Home for sale 7400 Forests edge Ct laurel MD 20707

Coming Soon!!  55+ community in Laurel Maryland Come take a tour with me...

Home for sale 7400 Forests edge Ct laurel MD 20707 

Best & Final offers due by noon April 5, 2022. Welcome to 7400 Forests Edge Ct. Laurel, MD with 2,909 square feet and boasts 4 bedrooms, 3 full bathrooms. This home has upgrade after upgrade so don’t let this one get away in the beautiful Victoria Falls 55+ community on a unique, private, wooded, corner lot!! As you enter the first floor your eyes go immediately to the beautiful Travertine tiled floor. It is breath taking as you walk through the open concept home that leads you back through the formal Dining Room, Kitchen and Breakfast area with a large bay window. The Great Room, and Living Room have dark engineered hard wood floors that complement the Travertine floors. The Great Room has plenty of sunlight with a gas fireplace and vaulted ceiling. The Kitchen has cherry cabinets, large center island with storage, food prep countertops, breakfast area, self-cleaning wall oven, double sink, dishwasher, gas stove, and beautiful tiled backsplash. A door in the breakfast area leads to the backyard with a large new paver patio and wall with beautiful landscaping perfect for entertaining. The house has dual zone gas heating and HVAC air conditioning system with a UV Light air purifier for your comfort. The main floor Owners Suite has triple windows, a tray ceiling, an upgraded walk-in closet by Closets by Design to hold all your clothes perfectly. The remodeled Owners Bathroom has granite counter tops, double sinks, a Jacuzzi tub plus a standalone shower with decorative tiles and granite seat. The 2nd bedroom on the main floor can be used as an office or bedroom and boasts an extended double window. The 2nd level boasts a third large living area, two light filled bedrooms one with two closets and a full bathroom. This area is perfect for guests or an In-Law arrangement. The community offers many amenities including a club house across the street with indoor outdoor pools, a fitness room, billiards room, library, and banquet room. Outdoor activities include tennis, basketball, and an amazing walking trail. This beautiful home was built in 2005 and the following upgrades have been made for your comfort:  New Roof in Dec. 2020  LeafFilter gutter system with transferable warranty installed in April 2020  New paver patio and wall with a complete home underground drainage system 2020  Master Bedroom walk-in closet updated with Closets by Design with lifetime warranty 2019  Washer & Dryer 2021  UV Light Air Purifier HVAC 2021  Ackerman Security System with phone app. 2019  Ecobee Thermostats with phone app and 2 additional sensors 2019  Garage Storage Organization shelves 2021  Laundry room cabinets and shelves 2021  Travertine tiles imported from Turkey  Kitchen upgraded tiled backsplash  Invisible dog fence installed by previous owner  Upgraded Owners bathroom with decorative tile, and granite counter tops and seat in shower  Dual zone HVAC, gas heat The community is also full of amenities for seniors starting with your Private Resort Club! Stay in shape in the 55-foot indoor pool and state-of-the-art Fitness Center. Relax in the Whirlpool spa, sauna, or outdoor pool. Spend afternoons playing bridge in the Card Room, Shooting pool in the Billiards Room, and being creative in the Creative Arts Studio. Or join in the fun and socials, from barbecues on the terrace to cozy holiday festivities by the fireplace. Awaken old hobbies and be inspired to learn new ones by joining some of Victoria Falls clubs and activities. Can't decide what to do? The Community's Lifestyle Director will offer more options than you can imagine! Book Club, Card Clubs.

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Why a Home Should Be Your First Investment

Real estate has been described as the basis of all wealth.  Without considering income or investment property, buying a home to live in is an incredibly powerful way to build wealth or financial net worth.

A home is an asset measured by the size of the equity.  Equity is simply the difference between the value of the home and the amount owed.  There are two powerful dynamics at work to increase the equity which include appreciation and amortization.

Appreciation occurs when the fair market of the home increases.  The shortage of available inventory coupled with high demand has contributed to an 18% increase in value in the past year on average for homeowners in the U.S.

Most mortgage loans are amortized with monthly payments that include the interest that is owed for the previous month and an increasing amount that is paid toward the principal loan amount so that if all the payments are made, the loan would be repaid by the end of the term.

A 30-year mortgage at 3.5% interest on a $400,000 loan amount would have a principal and interest payment of $1,796.18 every month for 30 years.  After the interest is applied from the first payment, $629.51 would reduce the loan amount, thereby, increasing the owners' equity.

Each succeeding payment would have an increasingly larger amount applied to the principal and a decreasingly lower amount applied to interest.

Recently, CoreLogic reported that homeowners with mortgages have seen their equity increase 29.3% since the second quarter of 2020.  Equity rich is defined as when combined loans secured by a property are no more than 50% of estimated market value.  ATTOM reported that 42% of mortgaged homes in the U.S. are considered equity rich as of the fourth quarter of 2021.

Another advantage of this powerful asset is that borrowing money against the equity of your home is a non-taxable event. Regardless of whether it is a refinance or a home equity loan, the borrowed money is not income and not taxable.

A homeowner could stay in the home for years and as the home increases in value due to appreciation, they could borrow against their equity as many times as the value will justify.  They could continue to pull money out of their home for decades and under the current tax law, they could die and will the home to their heirs who would receive a step up in basis and the taxes would never have to be recognized.

Lastly, let's consider the home as an investment by looking at the rate of return.  Obviously, it is a personal asset that the homeowner will be able to live in, enjoy, raise a family, and share with their friends.  In calculating the rate of return, we consider a $375,000 home with a 3.00% 30-year FHA mortgage with a 3.5% down payment.  Using an annual appreciation of 3% and normal amortization, the $13,125 down payment in this home turns into a $148,062 equity in seven years.  The rate of return calculated is over 40% per year for the seven-year holding period.

Even if you discounted the ROI by half for all the unforeseen other expenses that may affect the real equity, it is still a 20% return on investment which could easily justify why purchasing a home should be your first investment.

It is challenging, particularly in some markets with low inventory, multiple offers, rising prices and increasing interest rates, but the advantages of owning a home are significant.  Would-be homeowners need the facts about their market and how to get into a home.  Start with downloading the Buyers Guide and make an appointment with a trusted real estate professional.

Paying Points to Lower the Rate

Two commonly known ways to lower your mortgage payments are to make a larger down payment especially if it eliminates private mortgage insurance and improve your credit score before applying for a mortgage.

Another way to lower your payment would be to buy down the interest rate for the life of the mortgage with discount points.  A discount point is one percent of the mortgage borrowed.  Lenders collect this fee up-front to increase the yield on the note in exchange for a lower interest rate.

A permanent buy down on a fixed-rate mortgage is available to borrowers who are willing to pay discount points at the time of closing.

Let's look at two options on a $315,000 mortgage for 30 years at 4% interest with no points compared to a 3.75% interest rate with one-point.  The principal and interest payment on the 4% loan would be $1,503.86 compared to $1,458.81 on the 3.75% loan. 

The $45.04 savings is available because the buyer is willing to pay $3,150 in points.  By dividing the monthly savings into the points paid, you can determine the breakeven point.  In this example, if the buyer is planning to stay in this home for at least 70 months, they would recapture the cost of the points and each month after that would be savings.

Another interesting thing to consider is that lower interest rate loans amortize faster; in other words, they build equity faster by paying off the loan sooner.  If the buyer stayed in the home for 10 years, their unpaid balance in this same example would be $2,117.38 lower than the 4% mortgage.  Combine that with the $2,259.29 in savings from the breakeven point to the end of 10 years and the buyer, in this situation, is $4,372.67 better off buying down the mortgage by paying the additional points. 

For a person buying a home, it may be difficult to come up with the extra amount for the points but one benefit is that the points paid are considered interest by IRS and can be deducted in the year paid.

A rule of thumb commonly used is that one discount point lowers the quoted mortgage rate by ¼% or 25 basis points.  A lender may quote X% + .6 points for a mortgage.  Using this scenario, to lower the mortgage rate by .25%, the buyer would need to pay 1.6 points. It is important to note that each lender determines the pricing of points for the loans they make. 

It may be beneficial to a buyer to pay points depending on how long they plan on being in that home.  To help you determine whether paying points should be considered, use this Will Points Make a Difference and download the Buyers Guide

I wish I knew then...

We have all heard this expression that implies that had a person known earlier in life what they know now, they would have done things differently.  The subject possibilities are endless   While no one has a crystal ball to see into the future, it may be possible to learn from people who have experienced similar situations.

In the late sixties, mortgage rates hit 8.5% but before the decade had finished, the rates had come down to 7% where they stayed for some time.  Homeowners who purchased at the higher rate, could buy a larger, more expensive home for the same payment if they could get out from under the obligation of their existing mortgage.

FHA and VA mortgages, up until the late 80's, could be assumed by anyone, regardless of credit worthiness.  Since these homes were purchased one or two years earlier, the sellers didn't really have much equity in them, and many homeowners were willing to "give" them to investors so they could qualify on a new, lower rate mortgage.

It was a fantastic opportunity for investors who could afford the negative cash flow because the homes wouldn't rent for the payment.  As the 70's economy, started heating up, so did inflation.  Most people consider inflation an undesirable thing but for people who owned rental property, it meant the values were going up and so were the rents.

Soon, the rentals no longer had negative cash flows and the investments turned the corner.  If you talk to investors who purchased those homes during that period, you'll very likely hear, "I should have bought more of them."

If we could fast forward into the future to see how people will be talking about the period we're currently in, we might see an even greater opportunity in our present time.  Interest and mortgage rates have been on a downward trend for thirty years.  In the past ten years, they hit an historic low.  They are trending up currently and it appears they will continue to do so.

Homes are in short supply which has caused the prices to go up.  Builders haven't returned to the number of new units needed to meet demand and that has been going on for over ten years.  Even when the supply does increase, it will take a long time to catch up with demand.

Combine that with supply chain shortages due to the pandemic and prices look like they are unaffordable.  Many millennials and some Gen Xers believe the "window of opportunity" has closed.

For tenants, rents are continuing to increase due to the same causes that home prices are increasing.  Buyers, by acting now, can lock in their mortgage rate and the purchase price of the home.  As prices continue to increase and the amortization of the mortgage pays down the unpaid balance, homeowners' equity increases and so does their net worth.

Unfortunately, for tenants, the rents will continue to rise, along with prices which will make it more difficult in the future to purchase.  Their rent is used to pay the landlord's mortgage who benefits in the principal reduction for each payment made.

The market is changing and people who don't own a home currently must find a way to buy one.  The longer they wait, the harder it will be to buy one.

People wanting to purchase a home in today's market must educate themselves with facts and not hearsay.  There are all sorts of programs available to address low down payments, varieties of mortgages, credit issues and other things. 

It starts by meeting with a real estate professional who can recommend a trusted mortgage professional.  Download our Buyers Guide and check out your numbers using the Rent vs. Own.

Your Home is a Hedge Against Inflation

The concern about inflation is the sustained upward movement in the overall price of goods and services while the purchasing value of money decreases.  Tangible assets like your home consistently become more valuable over time.  In inflationary periods, your home is a good investment and a hedge against inflation.

Money in the bank loses purchasing power due to inflation and the interest you may be earning is almost always less than inflation.

Home prices are going up but so is rent.  With mortgage rates near historic lows, the interest is, generally, less than the appreciation the property is enjoying.  Combine this with the leverage that occurs using borrowed funds to control an asset and your equity is most likely, growing at a faster rate than inflation.

A 90% mortgage at 3.5% for 30-years on a $400,000 home that appreciates at 4% a year will have an estimated equity of $220,000 in seven years due to appreciation and amortization.  That is a 27.5% annual rate of return on the down payment.  That is a significant hedge against a current inflation of 4%.

If a person were to put that same $40,000 in a certificate of deposit that earned 2%, it would be worth only $45,947 in seven years.  If it was invested in the stock market that earned 7% annually, the $40,000 would grow to $64,231.  The equity in the example for the home would be almost 3.5 times larger.

The assets that are considered to be good bets against inflation include some bonds, gold and other commodities and real estate.  Another distinct advantage of investing in a home is that you would be able to live there with your family and enjoy it which is not possible with bonds and commodities. 

There are certainly other considerations in a comparison like this such as maintenance, but it could be offset, at least partially, by the cost of housing being less than you would be paying for comparable rent.  And with the shortage of rental units available, the rent will certainly continue to increase annually where your housing costs are fixed with the exceptions of increases in property taxes and insurance.

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