January 13, 2022
Home is Where the Rainbow Heart Is: Top 10 Tips for LGBTQ Homebuyers
Matthew Wexler READ TIME: 4 MIN. SPONSORED
Home has never been more important than the last two years. While the pandemic has upended many aspects of our lives, it's also been an opportunity to reflect on what we value – and for many in the LGBTQ+ community, that means establishing roots with our families and communities of choice.
The housing market saw a significant dip at the onset of the pandemic but then rallied through much of 2020 as potential homebuyers considered the benefits of an at-home workspace and millennials reached "home-buying" age, according to real estate website Zillow.
Subtle but significant differences have emerged in the housing marketing for the LGBTQ+ community versus the general population. According to the National Association of Realtors, queer buyers tend to purchase older and smaller homes (look to Nate Berkus, Bobby Berk, and Orlando Soria for inspiration!), offering the opportunity to reimagine your living space exactly as you want it.
EDGE sought insights from San Diego's MyPoint Credit Union about changes in the housing market, and why establishing a relationship with a community-driven financial institution can offer peace of mind and practical solutions when making major life decisions such as buying or selling a home.
For more than 70 years, MyPoint has helped LGBTQ+ homebuyers and sellers make their dreams a reality. Because a credit union operates as a nonprofit, potential dividends are passed on to members rather than outside stockholders, and common banking fees are often reduced or eliminated, making it a smart choice whether you're ready to buy a house, save for retirement, or take that much-needed vacation.
10 Tips for Home Buying
When you're ready to utter the words "Home Sweet Home," here are 10 tips for home buying to keep in mind:
Save Money While Your Investment Appreciates – It's time to let go of being at the mercy of your landlord or management company. Rent continues to increase even in a rent-controlled building, but a fixed-rate mortgage locks in your monthly expenses. Meanwhile, with simple upkeep, your home and surrounding land will most likely appreciate over time. Tip: Pay special attention to the neighborhood to spot an emerging area with maximum growth potential.
�Tax Benefits – Under most circumstances, you'll be able to deduct the interest on a secured mortgage, along with state or local property taxes the year in which you pay them. If you're a small business owner or self-employed, you can calculate a portion of your square footage to deduct as home office space, along with a portion of utilities, insurance, security system, and other expenses. Be sure to discuss with your tax preparer to ensure you're following the latest IRS regulations for the current tax year.
You'll Always Remember Your First Time – While it might seem like a leap of faith, first-time homebuyers have the advantage of lower interest rates and much lower down payments. MyPoint specializes in first mortgages and can recommend the best terms to suit your current finances and future plans.
Closing Costs – When you sit down to number-crunch your home purchase, don't forget to consider additional closing costs. It takes a village to buy a house, and everyone wants their piece of the pie. Other fees include mortgage taxes, lender application fees, attorney's fees, title insurance, and appraisal fees that typically range from 2-5% of your home's purchase price.
Protect Your Purchase – Homeowner's insurance is a must, from natural disasters such as tornadoes, hurricanes, floods, and wildfires to theft and other unforeseen circumstances. Rates rose upwards of 11% from 2017-2020 (higher than inflation), so be sure to consider this annual expense when determining your mortgage loan.
Power Up – While some apartment leases cover various utilities, when you're a homeowner, it's all on you. Consider electric, gas, water, sewer, cable, phone and Internet costs when planning your monthly budget. It's perfectly reasonable to ask the current owner what you might expect to pay, and don't be surprised if it's higher than your one-bedroom apartment.
Which Type of Mortgage is Right For You? – A fixed-rate mortgage won't change for the duration of the loan, while an adjustable-rate mortgage's (ARM) interest rate can fluctuate based on macroeconomic factors. You don't need an MBA to understand which is right for you. Experts at MyPoint Credit Union can explain the benefits and risks of each in easy-to-understand terms.
Nothing is Forever – You've taken the plunge and purchased your first home, but like any relationship, after some time, it might need a reboot. Home refinancing offers the opportunity to renegotiate the terms of your existing loan, which may be shifting from a fixed rate to an ARM or increasing home equity.
Green is Our Favorite Color – Once you've settled in, it's time to think about maximizing your property's value while minimizing your expenses, and there's no better way to do it than through green (environmentally friendly and energy-efficient) upgrades. "Green" upgrades like solar panels and water recycling help the planet and your pocketbook. With the help of a MyPoint financial expert, you may be able to find a home improvement loan with a lower interest rate and tax benefits for your commitment to Mother Earth.
Home Equity is Your New BFF – A Home Equity Line of Credit allows you to borrow against your equity without taking out a personal loan or depleting your savings. It's a terrific option for home upgrades like investing in smart home safety equipment like security cameras, remote-activated locks and smoke/carbon monoxide detectors, but the funds can also be used for non-home-related expenses like college tuition or high-interest debt.
Buying a home involves many moving parts and perhaps, legal and financial language that might be unfamiliar to you. Having a trusted partner in success is the first step toward securing the home of your dreams with terms that align with your personal goals and values. So take a deep breath, trust your instincts, and connect with a financial institution like MyPoint Credit Union, which accepts and understands what makes you beautifully unique.
� Consult your tax advisor for details. Insured by the NCUA. Equal Housing Opportunity.