Move or Remodel?

For immediate release July 11, 2011

Ready to Trade-In Your Home?
Perhaps You Should Remodel Instead! 

By Jerry R. Dudley, Jr., Business Development Specialist            
Leader One Financial

LENEXA, KS – Each year, millions of Americans move into the home of their dreams. As time goes by, families expand, kids grow older, and suddenly that home isn't quite so perfect anymore. Or perhaps you still love your home, but you really want a gourmet kitchen and a larger master bedroom. Should you start looking for a new house? Or would it be better to stay where you are and remodel instead?

Both options involve a significant investment of time and money, so it's important to take your time and make an informed decision. You'll also want to be sure to consider both the financial and the emotional sides of the equation. Let's begin by examining the financial factors involved.

Moving: A good local real estate agent should be able to assist you with estimates on these numbers.

·   How much will it cost to purchase a home that will meet your needs?

·   How much could you sell your existing home for? Don't forget to subtract the agent's commission from this total.

·   What will it cost to move? According to real estate consultant and best-selling author of Remodel or Move, Dan Fritschen, a typical move costs 10% of the value of your home.

·   How much will your property taxes increase as a result of the move?

Remodeling:

·   What projects do you want to have done and how much will they cost? An architect or general contractor will be able to assist you with these figures.

·   How much will the improvements add to the value of your home, also known as the "payback"? A local real estate agent can assist with this as well.

If the decision about whether to renovate or move were purely a financial one, then it would be quite easy to look at the numbers and come to the right conclusion. However, there are also emotional factors that come into play, and they have a value as well. Let's consider some examples.

Reasons you may want to move:

·   If you relocate to a new neighborhood, your children could attend superior schools.

·   You would like to reduce your commute or have better access to local amenities, such as restaurants and shopping.

·   You're not particularly fond of your current neighborhood.

·   Your yard is too small, and you cannot expand it.

Reasons you may want to stay and remodel:

·   You're happy with your location. It's convenient, you love your neighbors, and the schools are either excellent or are not a factor.

·   You love the layout of your home.

·   All you need is a little more space, and your home will be perfect.

Of course only you know what is truly important for your happiness, so try to use these questions as a starting point. Create a list of the pros and cons of each scenario and leave it someplace accessible, so that you and your spouse can add to it as you think of additional factors. You may also want to consider attending open houses and visiting new housing developments to see what is available and how your home compares.

Once you've completed your list and your financial assessment, it's time to draw some conclusions. Are the numbers and the emotional factors pointing you in a clear direction? If you're still feeling unsure and would like some additional assistance, you may want to read Dan Fritschen's book, Remodel or Move, or visit his website at www.remodelormove.com. Both contain a calculator that will assist you with the difficult task of quantifying the ramifications of your decision. In addition, you can learn tips to assist you with the next step, after you've determined what it will be.

If you choose to remodel, then you'll need to have a clear idea of what you want to accomplish before finalizing any details with the contractor or architect. One of the most expensive things you can do is change the project midstream.

If you decide to move, then there are low-cost improvements you can make to your existing home that will help it to sell more quickly. The kitchen and the bathrooms provide the biggest return on investment in this area.

Whether you decide to remodel or buy a new home, it's important to ensure that you have proper financing in place prior to moving forward. If you decide to purchase a home, a mortgage originator will help you to determine how much you can afford, as well as which loan package works best with your overall financial plan. In the case of remodeling, you should meet with a mortgage professional before any construction takes place. Otherwise you may severely limit the type of financing options available to you.

Additional Resources:

Remodel or Move?: Make the Right Decision, by Dan Fritschen

Jerry R. Dudley, Jr is affiliated with Leader One Financial, a Licensed Mortgage Bank,Missouri & Kansas Department of Real Estate.

Renters Have Much to Gain

For immediate release July 8, 2011

A Qualified Mortgage Consultant Can Outline Your Options
Renters Have Much to Gain by
Pursuing Home Ownership

By Jerry R. Dudley, Jr., Business Development Specialist
Leader One Financial

Lenexa, KS – Buying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But the rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages.

Yes, there are certain responsibilities associated with owning a home. Landlords will often argue the benefits of renting, and for obvious reason. If you are renting, you’re helping them make their mortgage payment.

The numbers are staggering if you look at it this way. If you are paying $1,000 per month for an apartment, and you know your rent will increase 5% every year, then over the next five years you will pay your landlord $66,309. If you are currently renting a house, you may be paying much more than that each month. Either way, you gain no equity by shelling out this monthly housing expense and you certainly won’t benefit when the property value goes up!

However, if you were to purchase your own home or condominium, you would be on your way toward building equity. By choosing a fixed-rate loan program, you can have the comfort of knowing that your monthly mortgage payment will never go up. In fact, you would have the option of refinancing to a lower interest rate at some point in the future should interest rates drop lower than the rate you’d currently be locked in at, and this would cause your monthly mortgage commitment to go down.

And not only would your own home give you added space, your own back yard and overall privacy—home ownership would also give you some tax advantages. Depending on your tax bracket, owning a home is often less expensive than renting after taxes. Interest payments on a mortgage below $1 million are tax-deductible, and your mortgage consultant should help you evaluate the tax advantages of various loan scenarios, and share this information with your tax consultant to glean feedback on your behalf.

To find the loan program that is right for you, your mortgage consultant will need to evaluate your monthly household income, current assets and savings, as well as any monthly obligations you may have for credit card payments, car payments, child support, etc. These prequalification factors, along with the report of your credit score, will determine how much house you can afford and what interest rate you will pay for financing. It is also important to let your mortgage consultant know what your future goals are, because this will help narrow down which loan option is the best fit for your long-term needs.

There are many different types of loan programs available, including "low" down payment mortgage programs. The most common and beneficial loan for people buying their first home is the FHA loan, which only requires a 3.5% down payment. In addition, FHA allows a seller to cover up to 6% of a buyer's closing costs which really helps decrease the amount of money it takes to buy a home. Many people also don't know that FHA allows the lowest
credit scores of any loan available today, only needing a 640 score in most cases.

If there is any time to buy it is NOW! Why? Because home prices are low today. Low home values are surely not good for people selling homes but they are great news for people wanting to buy a home. Don't miss this opportunity to take advantage of the current market before home values rise.



Jerry R. Dudley, Jr. is affiliated with Leader One Financial, a Licensed Mortgage Bank, Missouri, Kansas, Nebraska, Iowa Department of Real Estate. Jerry Dudley, Jr. hosts Home Buyer’s Seminars which are open to the public at 13600 W. 95th Street, Lenexa, KS. 66215. Seating is limited. To reserve your seat at the next event, call 913-677-2781 to RSVP and obtain a free copy of Jerry’s Home Buyer Handbook.



SUBMITTED BY:
Jerry R. Dudley, Jr.
913-677-2781
FAX: 913-647-7247
EMAIL: jerrydudleyjr@leader1.com