Debby Nesiba

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How To Determine Your Housing Budget

Posted On: April 29th, 2022 4:50AM

Have you decided to buy a house but aren’t sure how much you should spend? In this video, I’m going to help you determine the proper price point to look for when shopping for your first home. We’ll take a look and the numbers so you can make the best decision within your budget.

Understanding Your Budget

Buying a house can be very exciting, but it also can be very emotional—which can sometimes lead to a bad financial decision. One of the very first things you need to do before getting out of the car and starting to look at homes is to figure out what your budget is and what the price point is going to be.

 

The first step is to come up with a monthly payment that you're comfortable with. You can then reverse engineer that with all of the costs that go into that payment to figure out what your price point would be. Let’s break down all of the costs that go into the monthly payment to give you an idea of what you’ll pay.

Your Mortgage Payment

The first part of your housing payment is the monthly mortgage. This is the amount that you borrowed from the bank to pay for the house. It will be a set amount that you’ll pay for the life of the mortgage and consists of two parts: principal and interest.

 

The principal is the original amount that you borrowed, while the interest payment will depend on what interest rates are at the time that you close on the house. Together, these determine what the amount is for your monthly mortgage payment.

Property Taxes

The next part of your monthly payment is your property taxes. This is something that you will inherit just like every homeowner does. The way you're going to figure that monthly payment out is by taking your entire property tax amount and dividing it by 12. That's the amount you're going to allocate to your monthly payment.

 

You can escrow this, or you can pay it all in one sum at the end of the year. Just a small little tip: your bank will require you to escrow if you put down less than 20%. This means you will be including that property tax in your monthly mortgage payment.

Insurance And HOAs

Another fee that you'll have is property insurance. You'll need to insure the property, which is another fee that you can also include in your monthly payment and add to escrow with your property taxes. If you're wondering what the cost of property insurance is, it can vary depending on the cost of the home. Expect to pay anywhere between $100 to $150 a month.

 

One thing you need to consider when buying a property is if it has an HOA, or a homeowner's association fee. If they do, you could potentially have one to three different HOA fees that can vary from $50 a month up to $300-$500 a month. This will cover things like maintenance of the grounds maintenance of the community, snow removal, lawn care (depending on if it's a condominium or townhouse), exterior maintenance, and caring for a pool or clubhouse.

PMI

Another fee that could be included—if you don't put down enough downpayment or have an FHA loan—is PMI, or private mortgage insurance. Your bank may require you to pay that private mortgage insurance. It’s a charge that the lender will put on the borrower in the case of a default and is based on the loan amount. This fee will vary depending on what the loan amount is.

 

Once you have all of these figures together, this will determine your total monthly payment for your home. The reason this is so important is you don't want to fall in love with the house and, once you put all these costs together, can’t afford it. Now you’ve fallen in love with a house that you can't get.

Get Into Your Dream Home

I hope this helps you figure out what goes into a monthly payment when you’re buying a house. If you have any other questions or are looking for a realtor to help you find the house of your dreams, feel free to give me a call anytime and I’ll be happy to help.

 

Don’t forget to subscribe to my channel for more videos, all about making the best decisions in real estate. Stay tuned to see what I feature next!

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The Tax Advantages Of Owning A House

Posted On: April 5th, 2022 6:27PM

Did you know that buying a house is for more than just a place to live? In this video, I’m going to show you the benefits and tax advantages of purchasing a new home. We’ll look at the numbers so you can see why owning your own property is a wise investment.

 

Interest And Taxable Income


Have you ever had your tax accountant, your parents, or your friends tell you you need to buy a house? One of the reasons they tell you that is because of all of the tax advantages and tax benefits that are associated with it. When you become a homeowner, there are a lot more tax advantages than when you're just a renter.

 

One of the very first tax benefits of owning a home is that all of the interest you pay on your mortgage is tax-deductible. From the beginning of your mortgage till up to at least five years, the majority of your payment is going to be interest. Let me show you how this works.

 

Let's say John makes $50,000 a year. Throughout the year that John owns a house, he has paid $8,000 in interest. This means that John will be taxed at $42,000 a year rather than $50,000 because he's able to deduct the $8,000 interest.

 

More Deductions


Your interest is not the only thing that is tax-deductible as a homeowner—so are your property taxes. Let's say that John has an annual property tax bill of $5,000. In addition to deducting the interest, he can now also deduct the $5,000 on this property taxes. This brings his total taxable income to $37,000.

 

Each year, your lender will send you a statement showing how much interest you paid on your mortgage. You want to make sure you give that to your accountant every single year. In addition, some of your closing costs are deductible for the year that you close on your property. You want to keep that and also extend that to your accountant at the end of the year.

 

One of the biggest benefits of homeownership is that when you actually sell your property, as long as you've lived in the property for two of the last five years, you're not going to have to pay any tax on any capital gains that you've earned on the property when you sell it. This is up to $250,000 in equity. Over the past few years with the market being as crazy as it is, some people have made more than that. But if you've made up to $100,000 in equity capital gains, you're not going to have to pay taxes on that.

 

Making A Wise Investment


Owning a house is very exciting, but it's also an investment. You want to know everything, including the taxes that go along with that. If you have any questions, please reach out to me and I’ll be happy to help.

Don’t forget to subscribe to my channel so you never miss an episode of my show, all about real estate. Stay tuned to see what I feature next!

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Is It Better To Rent Or Own A Home?

Posted On: February 13th, 2022 9:29PM

Are you thinking about moving but aren’t sure whether to rent or buy? In this episode of Own It!, we’re going to look at the differences between renting and owning so you can decide which one is right for you. We’ll compare everything from monthly payments and taxes to credit scores so you know the pros and cons of each choice.

 

 

 

Should You Rent Or Buy?  

If you're thinking about moving, you're probably wondering what the difference between renting versus buying is. Over the past couple of years, real estate prices have gone up here in Denver dramatically. This has made a lot of people wonder if it’s better to rent or purchase a home. Is it even affordable or attainable anymore? Am I buying in at the peak of the market, or is renting the better option?

 

Homeownership is very attainable for somebody who has the will and desire to own a home. As a matter of fact, 40% of homebuyers last year were Millennials—meaning they were under the age of 40. This is the same demographic that said they would never be able to buy a home. Trust me, it's totally doable—and I'm going to walk you through what it takes to become a homeowner.

The Affordability Factor

The first objection people usually have when they're ready to buy a home is that it’s too expensive and they can't afford it. However, that is a total misconception. Everybody thinks that you have to put this huge downpayment down to buy a house, but that's not necessarily the truth.

 

There are a lot of first-time homebuyer programs where you don't have to put much down at all. I would even say a lot of smart people aren't putting down a lot of money; interest rates are so low that it makes more sense to take a loan out on as much as you can. The truth is you can get a loan, you just need to apply for one and see which one works for your situation.

A Homeowner’s Responsibility

The second objection I get a lot is that people don't want the responsibility of a mortgage payment, property taxes, and homeowners insurance. It seems like a lot to be responsible for, but that's all mindset and how you view your housing payment. Whether you're renting or owning, you still have housing expenses with renting; you're just throwing it out the window and paying somebody else's mortgage.

 

If you're buying, you have a tax write-off and you're earning equity in your own home. What a lot of people like to do is go out and see what they're going to get for the amount of money they're willing to pay in rent. Then you need to get pre-approved for a loan and see what you qualify for so you can research the kind of properties out there in that price range.

Comparing Side By Side

Once you get an idea of the cost of renting versus buying, compare the two and see what works best for you. Every time I've done this with my clients, they're very surprised at what they will get when owning versus renting for the same price, if not better owning. I'm going to give you a side-by-side comparison example so you can see for yourself.

 

Let's say you found a property and the cost to either own it or rent it is $2,500 a month. When you're renting, that $2,500 is going out the window every 30 days. When you own, a portion of that $2,500 goes towards the principal each month—paying down your mortgage—and another portion goes towards interest. Another portion of that goes towards your property taxes, which are tax-deductible.

 

With this example, it would cost roughly $30,000 to either own or rent over the course of a year. If you own, roughly $21,000 to $22,000 of that will be tax-deductible in property taxes and interest. In addition, if the property appreciates 5-8% in the year, that's all equity to you. When most people see this, they see the benefit over owning versus renting—and they're ready to take the next step.

 

What you really need to get started in homeownership is a decent—if not perfect—credit score, a small down payment, and closing costs. And of course, an amazing agent.

When It’s Better To Rent

There may be a few circumstances where, depending on your situation, it would be better for you to rent versus buy. One of those circumstances would be if you're only going to be in a location for a short period of time. If you're going to only be there for a year to two years, you're going to probably want to just rent.

 

Another one of those situations would be if somebody doesn't know for sure if they're going to be in their job for the duration—or for at least a long period of time. If you're not going to be in that job for the long haul, you may not want to get yourself into a mortgage right now. The third situation would be if your credit is too low and it doesn't allow you to get a mortgage. There are programs out there that allow you to get a loan if your credit is as low as 620. But honestly, the higher your credit score, the lower your interest rate will be—so work on that.

 

The last situation would be if you don't have any money out of pocket to put down on a house or for closing costs. Again, there are programs that can help you with some of this. Most of the time, it’s not what you would imagine it would be, even though there are some costs involved.

Making Colorado Home

I hope this gave you a good idea of the differences between renting and owning a home. If you have any questions or need any more information, please feel free to reach out to me and I’ll be happy to help.

Don’t forget to subscribe to my channel so you never miss an episode of Own It!, my show all about real estate in the Denver, Colorado area. Stay tuned to see what I feature next!

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Should You Hire A Real Estate Agent?

Posted On: January 27th, 2022 9:31PM

Are you thinking of buying or selling a house and wonder if you really need to hire a real estate agent anymore? In this episode of Own It!, I’m going to walk you through the pros and cons of using a realtor so you can find out if working with an agent is the right choice for you. We’ll look at the roles a realtor plays and discover why people use them in their real estate transactions.

 

 

Why Hire A Realtor?

If you’re looking to buy a house or sell your current home, you might be wondering if you can do it on your own. The truth is that you don't need to hire a real estate agent—but the vast majority of people do use a real estate agent to help them with the transaction. Let's find out if you need to hire a real estate agent or not.

 

The main reason people use a real estate agent is to help them make a more educated decision in the real estate transaction process and help facilitate the whole transaction. There are a lot of steps to this; whether you're buying or selling real estate, it's a big decision to make. The job of a real estate agent is to help you make sure you're making a well-informed decision.

 

For example, when you're purchasing a home, you are purchasing a place to live in. First and foremost, however, you're purchasing an investment. A good real estate agent is not going to care where you buy but how you buy. They’ll ensure that you’re making a good, educated decision. The reason this is so important is that you don't make money when you sell real estate—you make money the day you buy it, as long as you make a good decision.

An Agent’s Role On The Buying Side

A realtor’s role changes depending on whether you’re buying or selling a home. When you're working with a real estate agent on the purchasing side, there's no out-of-pocket expense for you. This is because your agent is typically paid by the seller or the seller's agent, not by you as the buyer. Your agent's job is to help you make a well-informed decision on your investment.

 

The second role that an agent plays for you as a buyer is to help facilitate the whole transaction and get you to the closing table. There's a lot to this process, including many dates and deadlines that your agent will keep track of. Some of these are inspections, appraisals, earnest money deposits, title information, helping with HOA documents, and more. Your agent will help you get through all of these things in this process.

An Agent’s Role On The Selling Side

On the selling side, the benefit of using a real estate agent is to maximize your selling price. Getting the most money for your house is all about positioning and marketing it, and that is your agent's job. They have to coordinate things like photography, advertising, marketing, and showings to get you through to the closing table.

 

Once you do get your home under contract, there’s a list of steps just like on the purchasing side to get through. Your agent will facilitate and help you with things like negotiations, inspection objections, resolutions, and more. There are also deadlines that we have to make sure we stay on track with, and your agent will help you with that every step of the way.

When You Might Not Need An Agent

Whether you're buying or selling, your agent's job is to help you make a wise investment and do all the running around. However, there might be situations where you don’t need a realtor—or just need a very small scope of services from an agent.

 

One of those situations might be that you're already living in a house, perhaps renting from a landlord, and plan to purchase that home. Or maybe you’re the landlord who's going to sell the home to your tenant. In that situation, the searching is already done and you already know the property that's going to be transferred. You might just need somebody to help you with the paperwork and to facilitate the whole process.

 

Some of the steps in this situation might involve things such as helping the buyer find a lender, getting the pre-qualification and pre-approval, getting title work ordered, going over HOA documents, getting all of the deadlines met, doing inspections, and getting appraisals. As I mentioned, it's a lot of work.

I’m Here To Help

I hope this gave you a good idea of the pros and cons of hiring a realtor. While you don't have to have one, they help make it a much smoother transaction and less of a headache for you when you do. Remember that whenever you have a question—which you will—feel free to ask a realtor. That's our job, and we won't charge you just to answer questions. I answer questions all the time about the real estate process, and I’d be happy to help you, too.

 

So if you have any other questions regarding the buying or selling process of real estate, please feel free to reach out to me anytime. You can also subscribe to my channel so you never miss an episode of Own It!, and make sure to stay tuned to see what I feature next.

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Welcome To Parker, Colorado

Posted On: December 31st, 2021 3:06AM

Are you considering moving anywhere near the Denver area and want to know what it’s like? In this episode of Own It!, I'm going to show you everything there is to know about Parker, Colorado. We’ll find out where Parker is located and learn about the amenities and housing prices this community offers.

 

 

Welcome To Parker, CO

There are many different suburbs to call home in the Denver Metro area. With all of these options, Parker remains one of the top favorite suburbs to live in for many reasons.

 

Parker, Colorado is located just 20 miles south of downtown Denver. Depending on the time of day, that could be 25 to 30 minutes—or it could take an hour or more. To get to the Denver International Airport from Parker, expect to drive about 30 minutes if you take the toll road. If you're feeling cheap one day and you don't want to take the toll road, it could take you up to an hour on I-225.

 

What about the distance from other locations? Parker, Colorado is about 50 minutes from Colorado Springs. If you're looking to go to the mountains, it could take you 2-4 hours, depending on weather and traffic. If there are any accidents on the road, it could take a while. However, if you were living in downtown Denver, you would have to spend time just getting out of downtown to get to the mountains.

The Lifestyle

Now that you have an idea of where Parker is located and what surrounds it, let's talk about the lifestyle. This city is well known for family life, with plenty of things for kids to do. There are playgrounds, skate parks, pools, and a great school system.

 

Parker, Colorado is also a vibrant town with a very cool downtown area. There you’ll find a variety of bars, restaurants, music venues, and more for the adult life. One of my favorite places in downtown Parker is the Parker Garage, where you can get great food, enjoy their outdoor seating area, and grab delicious drinks at the bar. I love the vibe there, and I’m sure you will, too.

 

If you're looking to hit the slopes and go skiing, snowboarding, or hiking, getting there could take you anywhere from an hour and a half to three hours. Again, it depends on where you're going and what traffic is like at that time of day.

 

Overall, with about 55,000 people, Parker is not a super big town. It's a quaint little community where you might run into some of your friends and neighbors at the grocery store or at a restaurant. Because the community is so small, we have different activities and festivals, like Parker Days, which are tons of fun.

Housing Costs

Are you wondering what you can get for your dollar in Parker when it comes to housing? While I can answer any specific questions you may have, here's a little taste of what you can expect in this city.

 

The average three-bedroom, three-bath single-family home in Parker will run you around $600,000. This should get you about 2,500 to 3,000 square feet, though it might be a little bit of an older house. Still, it will be closer to everything going on. If you're looking for something a little bit on the higher end, maybe closer to the million-dollar mark, you can definitely find that here as well. Just expect it to be a little bit further out in Parker, possibly on some land.

 

If you're looking for something smaller—such as a two-bedroom, two-bath—you can also find that in Parker. Plan to pay around $450,000 to around $600,000. This size house might also be located in some further away areas as well. A good rule of thumb is that you probably will pay more money for new construction, though you might not have a very big lot. Older homes that have been around since the 80s and 90s—which most likely have not been renovated—are going to cost you a little bit less in the $500,00 to upper $600,000 range.

Make Parker Your Home

I hope this gave you a good rundown of what living in Parker, Colorado is all about. If you have any more questions regarding your specific needs and the home you're looking for, please feel free to reach out to me I will answer all your questions.

 

Make sure to subscribe to my channel so you never miss an episode of Own It!, my show all about the Denver Metro area. Stay tuned to see what I feature next!

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