Saturday, September 8, 2007

Moving Guide: How To Move With Pets

We all know the trials of moving from one home to another. No matter how much we plan ahead, the job of moving is stressful. And as a pet owner (two cats and a dog), I can appreciate the planning required when moving to a new home with pets. From pre-move pet planning to considering a pet mover, this article will walk you through it step by step.

Pre-move pet planning
Contact the State Veterinarian’s Office or the State Department of Agriculture to request the pet laws and regulations of your destination state.

Contact the local office of the City Clerk to request information on pet ordinances. There may be “leash laws,” license requirements, and household pet limitations. Manying zoning laws prohibit certain “pets,” such as pigs, goats, venomous snakes, or monkeys in apartments, condominiums, and residential communities.

Check your apartment lease or condominium complex rules to make sure you are in compliance with the community’s pet regulations and rules, i.e., some condos allow one dog weighing less than 20 lbs. per household.

Request your pet’s health records from your veterinarian so you will have them on hand when you register with your new vet.

Take a current photo of your pet with you at the time of the move in the unfortunate event your pet is lost.

However you are traveling put a collar with ID tag on your pet that in the very least includes the pet’s name, your name, and your new address.Your best bet is to get tags and advice from your vet who can help you include a rabies tag on the collar if needed as most states require this. You can also seek assistance from a state animal control agency.

Ask your veterinarian if a Health Certificate is required for your pet in your destination state. If so, this certificate can only be issued by a licensed veterinarian and must be accompanied by current inoculation records.

If you own an exotic pet, your vet can help you verify if you need a permit to enter the destination state with your pet and assist you in applying for one.

Animals love routine.If you choose to take your animal with you by car, be sure to bring along a few of their favorite toys, treats, and blanket.

Deciding how to move your pet
How should you transport your pet to its new home? By air, ground transport, or in your car? If you are not equipped to provide lots of tender loving care to your pet during a cross-country trip, perhaps it’s better to hire a professional pet mover to take your animal to its new home by truck or air. If you are flying to your new destination, it’s probably preferable and always more cost-effective to just take your pet with you.

However you decide to move your little friend, a sturdy, secure carrier that is spacious enough for your pet to move around in, lie down, and stand up in is paramount. Make sure it has adequate cross-ventilation and a leak-proof base that you can layer with absorbent lining.

Taking your pet on the road
If you decide to take the family pet on the road trip to your new home, you’ll save money and help your animal feel secure amid the changes. Taking your pet on the road can be an enjoyable experience provided you plan accordingly.

Make sure your pet is comfortable traveling by car or take it out on some short “road trips” to get it used to it. If your pet is prone to motion sickness, discuss the situation with your veterinarian who can prescribe medication to reduce or eliminate the symptoms.

Feed your pet and provide it water a few hours before you leave and feed it only once daily, if possible, while on the road. Bring along bottled water to avoid upset stomachs.

If you are traveling with a dog, make periodic stops so you can take it for walks on a leash and provide it with water as needed.

Keep power windows up and locked to prevent the animal from inadvertently lowering the window and jumping or falling out.

Keep your pets cool inside the car, especially when it’s hot outside to keep them comfortable and prevent motion sickness. Small animals, such as gerbils, hamsters, and guinea pigs are sensitive to hot and cold temperatures.

Do not leave your pet unattended in the car unless you are within eyesight and for a brief period. In that case, crack the windows and make sure the air temperature is moderate and there is plenty of water for your pet.

If you plan to stay in hotels for overnight stops, contact lodgings in advance to be certain they are pet-friendly establishments.

Keep a plentiful supply of bottled water, disinfectant, room deodorizer, and paper towels in the car as well as an extra leash. If you are traveling with a dog, extra cleanup bags and a scooper are a must.

Keep your pet’s favorite toys and blanket nearby at all times.

Traveling by air
If you decide to fly your pet to its new destination, federal regulations require using a carrier that has a secure closing mechanism that can be opened in case of emergency. You will not be permitted to lock the carrier during the flight. As soon as you decide to fly with your pet, make sure you check with the airlines about carrier and pet requirements and restrictions. For instance, an exotic animal such as a venomous snake may not be allowed on the plane.

To ensure that your pet is as safe and comfortable as possible during the flight, here are a few more tips:

Most airlines offer reasonably priced approved carriers for sale with at least 48-hour notice. If you decide to purchase an authorized kennel from an airline, you can rest assured that these carriers meet all pet transportation requirements as designated by the US Dept. of Agriculture (USDA) and International Air Transport Association (IATA).

Leave your carrier out at home for a few weeks to give your pet a chance to get familiar with it. Tuck your pet’s favorite toys or blanket in it, to entice him or her into getting comfortable in the carrier.

Make sure your pet is on the same flight you are taking.

If you are taking a small dog or a cat with you, ask the airlines if your pet can travel on board with you rather than in the cargo area and inquire about any related requirements.

Book a direct flight so you do not have to worry about any mishaps that can occur when changing flights.

Have your pet’s nails clipped before the flight to ensure the pet’s safety as well as the safety of any person who may need to handle the pet.

Consult with a trusted veterinarian about whether you should consider giving your pet tranquilizers during the trip.

Carry a photo of your pet with you at all times in case your pet is lost during the trip and fasten two IDs to your pet’s collar: one with the pet’s name, your name, and new address, and another temporary travel ID that lists your pet’s name and your name or a contact’s name, address, and a telephone number where someone can be immediately contacted in case of emergency.

Feed your pet five or six hours before the flight and provide it water up to two hours before takeoff, except in the case of a very hot day.

When should you consider a professional pet mover?
If your pet requires special handling due to illness, or you believe the stress of taking it on a long road trip on route to your new home might be too stressful for the animal, you may wish to consider hiring professional pet movers to transport your pet to its new home. Buses, trains, and traditional movers are not legally permitted to move pets, with the exception of Seeing Eye dogs. You can ask your veterinarian for a referral or look in the yellow pages and ask a business for references.


Moving your pet into your new home
Once you arrive at your new home, designate an empty room for your pet. In it put the open carrier, its food, water, toys, and blanket. Visit your pet periodically and remain calm in its presence. Also, let it get used to the back yard if you have one. Keeping your pet away from the hustle and bustle of moving-in day as much as possible will help it feel more secure while it’s getting used to its new surroundings. Once everything settles down, you can open the door to your pet’s room and it will join the rest of the family when it is ready. The sooner you can re-establish its set routines in the new house, the better. Before you know it, your pet will feel right at home in the new house.



http://www.homesadvisory.com/moving-guide-how-to-move-with-pets.html

Moving Guide: How To Move With Pets

We all know the trials of moving from one home to another. No matter how much we plan ahead, the job of moving is stressful. And as a pet owner (two cats and a dog), I can appreciate the planning required when moving to a new home with pets. From pre-move pet planning to considering a pet mover, this article will walk you through it step by step.

Pre-move pet planning
Contact the State Veterinarian’s Office or the State Department of Agriculture to request the pet laws and regulations of your destination state.

Contact the local office of the City Clerk to request information on pet ordinances. There may be “leash laws,” license requirements, and household pet limitations. Manying zoning laws prohibit certain “pets,” such as pigs, goats, venomous snakes, or monkeys in apartments, condominiums, and residential communities.

Check your apartment lease or condominium complex rules to make sure you are in compliance with the community’s pet regulations and rules, i.e., some condos allow one dog weighing less than 20 lbs. per household.

Request your pet’s health records from your veterinarian so you will have them on hand when you register with your new vet.

Take a current photo of your pet with you at the time of the move in the unfortunate event your pet is lost.

However you are traveling put a collar with ID tag on your pet that in the very least includes the pet’s name, your name, and your new address.Your best bet is to get tags and advice from your vet who can help you include a rabies tag on the collar if needed as most states require this. You can also seek assistance from a state animal control agency.

Ask your veterinarian if a Health Certificate is required for your pet in your destination state. If so, this certificate can only be issued by a licensed veterinarian and must be accompanied by current inoculation records.

If you own an exotic pet, your vet can help you verify if you need a permit to enter the destination state with your pet and assist you in applying for one.

Animals love routine.If you choose to take your animal with you by car, be sure to bring along a few of their favorite toys, treats, and blanket.

Deciding how to move your pet
How should you transport your pet to its new home? By air, ground transport, or in your car? If you are not equipped to provide lots of tender loving care to your pet during a cross-country trip, perhaps it’s better to hire a professional pet mover to take your animal to its new home by truck or air. If you are flying to your new destination, it’s probably preferable and always more cost-effective to just take your pet with you.

However you decide to move your little friend, a sturdy, secure carrier that is spacious enough for your pet to move around in, lie down, and stand up in is paramount. Make sure it has adequate cross-ventilation and a leak-proof base that you can layer with absorbent lining.

Taking your pet on the road
If you decide to take the family pet on the road trip to your new home, you’ll save money and help your animal feel secure amid the changes. Taking your pet on the road can be an enjoyable experience provided you plan accordingly.

Make sure your pet is comfortable traveling by car or take it out on some short “road trips” to get it used to it. If your pet is prone to motion sickness, discuss the situation with your veterinarian who can prescribe medication to reduce or eliminate the symptoms.

Feed your pet and provide it water a few hours before you leave and feed it only once daily, if possible, while on the road. Bring along bottled water to avoid upset stomachs.

If you are traveling with a dog, make periodic stops so you can take it for walks on a leash and provide it with water as needed.

Keep power windows up and locked to prevent the animal from inadvertently lowering the window and jumping or falling out.

Keep your pets cool inside the car, especially when it’s hot outside to keep them comfortable and prevent motion sickness. Small animals, such as gerbils, hamsters, and guinea pigs are sensitive to hot and cold temperatures.

Do not leave your pet unattended in the car unless you are within eyesight and for a brief period. In that case, crack the windows and make sure the air temperature is moderate and there is plenty of water for your pet.

If you plan to stay in hotels for overnight stops, contact lodgings in advance to be certain they are pet-friendly establishments.

Keep a plentiful supply of bottled water, disinfectant, room deodorizer, and paper towels in the car as well as an extra leash. If you are traveling with a dog, extra cleanup bags and a scooper are a must.

Keep your pet’s favorite toys and blanket nearby at all times.

Traveling by air
If you decide to fly your pet to its new destination, federal regulations require using a carrier that has a secure closing mechanism that can be opened in case of emergency. You will not be permitted to lock the carrier during the flight. As soon as you decide to fly with your pet, make sure you check with the airlines about carrier and pet requirements and restrictions. For instance, an exotic animal such as a venomous snake may not be allowed on the plane.

To ensure that your pet is as safe and comfortable as possible during the flight, here are a few more tips:

Most airlines offer reasonably priced approved carriers for sale with at least 48-hour notice. If you decide to purchase an authorized kennel from an airline, you can rest assured that these carriers meet all pet transportation requirements as designated by the US Dept. of Agriculture (USDA) and International Air Transport Association (IATA).

Leave your carrier out at home for a few weeks to give your pet a chance to get familiar with it. Tuck your pet’s favorite toys or blanket in it, to entice him or her into getting comfortable in the carrier.

Make sure your pet is on the same flight you are taking.

If you are taking a small dog or a cat with you, ask the airlines if your pet can travel on board with you rather than in the cargo area and inquire about any related requirements.

Book a direct flight so you do not have to worry about any mishaps that can occur when changing flights.

Have your pet’s nails clipped before the flight to ensure the pet’s safety as well as the safety of any person who may need to handle the pet.

Consult with a trusted veterinarian about whether you should consider giving your pet tranquilizers during the trip.

Carry a photo of your pet with you at all times in case your pet is lost during the trip and fasten two IDs to your pet’s collar: one with the pet’s name, your name, and new address, and another temporary travel ID that lists your pet’s name and your name or a contact’s name, address, and a telephone number where someone can be immediately contacted in case of emergency.

Feed your pet five or six hours before the flight and provide it water up to two hours before takeoff, except in the case of a very hot day.

When should you consider a professional pet mover?

If your pet requires special handling due to illness, or you believe the stress of taking it on a long road trip on route to your new home might be too stressful for the animal, you may wish to consider hiring professional pet movers to transport your pet to its new home. Buses, trains, and traditional movers are not legally permitted to move pets, with the exception of Seeing Eye dogs. You can ask your veterinarian for a referral or look in the yellow pages and ask a business for references.

Moving your pet into your new home
Once you arrive at your new home, designate an empty room for your pet. In it put the open carrier, its food, water, toys, and blanket. Visit your pet periodically and remain calm in its presence. Also, let it get used to the back yard if you have one. Keeping your pet away from the hustle and bustle of moving-in day as much as possible will help it feel more secure while it’s getting used to its new surroundings. Once everything settles down, you can open the door to your pet’s room and it will join the rest of the family when it is ready. The sooner you can re-establish its set routines in the new house, the better. Before you know it, your pet will feel right at home in the new house.

http://www.homesadvisory.com/moving-guide-how-to-move-with-pets.html

Moving Guide: Making Your Move Kid-Friendly

American families are on the move with one out of five changing residences each year, according to the National Network for Child Care, and the vast majority of those moves are within the same community or to a neighboring state. Moving, by its nature, is an emotional experience. Often it means stripping cherished family photos and favorite items from your home to showcase it for prospective buyers. Tossing, selling, and donating old or unused familiar items; uprooting your family, and leaving friends and old belongings behind can take its toll. All the cleaning, dusting, sorting, and packing can be physically and emotionally taxing, as families experience the inevitable sense of grief of moving on.

Moving can be a challenging experience for any family, but especially for one with children. A child’s personality and developmental age can dictate how you can help him or her adjust smoothly to the move. Outgoing children tend to make friends more easily while a more introverted child may take several months. No matter how cheerful a child’s disposition, moving can prompt a roller coaster of emotions, so don’t be surprised if your child is elated one day and depressed the next as he or she adapts to the situation.

There are things you can do to make the move easier and even fun for your children. For example, you can promote teamwork by creating a plan and assigning each child a designated area of responsibility, or asking your child to “be in charge” of a task, i.e., making sure all boxes are labeled. A wise parent can turn a stressful situation into a positive adventure. Here are some tips to help you gear up for a smooth move:

Infant To Toddler

Children at this tender age are highly sensitive to a parent’s emotional state. Do your best to remain calm, loving, and even-keeled around your young ones to help them feel a sense of stability amid this impending change. Be careful not to confuse toddlers by being inconsistent with the household rules you have set for them or the routines you have established such as not drawing on the walls with crayons and specified snack and nap times. Allowing them to choose a few toys or a stuffed animal to bring along on the trip to the new home will make them feel special.

Preschool Age

Your preschooler is likely to express excitement about the move, but not be able to fully grasp what it means. Again, keeping your routines predictable and consistent is important. Pack your child’s belongings last and ask him or her to help with the tasks and to choose which items to leave behind. Take the time to explain how moving to a new home entails making a fresh start and starting a new adventure and that they can keep in touch with their special friends always and develop new friendships.

School-Age

Relationships are paramount to school-age children. Make sure you spend some time helping them understand how living in a new location does not mean that he or she has to break ties with friends and that it can be exciting to meet new friends. As a parent, you can help them socialize by getting to know the parents at their new school and perhaps encouraging your child to enroll in after-school activities where they will have a chance to mingle with their new peers.

Teenagers

Friends and romantic relationships are paramount to teens. Give them plenty of time to digest the news of the move so they can prepare physically and emotionally. Encourage your teenager to express his or her feelings openly and listen with an open heart. Invite them to take a visit to the new neighborhood and school so they can get a feel for the new environment.

Be a Good Role Model

Parents are the first models for their children. If you are upbeat about the move and take the lead in getting the family organized, there’s a high probability that your children will follow suit. If you create a plan for the move and assign each child designated tasks, for example, it sets the tone for a consistent, organized team approach to what could be a chaotic, emotion-filled situation if not handled with care.

Be upfront about the situated and tell the children about the move as soon as possible to give them time to adjust to the upcoming change. Answer any questions they may have with an extra dose of patience. Remember that if your child sees you getting involved in your new community and meeting neighbors, he or she will feel more comfortable to do the same. You can also encourage peer interaction by helping your children review options for participation in new groups such as the Girl Scouts and Boy Scouts, 4-H Club, church groups, or athletic teams at school. Before long, the family will be acclimated in their new surroundings and the new place will feel like home.


http://www.homesadvisory.com/moving-guide-making-your-move-kid-friendly.html

First-Time Home Buyer Tips

Buying your first new home can be a rewarding experience or a stressful one. Even seasoned home buyers can run into snags, but first-time home buyers are likely to experience a roller coaster of emotions as their idea of their dream home clashes with harsh reality. To avoid becoming overwhelmed and making choices based on emotion, break the process into small, handle-able pieces just like you’d handle any project. Here are some suggestions to get you started.

Step 1: Be prepared

Be an informed consumer. Educate yourself on the basics of new home buying. Do some Internet research, talk to a mortgage lender, real estate agent, or bank loan officer. Armed with a plan, you can save yourself time and money.

Step 2: Get a good idea of what you are looking for in a home

Figure out what you need – square footage, number of bedrooms and bathrooms, storage space requirements, lot size, children or pet accommodations, proximity to work or school – vs. what you want – carpeting, wood floors, bay windows, scenic view, swimming pool, roof color. Research and compare neighborhoods, school systems, crime rate, and environment.

Step 3: Make your credit report shine

Your credit score plays a significant role in your ability to get the best possible interest rate and terms on your mortgage. Your credit score ranges from 340 to 850. A credit report contains personal information such as your name, social security number, current and previous addresses, employment history; public records from the court system including bankruptcy, foreclosures, or accounts in collection; late payments; credit history; and credit inquiries. Pull a copy of your credit report and correct any errors you find on it. Pay down debts, pay bills on time, don’t close any old accounts and seek advice on how to improve your score. You might even consider moving the target date for purchasing your new home to give yourself time to get your credit into pristine condition.

Step 4: Know how much home you can afford

Don’t fall into the trap of overspending on a new home. Home buying is an emotional experience and of course you want to purchase the nicest home that you can comfortably afford. To avoid the stress of becoming house poor, get pre-qualified or at least pre-approved as soon as possible and work up a budget for your new home. This will make it easier to keep a cool head and make a decision you can happily live with.

Step 5: Ask the important questions

Whether you’re working with a real estate agent, a buyer’s agent, or doing it yourself, you need to ask questions such as:

* What types of home inspections are required in your area?
* Who will conduct the title search and what is the fee for that service?
* What does the closing process entail?
* Who will be acting as the “settlement agent,” the professional who handles the final paperwork for you to sign?


http://www.homesadvisory.com/first-time-home-buyer-tips.html

Subprime Mortgage Lenders: Should They be Trusted?

Because buying a home is one of the most significant investments most people will make in their lifetime, it’s important to hire a mortgage lender that is trustworthy. Many people don’t easily qualify for conventional “A paper loans” due to credit problems, low income, self employment or sketchy employment history. Consequently, sub-prime, non-prime or “bad credit”mortgages have gained widespread popularity.

Although some non-prime lenders try to help borrowers finance a home with reasonable rates and terms, there are others with little regard for the borrower, concerned only with their profit. Unfortunately, consumers with credit issues are susceptible to high interest rates and additional fees. Because of this, choosing the right lender is extremely important. It’s in the borrower’s best interest “not” to put blind trust in a lender and to always keep both eyes open for deceiful lending practices.

Researching Mortage Lenders

One of the most important steps that consumers need to make in the loan process is checking out any lenders they’re considering using. Although not all sub-prime lenders are snakes, consumers must pursue a non-prime loan in the defense mode with their guard up. Shady mortgage lenders prey on first time home buyers that are unfamiliar with the home loan turf. The scenario is absolutely perfect for taking advantage of unsuspecting neophytes.

Consumers must become educated in how sub-prime loans work. There needs to be recognition of common lender traps, such as inflated interest rates, extended prepay penalties (usually mandatory), additional fees and clauses prohibiting refinancing and binding manditory arbitration (BMA) - barred from going to court. Truth of the matter is, there are many lenders ready and willing to rip consumers off and even commit mortgage fraud to earn a quick buck. Unfortunately, it’s standard operating procedure and folks must be savvy enough to recognize it.

When To Walk Away

Recognizing early warning signs of abusive lending practices is key. Lenders should provide the borrower with a “Good Faith Estimate (GFE).” This is an estimate of the closing costs, which include inspection costs, taxes and title insurance. By law, the borrower should receive a GFE within 3 days of the loan application. It’s important that consumers walk away from any lender that stalls on providing a Good Faith Estimate on request. The lender is also required to provide an annual percentage rate, which is the cost of the credit in relation to the amount borrowed. This provides the borrower witn a means to compare offers with other lenders.

RESPA

The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, designed to to help consumers become better shoppers for settlement services and to make sure that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.
Truth in Lending Act (TILA)

The Consumer Credit Protection Act of 1968 initiated Truth in Lending disclosures. For the first time creditors were required to disclose the cost of borrowing in layman’s terms so the average consumer could understand what the charges are, compare costs, and shop for the best terms and deal.

Reporting Predatory Lending

Consumers who feel they are being victimized by abusive lending practices should make a formal complaint to the following federal agencies and organizations:

* FDIC Consumer Response Center
* Housing and Urban Development (HUD)
* U.S. Department of Justice
* Federal Bureau of Investigation (FBI)
* Federal Trade Commission (FTC)
* National Consumers League (NCL)
* National Fair Housing Alliance (NFHA)
* National Association of Attorneys General
* Center for Responsible Lending
* Association of Community Organizations for Reform Now (ACORN)
* Consumer Federation of America (CFA)

Because lending abuse is on the rise in the sub-prime loan industry, consumers must enter into the mortgage loan process with the ability to recognize shady practices and walk away if necessary.

For information and tips on mortgages, visit the “professionals” at New Homes Central Lending.


http://www.homesadvisory.com/sub-prime-mortgage-lenders-should-they-be-trusted.html

Purchasing A New Construction Home: What You Should Know

If you’re in the market to purchase a new construction home, you’ll want to be an educated buyer. Many home buyers desire a newly-constructed home because they offer more energy efficiency and design options. You can customize many things such as flooring, appliances, counter tops, cabinetry, appliances and wiring (TV, audio, computers and phones).

Buying a new home instead of a resale home requires some preliminary research on your part. It’s good to know the pros and cons of purchasing a new home so that you know what to look for as well as what to look out for. Without doing your homework before you buy, you may find that your new home fails to measure up to the standards you expected.
Check Out Your Builder

You’ll want to find out as much as possible about the builder you hire to construct your home. Find out how long the builder has been in business of new construction. Go online and check for any complaints against them. If you type in the builder’s name followed by “complaints,” you’ll be able to access what people have to say about their experience. You can also type the builder into the Better Business Bureau (BBB) for more dirt if there is any.

Keep in mind, even the best builders can not please everyone. But if you see page after page of disgruntled customers, take it as a red flag warning to dig deeper into the builder’s reputation. Speak with others who’ve used the builder in the past and more recently. This will be the best ways of finding out how a builder’s customer service, craftsmanship and professionalism measure up. Investigating your builder can be time consuming, but pays off ten-fold if it helps you avoid making a costly mistake that you’ll regret later.
Location Is Key

Once you have decided on the builder, the next step is researching the neighborhood you want to live in. A good place to start is the local town or city zoning board. If there are open vacant fields in your surrounding area, find out what they are zoned for. Don’t take the sales rep’s sales pitch as gospel when it comes to describing the plans for the area. Remember, they are there to “sell you” how fabulous the neighborhood is and will be. Do your own sleuthing and get the facts.

You’ll also want to find out about the schools in your area. Makes sure those zoned for your neighborhood are highly-rated whether you have school-age children or not. This is one of the main things buyers look for, if and when you should decide to sell your home down the road.
Pros and Cons

There are two sides of the coin to every decision so it’s best know what you can expect about both. Here’s a list of the pros and cons of purchasing a newly-constructed home:
Upside

* Customized options and upgrades
* Less maintenance
* Updated building and safety Codes
* Energy efficient and innovative usage of space
* Comes with state of the art amenities
* May have recreational facilities like playgrounds, community pools, clubhouses and gyms
* New building materials tend to be safer because they don’t include such things as lead and asbestos
* Comes with construction and appliance warranties

Downside

* Resale can be difficult in a sub-division before all the homes have been built
* Delays in construction are common place
* Can cost more than existing homes due to escalating land values
* Dealing with noise, dirt and construction until all the homes are built
* Additional costs such as mandatory HOA fees and other assessments
* Higher taxes due to impact fees may be charged, in order to expand new services to your area.
* Unwanted developments or businesses may continue to be built on neighboring land

Before you sign on the dotted line of a new construction home, make sure you’ve checked out the builder, researched the surrounding neighborhood and assessed the pros and cons of purchasing a new construction home.

For information on a mortgage for your new home, visit the experts at New Homes Central Lending.


http://www.homesadvisory.com/purchasing-new-construction-home-what-you-should-know.html

What every smart home buyer knows

You're not just buying a home. You're buying a lifestyle.

So, as you inspect the nuts, bolts and systems of your proposed purchase, also consider what kind of life you want while you're living there.

That was a major factor for Kevin and Kathleen O'Connor when they purchased their first home on Boston's North Shore.



"The No. 1 thing that I have learned is that it is critical to think hard and understand how you live your life and separate that from the sometimes fiction of what you think you want in a house," says Kevin O'Connor, host of television's "This Old House" and "Ask This Old House."

The couple wanted a real neighborhood within walking distance of shops, parks and other amenities. They found their perfect home in an 1894 Victorian. "We paid a premium because of the location," says O'Connor. "But on the other hand, it doesn't have a garage or a driveway. It's a great house that suits our lifestyle very well. You forgo some amenities and get some benefits."

To make a smart buy, O'Connor says, you've got to "understand exactly how you live."

Focus on two things, says Robert Irwin, author of "Home Buyer's Checklist." First, how is the home going to fit your needs? And second, how easy will it be to resell?

"One of the biggest mistakes people make is assuming that they will live in a house forever," says Irwin.

"It sounds counterintuitive because you're buying. Why should you look at selling?" he says. "But it's also an investment, and from an investment perspective you have to be looking at selling."

Keep your cool
The most important advice for potential buyers? Don't get emotionally involved.

"A lot of people talk themselves into falling in love with something before they've really looked at it," says Stephen Gladstone, immediate past president of the American Society of Home Inspectors. "They really should be looking at quality as well as location."
So give that potential home the critical eye.

"I think that for the average person, curb appeal is very important," says Gladstone. "It's what says to them, 'Let's go inside and take a look.'"

For the professional, "It can give you a feeling for whether the home is well cared for or not," he says.

"When I look at a house, the first thing I do when I get out of the truck is look at the overall location of how it sits on the lot," says Tom Silva, general contractor for "This Old House" and "Ask This Old House."

Silva eyeballs the roof line (dipped or crooked could mean rot, rust or a structural problem with a joist or rafter). Ditto the line of the windows. "If the sills are straight -- that's a good thing," says Silva, also a professional contractor with Mass.-based Silva Brothers Construction.

Silva also looks at the roll of the land in relation to the house, which can be an important factor for drainage problems. "Does [the lot] pitch to the house? And even though it does, is there means for water to get disbursed before it enters the house?"
Does the exterior show signs of water damage?

Savvy buyers also look at the roof, which can be expensive to replace.

"Look for signs of deterioration or damage," says Gladstone, also the president of Stonehollow Fine Home Inspections & Testing in Stamford, Conn.

Some clues: Do the shingles look worn or warped? If wood, are they covered with mold or moss? Are they cracking or curling? If the roof is a flat membrane, is it ripped? Does it have an alligator skin-like appearance?

Check the siding too, Gladstone says. First check out the paint: "Is there peeling, bubbling or stain damage? Does it look worn or thin? Are there sections of the siding that look damaged? Are there holes or loose pieces?"

Do you see cracks in the exterior brick? "Ask why," says Don Strong, CGR (certified graduate remodeler), president of Brothers Strong Inc. in Houston. "What has settled that the brick should crack?" While it doesn't mean you should pass on the house, it is a sign that you need a qualified expert to examine the situation before you buy, he says.

Dream home or nightmare?
"Beware of a home that has a lot of awkward features like a bathroom off a kitchen or a bedroom off a living room. They can be expensive to change," Irwin says. "You might be willing to live with it, but it might make it difficult to sell later on."

Other features that can affect resale: small bathrooms or less than two bathrooms; less than three bedrooms (with some exceptions, like golf course condos); carports; one-car garages; homes that are atypical of the neighborhood, or a pool, which can be a plus or a minus.

When you tour the house, be nosy. Open closet doors. Walk through the attic, garage and basement. Note how well kept the yard is.

Those normally hidden spaces "are a barometer of how well it's been taken care of in the past." says James Katen, a home inspector and the owner of Benchmark Inspection Services in Gaston, Ore.

Check out the air filter and the ducts. If they're dirty, the house isn't being maintained properly, says Gladstone.

Walk corner to corner in large rooms and pace the length of long hallways or stairways. Feel any depressions or dips?

Check the condition of the floor, says Silva. "Is it bubbled?"

Inside, diagonal cracks above the interior door jams or windows and windows that don't open properly could signal a foundation problem, Strong says.

http://www.bankrate.com/aolre/news/real-estate/reguide/examine-house1.asp

Which Mortgage Is Right for You?

The explosion of new types of mortgages in recent years has made picking out which one is right for you almost as difficult decision as picking out your home.
The basic types are fixed and adjustable rate mortgages, known as ARMs, which start out with a low, fixed rate, then re-adjust after a set number of years, often sending payments way up. ARMs accounted for 32 percent of loans last year, up from 11 percent in 1988.

Thanks to the housing boom, banks are offering nearly as many varieties and flavors of mortgages as Starbucks offers of coffee. The major innovations are interest only mortgages, which allow payments of interest only for the first few years, and option mortgages, which allow you to decide each month how much you will pay, ranging from a bare minimum interest payment to a chunk of the principal.

Each of these loans was designed for a specific homebuyer. "There is nothing wrong with the products and everything wrong with how people use them," says Ben Utley, a financial planner in Eugene, Oregon. What worries financial advisors is that many homeowners appear to be using these exotic mortgages simply to maneuver their way into bigger house.

Christopher Cagan, an economist at First American Real Estate Solutions, calculated that the higher payments on ARMs will set off one million defaults over the next five years. "The impact of this won't break the economy, but it will sting those immediately involved," he says. To decide which mortgage is right for you, consider which circumstance each is designed for.

30-YEAR FIXED RATE This standard bearer allows steady, predictable payments. The burden of this loan will ease in time as inflation--and your potential wage growth--makes the payments seem smaller. The disadvantage is that the payments will be higher than those initial low teaser rates of an ARM, so you won't be able to afford as big of a house.

15-YEAR FIXED RATE If you can afford it, a 15-year mortgage offers quicker repayment and faster equity build-up. The rate is usually lower than the 30-year, so interest expenses are much lower. The current 30-year rate is 6.2 percent while the a 15-year goes for 5.9 percent.

5/1 ADJUSTIBLE RATE MORTGAGE An adjustable rate mortgage allows you to start off with low payments and afford more house now. Two numbers identify these loans: the first is the number of years until the rate resets and the second is how often it will reset. These are for people who expect to move before the rate jumps. Americans typically move every seven years. If you expect your income to rise or to pay off a big expense (such as school loans) they might be right for you, too.

1/1 INTEREST ONLY MORTGAGE An interest only mortgage allows buyers to pay just the interest on a mortgage at first. Then, payments spike. A mortgage that resets in one year bets that interest rates have plateaued or are headed down. People who get these loans are typically counting their house value to rise, a strategy that worked well in recent years, but may not now.

OPTION MORTGAGE You can decide each month whether you’ll just pay the interest or work off some principal. This mortgage is designed for those with an erratic income, say, someone who gets a big bonus. The minimum payments are so low that you may actually sink deeper into debt with each minimum payment.

40-YEAR or 50-YEAR MORTGAGES You can get slightly lower monthly payments by stretching out the loan for a decade or two, but at a high cost. Someone with a 30-year $300,000 mortgage would pay $1,837 a month, for a total interest cost of $361,466. By stretching the loan out for 50 years, they would only save $213 a month and end up paying about $300,000 more in interest.



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Beware New “1 Percent Mortgage” Scams

Desperate for business in a collapsing industry, a growing number of mortgage brokers are resorting to deceptive practices and violating federal do-not-call restrictions to sell an exotic product one industry leader called “dangerous” for most borrowers.

Through telemarketing blitzes, blanket faxes, direct-mail and radio ad campaigns, unscrupulous brokers are hawking misnamed “1 percent mortgages” –- also known as “negative-amortization” loans -– in misleading and potentially fraudulent ways, said Kate Crawford, consumer-protection chairwoman for the National Mortgage Brokers Association. The onslaught is especially severe in fast-cooling, major metro markets.

“I would never recommend these, especially for a first-time home buyer,” Crawford said. “They’re very dangerous, and most borrowers don’t understand how they work even after you explain it several times.”

“No one should be pushing negative-amortization mortgages ever,” said Will Ogburn, executive director of the National Consumer Law Center in Boston. “And to do it deceptively by highlighting a 1 percent interest rate is a huge scam.”

Desperate measures

The U.S. mortgage industry is undergoing its swiftest contraction in history this year since rates jumped from 50-year lows, sparking an unprecedented drop in refinancing and new-home purchases. Federal authorities estimate the number of Americans employed in the mortgage-origination field will drop 40 percent in 2006.

As a result, some brokers are aggressively marketing once rare “neg-am” loans, previously reserved for wealthy borrowers who receive income in big spurts. They came into widespread use last year in high-priced markets like San Francisco for borrowers unable to qualify for conventional mortgages.

Under a common “four-pay option,” borrowers can elect to make a monthly payment based on a 15-year or 30-year fixed-rate schedule. They also can pay only the monthly interest and none of the principal, or even just a small percentage of the interest due. That last choice, which many take, results in negative amortization where their balance steadily grows each month -- an especially risky choice in a slumping housing market like the one now under way.

A radio ad in greater Washington, D.C., last month trumpeted a “1.25 percent mortgage” that enabled homeowners to borrow “$500,000 for as little as $1,300 a month” -- without disclosing how deeply and quickly into debt they’ll go if they do -– about $1,400 a month or nearly $17,000 in a year. The fast-spoken disclosure language said only that “this loan could add to your principal balance.”

Lax enforcement

Anyone who advertises neg-am loans as 1 percent mortgages -- rather than loans with 1 percent payments -- could be prosecuted for fraud, experts say. Yet, no federal or state authorities have stepped up to prosecute abusers.

Industry leaders and consumer groups are united in their denunciation of these mortgages. They liken them to 125 percent mortgages that do little more than enable overextended borrowers.

Just how pervasive the predatory come-ons have become is difficult to gauge. The Federal Trade Commission and the Federal Communications Commission declined to acknowledge receiving any “1 percent mortgage” complaints or make the type of recent complaints public –- even though no individual companies would be named.

Do-not-call violators realize they face little repercussion given scant enforcement. In the year after the registry took effect in October 2003, during the height of publicity, the FCC issued fines or citations to 20 companies. In nearly two years since, it’s cited only six, according to the agency’s Web site.

Barraged by calls

One California homeowner on the DNC list received two unsolicited calls in a 12-hour period this month from brokers from Blue Leaf Financial and United Century Mortgage, offering a “lower cost” or “wholesale” loan. That same homeowner fielded more than five dozen such calls -– none of which show up on caller-ID or are traceable by “*69” -- in the last two months.

James Yoo, listed as head of Chatsworth, Calif.-based Blue Leaf in California Department of Real Estate records, did not return a phone call for comment. A Google search yields a dormant home page for a company called Blue Leaf Financial at a more upscale street address on Wilshire Boulevard in Los Angeles.

James Drake, customer service director for Santa Monica-based United Century, said the offending call was one of the “0.5 percent” that slip through its scrubbing process for DNC registrants. “I personally extend my apologies. I don’t know of any company with a 100 percent perfect rate on the DNC.”

As for pitches for 1 percent neg-am mortgages, Drake agrees they can be “bent to the point where some people don’t know their loan balance is rising, and that is absolutely heinous.”

Those most at risk

Michael Pfiefer, general counsel for the California Mortgage Bankers Association, is certain there’s been widespread violations of false advertising and do-not-call laws because he’s received numerous calls at his own home.

“People are trying to figure out ways to stay in business” and some are resorting to potentially criminal means to do it, Pfiefer said.

The danger of these unchecked abuses is especially grave for mortgage holders with minimal equity in their homes, Crawford warned.

“Human nature is to make the minimum payment, and when they to go sell their house, they may have no equity left,” Crawford said, especially if their home’s value drops. “They may have to stay in that house longer than they planned, and that will turn their world upside down.”


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Who is your real estate agent?

If you’ve made the decision not to go it alone and work with an agent, your next step will be picking one out. Many rely on the recommendations of friends, lawyers or accountants. Even with those recommendations, you should interview prospective agents.

Questions to ask:

Is this a career or a hobby for you? The general real estate sales just means between 30 and 90 hours of class time in most states. So for many, this can be a part-time job. In the recent real estate boom, it’s become a popular second career. If someone has a broker’s license, that means they have more experience -- one to three years in most states. About half of real estate agents are Realtors, which just means they belong to the National Association of Realtors, a professional organization that comes with a code of ethics.

How long am I stuck with you? Understand whether you are under any agreement to stick with this agent and for how long. At what point can you find a house or buyer on your own and not have to pay a commission?

Are you really working for the other side? Buyers’ agents specialize in finding homes for buyers. They know the local market and will work it on your behalf. Because the commission really comes from the seller, buyers have to be sure to avoid someone working on the seller’s behalf. If you pick up a flyer from a For Sale sign, for example, odds are you’ll be calling the seller’s agent. They’re already obligated to work to get the best price for the seller. So, don’t tell them you’re really willing to pay more than you’re offering now. Agents have an extra incentive to sell the homes listed with their firm, so some chosoe an Exclusive Buyers Agent. They don’t take any listings.

Do you know my turf? Make sure you get an agent that is familiar with both your neighborhood and houses in your price range. Ask what the average price of a home is they sold last year. If you’re selling or only looking at a certain type of home, say, a condominium, ask how well they know that market.

What’s your rate? Normally seller’s pay a commission of 5-7 percent, which is split so each the buyer’s agent and the seller’s agent get about 3 percent. Some agents are negotiable, though. Just like in the stock market, there are discount brokers who may offer you fewer services for a lower rate.

What exactly am I paying for? Sellers need to comparison shop the services and philosophy of each agent. How will they get your house in front of the most buyers? Do they believe in open houses? What kind of advertising and Web presence do they have? Will it be on the Multiple Listing Service? Buyers want to know how much attention they’ll get from their agent. That may translate to the number of leads or willingness to show many houses.



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Who is your lender?

Getting the right loan can make the difference in whether you can afford your house or not. Be sure to understand all the hidden terms on your loan.

1. What’s the rate now -- and what can it go up to later? If you’re getting a fixed rate loan, the question is pretty straightforward. Your interest rate --and your monthly payments -- are fixed. You can check the going rate on a particular type of mortgage at sites like bankrate.com. Remember that the farther your credit history is from perfect, the higher your rate will be. If you have an Adjustable Rate Mortgage (ARM), it gets much trickier. You’ll get a better deal on the beginning rate, but it could go up from there. The loans are usually labeled with a fraction. A 3/1 ARM means that the rate stays put for three years, then re-adjusts every one year afterwards.

What stops ARM payments from going to the moon are important safety features called a caps. The cap limits on how much the payments could go up the first time, in each subsequent time or overall. So, it’s crucial to understand what you could be getting into if rates continue to rise, but it’s something easy to miss. A recent survey by the Federal Reserve Board found that 41 percent of homeowners with ARMs didn’t know how much the rate could go up overall and 35 percent didn’t know how much it could go up at once.

2. How about those points? Points are a way to pay your lender to reduce the rate. Each point costs 1 percent of the loan balance. Points and interest rates work like a see-saw. As your points go up, your interest rate goes down. Some lenders are now offering “negative points.” They give you cash for settlement costs, but come with the steep price of higher interest rates.

The longer you plan to stay in your home, the more valuable points are to you. Several online calculators are available to help figure out how long you would need to stay put to make each point worth it. Usually points are paid upfront, but sometimes they can be added to the principal.

3. Is there a penalty for paying off the loan early? Homeowners are often surprised to learn that they can get stuck with a fee for paying off the loan early. Sometimes that fee can be quite hefty: up to 3 percent of the loan balance or 6 months interest. Lenders use the penalties to keep homeowners from quickly jumping to cheaper mortgage rates.

The penalties aren’t all bad: You may be able to get a better rate if you agree to pay a penalty for prepayment of a loan. Though, if you’ve had trouble getting a loan, you may be required to accept a prepayment penalty -- because if your credit improves, you’ll surely be tempted to refinance.

Be sure to understand the terms of the penalty before you agree to it. Many penalties gradually decline and then disappear after a set number of years. When will your penalty go away? Will it apply if you sell your home or only if you refinance?

4. Can I lock in this fabulous rate right now? In today’s rising interest rate environment, locking in a good rate is vital. Traditionally buyers looked for a mortgage after they found their home. The lender would then lock that rate for 15, 30, 45, or 60 days to allow time for processing the application and for any delays in settlement. Today the lock is as flexible as everything else in real estate. The lock can last from a week to four months. Some buyers get the loan first with a “lock and shop” agreement, which can fix the loan price for up to a year.

Be sure to ask your lender: How long does it usually take you to approve a mortgage? Can I get the lock in writing? Does the lock cover both interest rates and points? What are the fees -- if any -- for the lock? Are there any conditions that will allow the lender to break the lock? If your lock expires, you’ll probably have to pay the prevailing rate. Lenders who resell their mortgages to other investors may be unwilling to cut you a break. So, you may want to ask your lender if they keep the loans or resell them.

5. What do I need to do to get that loan? Each loan comes with two kinds of requirements -- what you need to qualify and what you need to prove it. “Qualifying guidelines” are the basic requirements of each loan. Have you had steady or increasing income for the last couple years? How much of a downpayment is required? How big of a bite of your monthly income will the payment take? If you have credit problems, are they far enough in the past? If you meet all the conditions, you have to prove how much you make. Typically, that involves two years of income tax returns and W-2 forms, two months of pay stubs and recent statements from anywhere you save or owe money. For the self-employed or others with complicated financials, there are mortgages that require no documents, but come with higher rates.

http://realestate.aol.com/article/_a/who-is-your-lender/20060825112609990001

Questions for the Buyer

Owning your own home is part of the American dream, a dream that’s become easier to attain in recent years. Nearly 7 in 10 American households own their own home, up from 44 percent in 1940. Still, a home is the biggest investment most people will ever make. So, you have to be sure you are ready. If you’ve just caught real estate fever, you could end up buying more home than you can afford.

What can’t you live without? Before you even set foot in a real estate agent’s office, take stock of what’s important to you in your new home. Do you want four bedrooms or do you need them? Will you need good schools? An easy commute? Shopping and restaurants within walking distance?

What can you afford? The back of the napkin calculation goes like this: take 25-30 percent of your gross monthly income (minus any previous commitments, like credit card bills or student loans). That should be your monthly housing costs (including maintenance, taxes and insurance). You’ll probably end up with a mortgage three to four times your salary. Interest rates have been gradually rising and observers fear more hikes, so be cautious with any mortgage with adjustable rates, which rise and fall with market rates.

Are you financially prepared for this? Owning a home is a big commitment and it’s not for everyone. Is your job secure? Are you going to be able to make steady payments for decades to come? (Some with variable income may get an option Adjustable Rate Mortgage that will allow a choice of payments.) Establishing good credit will save you an enormous amount of interest payments. Have you saved enough for a downpayment (3-20 percent of the house price) and closing costs (1-2 percent)? You may be able to get a mortgage for less than 20 percent down, but your payments will be higher and you’ll probably have to pay mortgage insurance.

How long are you planning on staying? How you answer this question may determine the previous two questions. If you have no kids and plan on leaving the state in two years, then schools are not your priority. But, if this just might be the house you’re in for the next decade, you better check them out. How long you plan on staying will also determine what type of mortgage you should get. If you’re packing up in a few years, then you might consider an adjustable rate mortgage, one that will allow lower payments at first. The catch is if you do end up sticking around, your mortgage payments could go way up.

Is this some kind of get rich quick scheme? In 2005 nearly 3 out of 10 homes were bought for investment, according to surveys by the National Association of Realtors. Another 12 percent were vacation homes, many with some financial strategy in mind. Over the last several years home prices have climbed by double digits in many regions, so buying a second home seemed like a sure thing. Now that the market is cooling, however, it may be harder to make money on real estate investments if you’re only counting on the price going up instead of rental income.


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Reasons to Delay Buying a Home

Assuming you have the financial resources and the desire to eventually own your own home, there are very few good reasons to put off the purchase. You can miss out on years of appreciation if you do.

The main thing you want to avoid when buying a home is being put in a position where you will have to sell it too soon. If you have to sell a home before it has appreciated enough to cover the costs and commissions of selling, you could find yourself in a financial bind. This is especially true for those who buy a home with a down payment of ten percent or less.
Real Estate commissions traditionally run around six percent of a home’s sales price. The seller’s closing costs generally come to about one and a half percent. You can see how this can easily exceed the first year’s appreciation. If you made a minimal down payment, you could actually have to come up with cash out of pocket to sell your home.

New to the Area

A very good to reason to delay buying a home is if you have just moved to an unfamiliar area or region of the country. It makes sense to rent for a number of months before deciding on exactly where you want to live. Often when people buy a home immediately they find that they might have made a better decision if they had waited awhile.

Uncertain Job Future

You could be right out of college or expecting a promotion and a transfer. Or your company has announced an impending "restructuring." If any of these apply, it might be best to wait to buy a home. When you have a more accurate picture of what your next few years will be like, that will be the time to buy.

Marital Problems

Real estate agents see a lot of life unfold before their eyes. One of the saddest occurs when former clients divorce and are forced to sell a recently purchased house. It happens all too often when a family in turmoil decides that buying a new home may help resolve their problems. Perhaps it is inevitable that such problems occur, but selling a home before it appreciates can create an additional financial burden in an already difficult situation.



http://realestate.aol.com/article/_a/reasons-to-delay-buying-a-home/20061214171109990001

Reasons to Delay Buying a Home

Assuming you have the financial resources and the desire to eventually own your own home, there are very few good reasons to put off the purchase. You can miss out on years of appreciation if you do.

The main thing you want to avoid when buying a home is being put in a position where you will have to sell it too soon. If you have to sell a home before it has appreciated enough to cover the costs and commissions of selling, you could find yourself in a financial bind. This is especially true for those who buy a home with a down payment of ten percent or less.
Real Estate commissions traditionally run around six percent of a home’s sales price. The seller’s closing costs generally come to about one and a half percent. You can see how this can easily exceed the first year’s appreciation. If you made a minimal down payment, you could actually have to come up with cash out of pocket to sell your home.

New to the Area

A very good to reason to delay buying a home is if you have just moved to an unfamiliar area or region of the country. It makes sense to rent for a number of months before deciding on exactly where you want to live. Often when people buy a home immediately they find that they might have made a better decision if they had waited awhile.

Uncertain Job Future

You could be right out of college or expecting a promotion and a transfer. Or your company has announced an impending "restructuring." If any of these apply, it might be best to wait to buy a home. When you have a more accurate picture of what your next few years will be like, that will be the time to buy.

Marital Problems

Real estate agents see a lot of life unfold before their eyes. One of the saddest occurs when former clients divorce and are forced to sell a recently purchased house. It happens all too often when a family in turmoil decides that buying a new home may help resolve their problems. Perhaps it is inevitable that such problems occur, but selling a home before it appreciates can create an additional financial burden in an already difficult situation.



http://realestate.aol.com/article/_a/reasons-to-delay-buying-a-home/20061214171109990001

Why Buying a Home is a Good Idea

The Best Investment

As a fairly general rule, homes appreciate about four or five percent a year. Some years will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region.
Five percent may not seem like that much at first. Stocks (at times) appreciate much more, and you could easily earn over the same return with a very safe investment in treasury bills or bonds.

But take a second look …

Presumably, if you bought a $200,000 house, you did not pay cash for the home. You got a mortgage, too. Suppose you put as much as twenty percent down -- that would be an investment of $40,000.

At an appreciation rate of 5% annually, a $200,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $40,000. Your annual "return on investment" would be a whopping twenty-five percent.

Of course, you are making mortgage payments and paying property taxes, along with a couple of other costs. However, since the interest on your mortgage and your property taxes are both tax deductible, the government is essentially subsidizing your home purchase.

Your rate of return when buying a home is higher than most any other investment you could make.

Income Tax Savings

Because of income tax deductions, the government is subsidizing your purchase of a home. All of the interest and property taxes you pay in a given year can be deducted from your gross income to reduce your taxable income.

For example, assume your initial loan balance is $150,000 with an interest rate of eight percent. During the first year you would pay $9969.27 in interest. If your first payment is January 1st, your taxable income would be almost $10,000 less – due to the IRS interest rate deduction.

Property taxes are deductible, too. Whatever property taxes you pay in a given year may also be deducted from your gross income, lowering your tax obligation.

Stable Monthly Housing Costs

When you rent a place to live, you can certainly expect your rent to increase each year -- or even more often. If you get a fixed rate mortgage when you buy a home, you have the same monthly payment amount for thirty years. Even if you get an adjustable rate mortgage, your payment will stay within a certain range for the entire life of the mortgage -- and interest rates aren’t as volatile now as they were in the late seventies and early eighties.

Imagine how much rent might be ten, fifteen, or even thirty years from now? Which makes more sense?

Forced Savings

Some people are just lousy at saving money, and a house is an automatic savings account. You accumulate savings in two ways. Every month, a portion of your payment goes toward the principal. Admittedly, in the early years of the mortgage, this is not much. Over time, however, it accelerates.

Second, your home appreciates. Average appreciation on a home is approximately five percent, though it will vary from year to year, and in some years may even depreciate.. Over time, history has shown that owning a home is one of the very best financial investments.

Income Tax Savings

Because of income tax deductions, the government is subsidizing your purchase of a home. All of the interest and property taxes you pay in a given year can be deducted from your gross income to reduce your taxable income.

For example, assume your initial loan balance is $150,000 with an interest rate of eight percent. During the first year you would pay $9969.27 in interest. If your first payment is January 1st, your taxable income would be almost $10,000 less -- due to the IRS interest rate deduction.

Property taxes are deductible, too. Whatever property taxes you pay in a given year may also be deducted from your gross income, lowering your tax obligation.

Stable Monthly Housing Costs

When you rent a place to live, you can certainly expect your rent to increase each year -- or even more often. If you get a fixed rate mortgage when you buy a home, you have the same monthly payment amount for thirty years. Even if you get an adjustable rate mortgage, your payment will stay within a certain range for the entire life of the mortgage -- and interest rates aren’t as volatile now as they were in the late seventies and early eighties.

Imagine how much rent might be ten, fifteen, or even thirty years from now? Which makes more sense?

Forced Savings

Some people are just lousy at saving money, and a house is an automatic savings account. You accumulate savings in two ways. Every month, a portion of your payment goes toward the principal. Admittedly, in the early years of the mortgage, this is not much. Over time, however, it accelerates.

Second, your home appreciates. Average appreciation on a home is approximately five percent, though it will vary from year to year, and in some years may even depreciate.. Over time, history has shown that owning a home is one of the very best financial investments.

Freedom & Individualism

When you rent, you are normally limited on what you can do to improve your home. You have to get permission to make certain types of improvements. Nor does it make sense to spend thousand of dollars painting, putting in carpet, tile or window coverings when the main person who benefits is the landlord and not you.

Since your landlord wants to keep his expenses to a minimum, he or she will probably not be spending much to improve the place, either.

When you own a home, however, you can do pretty much whatever you want. You get the benefits of any improvements you make, plus you get to live in an environment you have created, not some faceless landlord.

More Space

Both indoors and outdoors, you will probably have more space if you own your own home. Even moving to a condominium from an apartment, you are likely to find you have much more room available – your own laundry and storage area, and bigger rooms. Apartment complexes are more interested in creating the maximum number of income-producing units than they are in creating space for each of the tenants.

If you are moving to a home for the first time, you are going to be very pleased with all the new space you have available. You may have to even buy more "stuff."


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The Business Cycle and Buying a Home

Recession and Expansion

There are times when the economy is brisk and everyone feels confident about his or her prospects for the future. As a result, they spend money. People eat out more, buy new cars, and … they buy houses.
Then, for one reason or another, the economy slows down. Companies lay off employees and consumers are more careful about where they spend money, perhaps saving more than usual. As a result, the economy decelerates even further. If it slows enough, we have a recession.

During such a time, fewer people are buying homes. Even so, some homeowners find themselves in a situation where they must sell. Families grow beyond the capacity of the home, employees get relocated, and some may even find themselves unable to make their mortgage payment - perhaps because of a layoff in the family.

In the business cycle of real estate, there are buyers' markets and sellers' markets ... and some markets in between. It is all based on supply and/or demand.

Supply and Demand -- Inventory

During sellers' markets, homes sell quickly and sellers have a lot of pricing power. As a result, prices rise more rapidly than at other times. During buyers' markets, homes may sit on the market for awhile before selling, so sellers become more flexible and may even drop their prices.

The market is determined by supply and demand.

In real estate, the relationship between supply and demand is calculated as "available inventory." At the current sales pace, how long would it take to sell the total number of houses available on the market? That is how the real estate industry measures inventory.

Inventory is measured in weeks and months. Longer inventory times are associated with buyers' markets. Shorter inventory periods are associated with sellers' markets. Some buyers and sellers hope to time their purchase to take advantage of market cycles.

Timing Your Purchase to the Market Cycle

One problem with attempting to time your purchase to the business cycle is that even experts have problems accurately predicting the future economy. Even when they can, the real estate market does not necessarily move in tandem with the stock market or the economy as a whole.

Part of the reason is interest rates.

When the economy is doing well, interest rates are generally higher. The result is that fewer people can afford houses. When the economy slows down, interest rates fall, the "affordability index" moves up and more people can afford houses.

As you can see, this cycle does not move "in sync" with the rest of the economy. It is also influenced by how many people have jobs, whether they are well-paying jobs, and consumer outlook for the future. All these factors make it difficult to know, in advance, whether the housing market is going to boom or bust.

What makes most sense is the "buy and hold" strategy. Buy a home you expect to remain in for at least seven years or more.

Why You Should Not Wait to Purchase a Home

Even if you could "time the market," that strategy would most benefit first-time buyers.

You see, people who already have a home usually need to sell it in order to come up with the down payment for their next home. Even if they don't, they would have to carry the debt and obligations on two homes at the same time. This can create financial hardship, even when you rent out the previous home. There are maintenance costs, renters don't always make their payments on time, the rent may not cover the mortgage and other costs, and sometimes the property may be vacant.

So if you are a move-up buyer and want to purchase your next home during a depressed market, you generally have to sell your current home during that same depressed market. If you want to sell during a boom, then you also have to purchase during the same boom.

It tends to equal out.

Finally, suppose you are a first-time buyer and wait think the end of a boom is near? If you guess wrong, are you going to wait...and wait...and wait...till the next depressed market? If so, you could miss out on loads of depreciation ...

... and that is assuming you guess right about your market timing. In 1996, when the home market was struggling, who would have predicted what the next seven years would bring?


http://realestate.aol.com/article/_a/the-business-cycle-and-buying-a-home/20061214174309990001