Advantages of being a homeowner versus a renter
There are many more benefits in being a homeowner versus a renter. In many cases, a renter can convert to being a homeowner with very little money down and their monthly housing payments are the same as being a renter and in some cases, their housing mortgage payment can be lower than their monthly rent payments. Another major advantage of being a homeowner versus a renter is that the homeowner has the potential of accumulating equity in their home as time passes because a portion of their mortgage payment gets applied towards principal. Home prices have dropped to historical lows due to the real estate and credit meltdown of 2008 and the chances of appreciation is on the homeowners favor if they buy homes at today’s low values. There are many places in California, Florida and Illinois where home buyers are purchasing homes above the asking price. With advantages are disadvantages. One major disadvantage in being a homeowner is that you need to maintain your home and when things like furnaces, air conditoners, appliances, and fixtures break down, you as a homeowner are responsible for the repairs. Cash reserves is not just a requirement as a homeowner, but cash reserves for homeowners are a requirement.
Cash Reserves for Homeowners
I specialize in Condotel Financing, First Time Home Buyer purchase mortgage loans, bad credit home loans, high debt to income ratio mortgage loans, and regular conventional and standard mortgage loans as well as super jumbo mortgage loans in California, Florida and Illinois. The majority of mortgage lenders do not require cash reserves for homeowners. Condotel mortgage lenders will definitely require cash reserves for homeowners.
Cash Reserves Required For Portfolio Condotel Financing
A condotel mortgage lender will require on year’s of cash reserves for homeowners. The cash reserves for homeowners include principal, interest, taxes, insurance, homeowner association dues, and other monthly housing fees. Condotel mortgage lenders require that the cash reserves for homeowners be at least three months in cash and the remaining nine months in liquid assets such as stocks, bonds, and/or retirement accounts.
Cash Reserves For Homeowners Always Recommended Even Not Required By Lenders
For other mortgage lenders, cash reserves for homeowners are normally required but I strongly suggest that you have a cash reserve fund for your own protection. If you live in the Midwest or somewhere where you have cold winters and have your furnace go out on you during the middle of winter, you will need several thousand dollars for a new furnace. Same case if you live where there is well and septic and your well breaks down, plan on forking over $10,000 or more for a new well.
Home Inspection is strongly recommended prior to closing
I strongly recommend that you get a home inspection prior to closing on your home. Electrical, plumbing, and heating/air conditioning mechanicals can be quite costly to repair and you want to avoid in purchasing a home that have signs of problems with high ticket items. Appliances and well and septic systems will cost thousands of dollars for repairs. Cash reserves for homeowners should be initiated the day you close on your home.