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Affordable Housing / Housing Opportunity |
Home Ownership Matters
There’s a reason home ownership is called the American Dream. People aspire to home ownership for the financial and social benefits it conveys. Our government supports home ownership because it’s good for communities and the nation’s economy. Home ownership has a significant impact on net worth, educational achievement, civic participation, health, and overall quality of life. And, home ownership helps create jobs—lots of them—right here at home.
Home Ownership Matters Video: http://link.brightcove.com/services/player/bcpid1785312249?bclid=1740033302&bctid=664750407001
Social Benefits of Home Ownership
Being a home owner is more than just having a roof over your head. Home ownership instills feelings of comfort, security, stability and pride. However, in addition to these important benefits are substantial social benefits for families, communities and the country as a whole. A few of these benefits are:
Financial Benefits of Home Ownership
Affordable Housing & Housing Opportunity
Market Conditions are complex. For some, the economy has caused financial hardship, and for others the economy is creating opportunities. For those who are opportunistic, the current market conditions have created the most affordable home buying period in over 20 years.
The following two tables demonstrate how an opportunistic home buyer can purchase more home value, at a standardized monthly payment, with the decline in interest rates in the last 10 years.
Based on a 5% down payment for 30 year fixed mortgage. Principle, interest, taxes and insurance.
Reference Year Monthly Payment Interest Rate Buying Power 2011 $960 3.875% $145,000 2010 $960 4.5% $136,000 2009 $960 5.0% $130,000 2004 $960 6.0% $120,000 2001 $960 7.0% $112,000
Based on a 20% down payment for a 30 year fixed mortgage. Principle, interest, taxes and insurance.
Reference Year
Monthly Payment
Interest Rate
Buying Power
2011
$1,450
3.875%
$275,000
2010
$1,450
4.5%
$265,000
2009
$1,450
5.0%
$250,000
2004
$1,450
6.0%
$222,000
2001
$1,450
7.0%
$202,000
The next table illustrates a purchase of a 3BR, 2 Bath, 2 Car Garage Home from 2000 to 2012. Although the overall home values have increased since the year 2000, the similar home in 2012 is actually more affordable today than it was in the year 2000, due to declining interest rates.
Comparison based upon the average price of a similar home in the referenced year. Loan terms are quoted at the average interest rate for the referenced year, with a 20% down payment.
| Referenced Year |
2000 |
2005 |
2010 |
2012 |
|
30 Year Fixed |
30 Year Fixed |
30 Year Fixed |
30 Year Fixed | |
| Loan Principal |
$90,320 |
$122,760 |
$123,600 |
$127,160 |
| Annual Percentage Rate |
7.5% |
6.0% |
4.63% |
3.88% |
| Length in Months |
360 |
360 |
360 |
360 |
| Monthly Payments |
$632 |
$736 |
$635 |
$598 |
| Total Interest |
$137,031 |
$142,203 |
$105,172 |
$88,103 |
| Total Paid |
$227,351 |
$264,963 |
$228,772 |
$215,263 |
Home Buying Process
Unfortunately, the recent attention in the news media on foreclosures, the housing market and predatory lending have cast a negative light on the home buying process. Thankfully, the process itself can be greatly simplified through a little amount of planning and research.
Ten Steps to the Successful Completion of the Home Buying Process
Detailed information about each step is available at www.YourKansasHome.org. (copy and paste link into your browser)