopping, dining, nightlife, VA Tech and recreational activities.

Desi Sowers has distinguished herself as a leader in the New River Valley real estate market. Desi assists buyers looking for New River Valley real estate for sale and aggressively markets New River Valley homes for sale.  

Desi brings with her a keen eye for the details of buying or selling a New River Valley home and seemingly boundless determination and energy, which is why her clients benefit from her unique brand of real estate service. Rooted in Tradition, Focused on the Future – Desi Sowers will help make the most of your New River Valley real estate experience. Give her a call today, 540-320-1328, and discover the difference she can make during your family's move.

Displaying blog entries 51-59 of 59

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