With all the steps involved in choosing a house to buy and then finding a loan, the process can become overwhelming. This report was written to give you some tips about the process of acquiring a home. You will not likely ever again make such a large investment, so having a little information about the process can only help.
Before you start looking for a house, there is a little homework you need to do first. A little effort to acquire knowledge about home buying, will prevent some later frustration. A survey by the National Association of Realtors found that single woman looked for places near friends and family when looking for a house, while single men look for places that were near work or schools. Married men tend to defer to their wife’s taste when house hunting. The article did not say so, but lets be real. Married woman usually make the decisions when it comes to a place to live. With this in mind, let me point a few things to avoid.
Please, do not become one of those persons who find a house and fall in love with it. The mistake these people make is to attempt to buy the house without considering how the house will function for their family. Do not buy a house without being sure that it will meet your family’s needs. Also, do not buy a house without having it inspected. Many lenders require an inspection before making a loan. If your lender does not require an inspection, take it upon your self to do so. Inspection of a house will provide you with an evaluation of its true condition. Appraisals are similar to an inspection, but it is not the same thing. Make sure that the seller has a recent appraisal that you can access, if not this is something that you may also want to consider.
It is important to take your time when buying a house. Do not get in a hurry. Do not allow any kind of pressure to cause you to act too quickly. Remember the home work. You will have to decide whether you will buy a new house or a pre-existing home. Get an idea of the present interest rates and make sure you understand the difference between a fixed rate and an ARM mortgage. There many other types of mortgages, but you want to avoid most of them. For example, interest only mortgages were very popular with speculators during the housing bubble. Their intent was to flip the property as quickly as possible, so it made sense to get a mortgage that would give them the lowest payments. This also accounts for the popularity of mortgages with a pick your payment option. Avoid them if at all possible. The low payment is great in the beginning, but before you know it the payments will double or even triple. In the worse case situation you will not longer be able to afford your mortgage.
You will need to use a little patience when making a decision about the house you choose and with the mortgage you accept. This does not mean to wait on a better market or interest rate. Most of us do not have the incredible ability to see the future. Go ahead and act if you find a house that you like and you are sure it will fit your family’s needs. Remember you will be gettting the benefit of lowering your taxes and gaining yourself an appreciating asset . A couple more things before we get to mortgages. Make sure that you know the difference between fixed rate and ARM mortgages. Buying a home is the single largest investment most people will make. Do it right!
A large percentage of people purchased houses that turned out to be more house than they could afford during the housing bubble. House prices were sky rocketing and Sub-Prime Lenders would finance a home for anybody, regardless of their credit history. The bubble has now busted. An outrageous number of people found themselves in foreclosure and a number of Sub-Prime Lenders had to close their doors. In the so called “Hot Markets” speculators represented more that 25% of the buyers. But the big gains have disappeared and so have the speculators. Perhaps, this made it more difficult to get a mortgage. But, do not worry there are still plenty of mortgages available. Also, my guess is that there is a growing inventory of houses available. Find the right lender and I guarantee that you will be successful in getting a mortgage.
All mortgage lenders check your FICO score at the beginning of the process, but, your FICO score will not make or break you with all lenders. If you have good credit you have no need to worry about a FICO score. If your score is not very high it will probably help to try raising your score (any little bit can help) and attempt to make your Credit Report look a little better. If you have a little time (maybe six months) before you apply for a mortgage, start paying your bills on time. If you have a large number of credit cards, you can spread the debt out more evenly among them. Try not to have any card close to its limit.
You will need to use a little patience when making a decision about the house you choose and with the mortgage you accept. This does not mean to wait on a better market or interest rate. Most of us do not have the incredible ability to see the future. Go ahead and act if you find a house that you like and you are sure it will fit your family’s needs. Remember you will be gettting the benefit of lowering your taxes and gaining yourself an appreciating asset . A couple more things before we get to mortgages. Make sure that you know the difference between fixed rate and ARM mortgages. Buying a home is the single largest investment most people will make. Do it right!
A large percentage of people purchased houses that turned out to be more house than they could afford during the housing bubble. House prices were sky rocketing and Sub-Prime Lenders would finance a home for anybody, regardless of their credit history. The bubble has now busted. An outrageous number of people found themselves in foreclosure and a number of Sub-Prime Lenders had to close their doors. In the so called “Hot Markets” speculators represented more that 25% of the buyers. But the big gains have disappeared and so have the speculators. Perhaps, this made it more difficult to get a mortgage. But, do not worry there are still plenty of mortgages available. Also, my guess is that there is a growing inventory of houses available. Find the right lender and I guarantee that you will be successful in getting a mortgage.
All mortgage lenders check your FICO score at the beginning of the process, but, your FICO score will not make or break you with all lenders. If you have good credit you have no need to worry about a FICO score. If your score is not very high it will probably help to try raising your score (any little bit can help) and attempt to make your Credit Report look a little better. If you have a little time (maybe six months) before you apply for a mortgage, start paying your bills on time. If you have a large number of credit cards, you can spread the debt out more evenly among them. Try not to have any card close to its limit.
Again, let me point out that all lenders do not emphasize FICO scores. Companies such as American Mortgage Marketing Group offer 100% financing to people with defects on their credit. American Mortgage Marketing Group is a online company. You can reach them by simply going to the internet to get additional information. Click Here. They not only offer loans to home buyers. They offer:
• Purchasing Loans
• Home Equity Loans
• Home Equity Line of Credit
• Refinancing
Have a great day,
Herman Wheeler
American Mortgage Marketing Group
hermwheel@hotmail.com
Recently retired from AT&T as a technician. Began trying to make a go on the internet only a few months ago. Like most newbies, I had no idea what I was getting into. Now that the shock is over, I feel confident that I made the correct choice for an after-retirement profession.
Article Source: http://EzineArticles.com/?expert=Herman_Wheeler
Monday, September 24, 2007
Home Buying Checklist - Windows
If you are in the market to purchase a home, it can be easy to fall in love at first sight. Do so at your own risk. While the overall appearance of a home is important, the quality is in the details. In this article, I provide a checklist of window issues you should consider when viewing a home.
Windows
If you are considering buying a home, you should have a checklist of things to review for the property. There is an old cliché that eyes are the window to a person’ soul. In the case of a home, they can be a clue to the qu
ality of the home building if you check the following:
1. The first item to check is whether the windows open and close properly. Quality windows should slide easily and with little noise. Cheap windows tend to stick and make grinding noises. If any window will not open or close at all, careful attention needs to be paid to why. Is it the quality of the window or has the house started moving because of foundation problems? Make sure you know the cause.
2. The second item to check is soft or mushy sills at the base of the window. Often you can identify a soft sill by a “rotted” look, but make sure to run your hand across the sills with light pressure to see if there are any soft spots. If you find a problem, warning lights should be going off in your mind. A mushy sill means there is a water penetration problem. More importantly, it also means the problem has existed for some time. Long-term water problems can mean the existence of mold and mold can be an expensive problem to fix. If you are really interested in the home, demand an inspection paid for by the seller. If the seller refuses, walk away from the home.
3. Water stains are the final window item to check for during your viewing. Just because the sills are not soft, doesn’t mean there isn’t a leakage problem. Stains around a window frame are sure signs of water problems. If a room has been painted, try to find one that hasn’t. If the entire interior has been painted, ask the seller to state in the sales agreement there were no water stains before the house was repainted.
Windows are almost always an indicator of the quality of workmanship for a home. Giving them a good “once over” should tell you a lot about the house you are considering.
Raynor James is with http://www.fsboamerica.org - providing FSBO homes for sale by owner. Visit our "sell my home" page at http://www.fsboamerica.org/seller.cfm to list and sell your home for free for one month. Visit http://www.fsboamerica.org/buyer.cfm to see homes for sale by owner.
Article Source: http://EzineArticles.com/?expert=Raynor_James
Windows
If you are considering buying a home, you should have a checklist of things to review for the property. There is an old cliché that eyes are the window to a person’ soul. In the case of a home, they can be a clue to the qu
ality of the home building if you check the following:
1. The first item to check is whether the windows open and close properly. Quality windows should slide easily and with little noise. Cheap windows tend to stick and make grinding noises. If any window will not open or close at all, careful attention needs to be paid to why. Is it the quality of the window or has the house started moving because of foundation problems? Make sure you know the cause.
2. The second item to check is soft or mushy sills at the base of the window. Often you can identify a soft sill by a “rotted” look, but make sure to run your hand across the sills with light pressure to see if there are any soft spots. If you find a problem, warning lights should be going off in your mind. A mushy sill means there is a water penetration problem. More importantly, it also means the problem has existed for some time. Long-term water problems can mean the existence of mold and mold can be an expensive problem to fix. If you are really interested in the home, demand an inspection paid for by the seller. If the seller refuses, walk away from the home.
3. Water stains are the final window item to check for during your viewing. Just because the sills are not soft, doesn’t mean there isn’t a leakage problem. Stains around a window frame are sure signs of water problems. If a room has been painted, try to find one that hasn’t. If the entire interior has been painted, ask the seller to state in the sales agreement there were no water stains before the house was repainted.
Windows are almost always an indicator of the quality of workmanship for a home. Giving them a good “once over” should tell you a lot about the house you are considering.
Raynor James is with http://www.fsboamerica.org - providing FSBO homes for sale by owner. Visit our "sell my home" page at http://www.fsboamerica.org/seller.cfm to list and sell your home for free for one month. Visit http://www.fsboamerica.org/buyer.cfm to see homes for sale by owner.
Article Source: http://EzineArticles.com/?expert=Raynor_James
Home Buying Grants Are Alive And Well - Get Your Share Of The Free Money Today!
Owning a home in America today, instead of becoming a luxury it can actually become a reality, with the help of the home buying grants. If you are interested in saying “stop” to your monthly rent, then they might be the perfect solution for you. A grant is an excellent possibility that saves you a lot of stress and troubles. It can be the optimum solution for you, in case you do not have great sums of money at your disposal, to use and to invest as you please. The first thing you are going to face when you want to apply for one of the home buying grants is the wide range of eligibility criteria. For sure, your financial status matters, as well as your occupation, family members, location and so on. But as long as you are informed well enough and as long as you opt for the programs that suit you best, you have all the chances to get the desired aid.
The fact is that in the US today, you can find various lending programs that offer very low rates – and who doesn’t want that? So, in order to get the best offers, you should start your search with the help of the Internet. You can find various directories of home buying grants, offered by numerous organizations and banks. But when you do your search, make sure that you are only considering the ones that promote a serious and reputable image. In addition to the above, you should know that the process implied by the home buying grants might take a lot of your time. In addition, you might need to wait for some months or even a year in order to obtain the money. Actually, this might be considered one of the main flaws of the home buying grants process. Still, as long as you keep contact with the provider, as long as you provide the requested information in time and as long as you collaborate optimally, thus offering all the details that are needed, you have all the chances to wait less and to get your grant sooner.
The home buying grants sound like an ideal solutions for all those who can not pay cash when purchasing a home. And that is why they appeal to so many people. Even more, the popularity of the home buying grants has increased in the past years, as a result of the real estate boom. Individuals are actually aware of the fact that we are dealing with a business opportunity here, and not just with a simple necessity. Nowadays, people are interested in buying more than one residence, since the real estate business has become the safest and the most profitable of all. And when you think about it, you can actually gain profit with the help of these home buying grants. More and more individuals are interested in applying online for home buying grants, this is a current fact. And if we think about it, these programs come with many advantages. Besides saving us the troubles of dealing with monthly rent, they can offer security, thus providing us the necessary funds for purchasing a house. And we all know that owning a home is an essential factor of our feeling of safety and well being. Considering all these facts, it is no wonder that the popularity of the home buying grants is constantly increasing.
Home buying grants are extensively reviewed at Sam Ness' Grants Finder website. Grants-related timely info and advice for all intended grant seekers.
Article Source: http://EzineArticles.com/?expert=Sam_Ness
The fact is that in the US today, you can find various lending programs that offer very low rates – and who doesn’t want that? So, in order to get the best offers, you should start your search with the help of the Internet. You can find various directories of home buying grants, offered by numerous organizations and banks. But when you do your search, make sure that you are only considering the ones that promote a serious and reputable image. In addition to the above, you should know that the process implied by the home buying grants might take a lot of your time. In addition, you might need to wait for some months or even a year in order to obtain the money. Actually, this might be considered one of the main flaws of the home buying grants process. Still, as long as you keep contact with the provider, as long as you provide the requested information in time and as long as you collaborate optimally, thus offering all the details that are needed, you have all the chances to wait less and to get your grant sooner.
The home buying grants sound like an ideal solutions for all those who can not pay cash when purchasing a home. And that is why they appeal to so many people. Even more, the popularity of the home buying grants has increased in the past years, as a result of the real estate boom. Individuals are actually aware of the fact that we are dealing with a business opportunity here, and not just with a simple necessity. Nowadays, people are interested in buying more than one residence, since the real estate business has become the safest and the most profitable of all. And when you think about it, you can actually gain profit with the help of these home buying grants. More and more individuals are interested in applying online for home buying grants, this is a current fact. And if we think about it, these programs come with many advantages. Besides saving us the troubles of dealing with monthly rent, they can offer security, thus providing us the necessary funds for purchasing a house. And we all know that owning a home is an essential factor of our feeling of safety and well being. Considering all these facts, it is no wonder that the popularity of the home buying grants is constantly increasing.
Home buying grants are extensively reviewed at Sam Ness' Grants Finder website. Grants-related timely info and advice for all intended grant seekers.
Article Source: http://EzineArticles.com/?expert=Sam_Ness
Home Buying Terminology -- What is FICO?
When applying for a mortgage loan, you'll likely encounter the term "FICO" at some point. And even if you don't hear the phrase mentioned, FICO is there in the background, affecting your chances of loan approval and influencing your interest rate.
So what is FICO, and how does it affect your chances of qualifying for a mortgage loan?
FICO is a computerized credit-scoring model named after the Fair Isaac Corporation, the company that developed it decades ago.
How FICO Affects You
The big three credit-reporting bureaus – Experian, Equifax and Trans Union – use the FICO scoring model to convert your credit history into a credit score. Mortgage lenders in turn use that score to decide whether or not you qualify for a mortgage loan, and to determine what interest rate you'll pay.
Of course, there are other factors that influence these decisions, but FICO plays a leading role. In other words, your FICO score helps mortgage lenders determine your credit worthiness, how likely you are to pay off your debt, and what risk category you fall into.
The higher your FICO score the better, as evidenced by the scoring brackets below:
650 – 850: The "go ahead" category. Low risk to lender. Applicant has good chance of qualifying for a mortgage loan.
620 – 650: The "possible" category. Moderate risk to lender. The lender will likely request more information from the applicant to base their qualifying decision on.
620 or below: The "risky" category. Highest risk to lender. Applicant will probably have trouble obtaining a mortgage loan.
FICO Factors
Your FICO score is based on your credit report (which is your credit history on paper). Your credit report includes such things as:
* Your debt-to-income ratio
* Number of credit cards held
* Credit card balances
* Other outstanding debt
* Payment history
* Payment delinquencies
How to Keep a High FICO Score
There aren't any "quick fixes" when it comes to raising your FICO score. Improving your credit is a gradual, cumulative process. Paying off credit cards will help, but it's best to take a more preventative approach:
Pay your bills on time. Don't apply for credit too often. Minimize your debt (to improve your debt-to-earnings ratio). In other words, keep a clean financial record.
Conclusion
Think of FICO as a little man watching how you handle your finances … peering over his librarian-style glasses and scribbling notes onto a clipboard. Give him good things to write about, and you'll have less to worry about when you apply for a mortgage loan.
Article Source: http://EzineArticles.com/?expert=Brandon_Cornett
So what is FICO, and how does it affect your chances of qualifying for a mortgage loan?
FICO is a computerized credit-scoring model named after the Fair Isaac Corporation, the company that developed it decades ago.
How FICO Affects You
The big three credit-reporting bureaus – Experian, Equifax and Trans Union – use the FICO scoring model to convert your credit history into a credit score. Mortgage lenders in turn use that score to decide whether or not you qualify for a mortgage loan, and to determine what interest rate you'll pay.
Of course, there are other factors that influence these decisions, but FICO plays a leading role. In other words, your FICO score helps mortgage lenders determine your credit worthiness, how likely you are to pay off your debt, and what risk category you fall into.
The higher your FICO score the better, as evidenced by the scoring brackets below:
650 – 850: The "go ahead" category. Low risk to lender. Applicant has good chance of qualifying for a mortgage loan.
620 – 650: The "possible" category. Moderate risk to lender. The lender will likely request more information from the applicant to base their qualifying decision on.
620 or below: The "risky" category. Highest risk to lender. Applicant will probably have trouble obtaining a mortgage loan.
FICO Factors
Your FICO score is based on your credit report (which is your credit history on paper). Your credit report includes such things as:
* Your debt-to-income ratio
* Number of credit cards held
* Credit card balances
* Other outstanding debt
* Payment history
* Payment delinquencies
How to Keep a High FICO Score
There aren't any "quick fixes" when it comes to raising your FICO score. Improving your credit is a gradual, cumulative process. Paying off credit cards will help, but it's best to take a more preventative approach:
Pay your bills on time. Don't apply for credit too often. Minimize your debt (to improve your debt-to-earnings ratio). In other words, keep a clean financial record.
Conclusion
Think of FICO as a little man watching how you handle your finances … peering over his librarian-style glasses and scribbling notes onto a clipboard. Give him good things to write about, and you'll have less to worry about when you apply for a mortgage loan.
Article Source: http://EzineArticles.com/?expert=Brandon_Cornett
Personal Bankruptcy and Home Buying
If you were granted a personal bankruptcy decision over the past several years you know that obtaining new credit is difficult, almost impossible. Fortunately, if you are looking to purchase a home, there are ways for you to still find home financing even with a personal bankruptcy ruling on your credit report. It won’t necessarily be an easy thing to do, but you could be in your new home if you explore some of the options open to you.
FHA – People with low to moderate incomes as well as folks that have had credit problems in the past may find some relief in the form of an FHA backed mortgage. The Federal Housing Administration (FHA) which itself is part of the Housing and Urban Development department of the US federal government backs loans made by lenders to borrowers. These home loans are very attractive to borrowers and lenders alike: you can afford a home with little or nothing down while the risk of funding your loan is transferred from the lender to the government. This means that where a lender may have considered you to be too much of a risk, they’d reconsider if the FHA was involved. Ask your lender about an FHA backed mortgage option.
VA – Veterans and close family members could find themselves eligible for a loan despite previous financial problems. Like the FHA, the VA relaxes some of the applicant guidelines in order to help you get in a home. Down payments are lower and you could receive a lower interest rate too. Ask a mortgage lender familiar with the VA program how you can apply too.
HUD – When FHA backed mortgages fail, the homes are then transferred directly to HUD. HUD will then try to find a buyer for the home and although HUD will not finance your purchase, you could still be eligible for FHA financing on the very home that went into default previously.
Local and State Programs – Depending on location, you could be eligible for regional financing from an arm of a local government providing loans in distressed areas for below market rates. In many cases these government programs will relax the rules to allow homes to sell to those who otherwise may not be eligible to afford one.
Yes, you may have to do some looking around before you are granted a home post personal bankruptcy. Learn about all of the options and then apply for a loan that is right for you.
Jeff is the owner of Homeowner Uk Loans one of the Uk’s leading secured loan quote providers. If you are searching for that low rate on a secured loan then visit our site today for a free no obligation quote.
Article Source: http://EzineArticles.com/?expert=Jeff_Lakie
FHA – People with low to moderate incomes as well as folks that have had credit problems in the past may find some relief in the form of an FHA backed mortgage. The Federal Housing Administration (FHA) which itself is part of the Housing and Urban Development department of the US federal government backs loans made by lenders to borrowers. These home loans are very attractive to borrowers and lenders alike: you can afford a home with little or nothing down while the risk of funding your loan is transferred from the lender to the government. This means that where a lender may have considered you to be too much of a risk, they’d reconsider if the FHA was involved. Ask your lender about an FHA backed mortgage option.
VA – Veterans and close family members could find themselves eligible for a loan despite previous financial problems. Like the FHA, the VA relaxes some of the applicant guidelines in order to help you get in a home. Down payments are lower and you could receive a lower interest rate too. Ask a mortgage lender familiar with the VA program how you can apply too.
HUD – When FHA backed mortgages fail, the homes are then transferred directly to HUD. HUD will then try to find a buyer for the home and although HUD will not finance your purchase, you could still be eligible for FHA financing on the very home that went into default previously.
Local and State Programs – Depending on location, you could be eligible for regional financing from an arm of a local government providing loans in distressed areas for below market rates. In many cases these government programs will relax the rules to allow homes to sell to those who otherwise may not be eligible to afford one.
Yes, you may have to do some looking around before you are granted a home post personal bankruptcy. Learn about all of the options and then apply for a loan that is right for you.
Jeff is the owner of Homeowner Uk Loans one of the Uk’s leading secured loan quote providers. If you are searching for that low rate on a secured loan then visit our site today for a free no obligation quote.
Article Source: http://EzineArticles.com/?expert=Jeff_Lakie
Three Home Buying Secrets
Looking for a home? Take a look at these three home buying secrets. They might just save you several thousands of dollars.
Home Buying Secret - The Agent Is Not Your Friend
Okay, maybe your real estate agent is your friend, but that doesn't mean she will be looking out for your best interest. First of all, she can't, if she is working for the seller. Unless your agent specifically is working as a buyer's agent, he or she is likely legally obligated to work for the interest of the seller. This means that anything relevant you say ("Oh, I might go $10,000 higher.") will be passed on to the seller.
Even if the real estate agent is working for you, be careful. People talk - even good agents. Don't say too much that you don't want known by all. In addition, keep in mind that an agent makes money only when there is a sale - and makes more on a larger sale, or one with a higher commission. This can mean less than perfect objectivity in helping you choose a home.
Home Buying Secret - A House Is Not Always A Good Idea
You may have the impression that buying a home is always a good idea. This is a convenient belief for real estate agents, title companies and bankers. The problem is that it just isn't true.
I know of towns where the home values are the same as they were twenty years ago, and others where they have dropped in value in the last year. Real estate does not always go up in a given year or even several. Even if real estate is appreciating, though, a home isn't necessarily a good investment, if rents are low relative to home prices.
In some towns appreciation has slowed, and home prices are very high, while at the same time, the rents in the area are low. For example, in Tucson, Arizona, a two-bedroom home can sell for $200,000, while you can rent one for just $750 per month. If you rent for half of what it costs to buy, and bank the difference, you may be further ahead financially three years from now.
Also think about how long you will be in the home. Transaction costs for real estate have gone up steadily over the years. You might spend 10% of the home value in buying costs, and selling costs, if you pay commission to sell it. This means that it will have to go up about 10% in value before you even break even - not likely if you move in the first couple years.
Home Buying Secret - Low Offers Work
Real estate agents will hate me for this one. Low offers are embarrassing for them to present to a seller, and even embarrassing for you to write. On the other hand, I have a friend who recently embarrassed himself into a lakefront home for about $40,000 less than it is worth. How would you like to buy a home AND immediately increase your net worth by $40,000?
Okay, low offers work, but here's how they work: rarely. You have to accept that if you want a bargain, you will lose a lot of potential homes, spend a lot of time making offers, and annoy real estate agents. Unless you are under time constraints, or have the fantasy that there is one "perfect" house for you, this isn't so bad. On the other hand, if none of your offers are even countered, you may really be wasting your time and trying to go too low.
Copyright Steve Gillman. To see a photo of the house we bought for $17,500, get a free ebook on how to buy Cheap Homes, and more, visit: http://www.HousesUnderFiftyThousand.com
Article Source: http://EzineArticles.com/?expert=Steven_Gillman
Home Buying Secret - The Agent Is Not Your Friend
Okay, maybe your real estate agent is your friend, but that doesn't mean she will be looking out for your best interest. First of all, she can't, if she is working for the seller. Unless your agent specifically is working as a buyer's agent, he or she is likely legally obligated to work for the interest of the seller. This means that anything relevant you say ("Oh, I might go $10,000 higher.") will be passed on to the seller.
Even if the real estate agent is working for you, be careful. People talk - even good agents. Don't say too much that you don't want known by all. In addition, keep in mind that an agent makes money only when there is a sale - and makes more on a larger sale, or one with a higher commission. This can mean less than perfect objectivity in helping you choose a home.
Home Buying Secret - A House Is Not Always A Good Idea
You may have the impression that buying a home is always a good idea. This is a convenient belief for real estate agents, title companies and bankers. The problem is that it just isn't true.
I know of towns where the home values are the same as they were twenty years ago, and others where they have dropped in value in the last year. Real estate does not always go up in a given year or even several. Even if real estate is appreciating, though, a home isn't necessarily a good investment, if rents are low relative to home prices.
In some towns appreciation has slowed, and home prices are very high, while at the same time, the rents in the area are low. For example, in Tucson, Arizona, a two-bedroom home can sell for $200,000, while you can rent one for just $750 per month. If you rent for half of what it costs to buy, and bank the difference, you may be further ahead financially three years from now.
Also think about how long you will be in the home. Transaction costs for real estate have gone up steadily over the years. You might spend 10% of the home value in buying costs, and selling costs, if you pay commission to sell it. This means that it will have to go up about 10% in value before you even break even - not likely if you move in the first couple years.
Home Buying Secret - Low Offers Work
Real estate agents will hate me for this one. Low offers are embarrassing for them to present to a seller, and even embarrassing for you to write. On the other hand, I have a friend who recently embarrassed himself into a lakefront home for about $40,000 less than it is worth. How would you like to buy a home AND immediately increase your net worth by $40,000?
Okay, low offers work, but here's how they work: rarely. You have to accept that if you want a bargain, you will lose a lot of potential homes, spend a lot of time making offers, and annoy real estate agents. Unless you are under time constraints, or have the fantasy that there is one "perfect" house for you, this isn't so bad. On the other hand, if none of your offers are even countered, you may really be wasting your time and trying to go too low.
Copyright Steve Gillman. To see a photo of the house we bought for $17,500, get a free ebook on how to buy Cheap Homes, and more, visit: http://www.HousesUnderFiftyThousand.com
Article Source: http://EzineArticles.com/?expert=Steven_Gillman
Representation and The Home Buying Process in This Market
Representation
Most people just do not appreciate the job of a realtor. Yes, while minimal training goes into being a realtor, it is none the less training that society at large has come to appreciate. An old law exists that underpins a primary purpose for realtors- statute of frauds. It is the adoption by nearly every state regarding this old law from England that governs real estate transactions and that it- if it is not in writing it does not exist. There are many paragraphs contained in a standard Real Estate Purchase Contract that each state has adopted peculiar to how common misdeeds and oversights have posed problems in that past. Certain situations that require addressing these things or additional items to a contract to be written up separately on an addendum underscore the importance for some training and expertise, so that people do not get exploited.
Now, many a transaction has taken place without realtors, that have gone just fine, which transactions are commonly called “for sale by owner”. But it is those that don’t go fine that sometimes lethal consequences can happen for the unrepresented and all instances do not involve the statute of frauds.
Usually, the largest body of investment of money within a person’s lifetime takes place during a real estate transaction. They can and do go wrong. Just ask all the people who bought way to high without the help of a realtor who could have warned them about the home being above market value, who are now in foreclosure and they will tell you, yes, most certainly, I should have had a realtor. Conversely, many more “for sale by owners” do not know that they have just “given their home away” for less than what is was worth. By the way, many know or have not cared and are less greedy than the rest of us, praise be to them. On a personal note as a realtor, it strikes me as how amazingly common it is, as I even myself was raised with a ‘garage-sale’ like mentality, that we expect not just a good deal when we are buying, but also when we are selling, and somehow call ourselves ethical and “All-American”. What about the the poor guy on the other side who didn’t get the good deal… how considerate have we been to them? Yet, we appear to have clear consciences all the way to singing ‘Dixie’.
The current problems we are having involving the sub-prime market and with bad lending practices came about because the institution built their projections on untried models. They are now re-mapping how they do that. Real estate bases its practice off of comparables, and on-the-ground information about supply and demand, not off models.
It is precisely because of such circumstances, both preserving an otherwise exploited public, to market value transactions and the statute of frauds, that the value of a realtor’s profession is honorary and civic in nature and not just about capitalistic salesmanship. It is like having insurance, we don’t like the co-op expense, but it protects those who need it. Only in this case, all benefit in some way.
Buyer Representation
In most areas the Multiple Listing Service (MLS) is ran by your Local County Board of Realtors that gives listing access to participating brokerages and most brokerages, if not all, participate. You’ll need to check your local area to see if this is the case. Rules governing listings in the MLS, typically specify in the listing, or have as there norm, a percentage of commission that will be split in some fashion between a buyers agent and a sellers agent. Therefore, if the existing rules that govern, have gone through considerable trouble to get the seller to “put up” enough commissions in the asking price to cover both the sellers agent AND the buyers agent, you may want to use the system because it has made your representation free.
Now given the current system, that while the seller pays both ends when selling and as a buyer they pay nothing, there is another way to look at how cost is transferred across the table. If the seller uses a realtor to sell and then uses a realtor to buy it could have been arranged that given an equal sell of home to an equal purchase price, with a total of 6% being incurred, that a 3% charge is levied for selling and 3% for buying. Only in our current system, you pay it all when selling.
This can tend to underscore the importance as a buyer, to be sure to defer to your own realtor, if you see other realtor signs or other opportunities for things you need information on. This is in the case you plan on using the free representation of a buyers agent provided you on participating realtor sold homes. That’s right free, because the Seller has already agreed to “foot” the bill for your side of representation, already represented in the asking price.
Many people will sometimes call the sign in the yard, and as the buyer may end up choosing to have the Sellers realtor represent them, in states where it is legal. Do people understand fully that, that Sellers Agent will get both commission sides, those held out for representing his seller and now those for representing you, the buyer? So, you may want to be careful when “choosing” to “go the sign in the yard” route. If you are calling for information, you may want to introduce first that you have an agent, but that you have some questions. Don’t expect the Sellers agent to direct you toward any other representation, but what he or she will gain by wooing you with the enticements you now possibly feel for a showing of that property, which if in showing it to you, you may now tend to a felt sense of obligation toward that agent. Still, only at the very end of that trail in having the Sellers agent help you, if in making an offer, will you find in bold letters, the disclosure of such Limited Agency situation, which you now find yourself in… that ‘you do not have to go that route, but are now consenting to it’ (yes, but fine, after you’ve inadvertently made that agent do all the work and he/she is holding a pen for you to sign it).
If the Seller represents both sides, this is commonly referred to as Limited Agency. Limited Agency is when the agent that represents the Seller is also going to be representing the Buyer. Limited Agency has the following possible disadvantages:
The listing or LIMITED realtor may not be inclined to:
- Go after information that can be used to leverage your position as a buyer and there are all kinds of questions a buyers realtor can ask the listing realtor if they are astute to the art of negotiations that appreciates that knowledge is power.
- Share with you any reasons why not to buy "this" property.
- Negotiate the best price and terms for you, because that would hurt the interests of his Seller.
- Include contingencies in the contract that protect YOU rather than the seller, including standard clauses.
- Keep confidential any information that could hurt your bargaining position. This is where your bottom-line on price or something else that is confidential, un-be-knownst to you, may have been shared with the Seller.
- Remain neutral, when taking sides is an option. For example; a parent would never confess to admitting to having a favorite child, even if his/her siblings know who the favorite is.
Where Limited Agency is legal there is a possible advantage:
It is possible that you may have less trouble melding terms you know the Seller will accept when his/her agent is also present to help you with yours; typically when you thing you can make your case stronger than the other agent. Although it may not always happen ideally, the Limited Agent can try to depict an objective picture of value, when it comes to helping you negotiate an asking price. However, fiduciary (or ethical) duties keep the ‘Limited’ Agent from giving away the Sellers motivations, bottom line, etc. In other words, the agent is bound by fiduciary duty to become less involved in sharing or ‘going after’ otherwise tedious (research driven) or privy information. Thus, the Limited Agent acts as neutral as possible.
Remember that in most cases, having an agent, can really help you, both in your search process and in being represented well. Now may be the time, to become knowledgeable and comfortable with the choice of an agent and thereby in finding your dream home to be purchased.
The above information can depend on the area so check with local professionals deemed by local (sometimes national) governments to be the appropriate professionals for consulting and doing real estate transactions, including disclosure for appropriate professionals in all areas of expertise and confirming or denying any information held in this article.
Brian Habel is an active full time real estate agent with RE/MAX First Realty in St George Utah- the fastest growing community in the U.S. for over a 5 year period of 2000-2006. His background includes both construction and paraprofessional work as a Child & Family Counselor making for good people skills, sales skills, and housing knowledge. He specializes in cutting edge service and technologies for both finding and selling St George Utah Real Estate. Check out Brian's blog at St George Utah Real Estate Blog
Article Source: http://EzineArticles.com/?expert=Brian_Habel
Remove the Fear From the Home Buying Process
Especially if you're new to the home buying experience, it can seem like an intimidating process, fraught with frustration and full of potential pitfalls. It can be a scary proposition to buy a home, but here are some ideas you can use to take the fear and risk out of the home buying process.
Your first step is to remove any doubt as to whether you can qualify for the home of your dreams by getting an approval from your financial institution before you even begin looking. Believe me, after you've fallen in love with a home is NOT the time to find out that you can't qualify for the loan it will take to get into that home. Knowing how much home you can buy will take a huge amount of uncertainty out of the process. It will let you know what price range to shop in, and can save heartache later on, once you've located the home you've been looking for.
Visit your new home at least three times before making your final decision. Each time you visit, you'll notice different things, including flaws that you didn't notice when you first fell in love with the home. You'll be amazed that the things you missed on your first visit, and on your second!
When you do find a home you love, buy an owners title policy. This type of policy is different from a standard title policy, which covers only your loan amount. An owners title policy is relatively inexpensive and also protects your equity in the home.
If your new home includes any land, have the property surveyed so that you'll know exactly where your boundaries are. It's not good enough to have the owner point out which trees mark the boundaries. Often those boundaries have only been agreed upon by various neighbors for many years, and may have no relevance to your actual property lines. If that's the case, it's best to find out before you take possession of the property. Remember, agents can help you with the various sales conventions of the area, but not with legal questions.
If the home is in a subdivision, read the developments covenants, conditions, and restrictions (CCRs) carefully. These will spell out specifically what you can and can't do with your property. The same is true is you're buying a condominium. Find out what your legal rights are and what your association fees entitle you to.
Make certain that the sellers move out according to schedule. This is especially true if you're buying the home directly from the owner. If you're using a real estate agent in the transaction, you can probably ask them to help if it seems as if you might have any difficulty in that regard.
Overall, buying a new home should be an exciting and fun experience. If you pay attention to the details, you can make sure your next purchase is rewarding and trouble free.
FREE report for home buyers: "Home Buyers' Biggest Mistake," visit the Real Estate Credit Help Center. Author Jeanette Fisher teaches first-time home buyers and beginning real estate investors the ins and outs of real estate investing. Free real estate investing information: http://doghousetodollhouse.com
Article Source: http://EzineArticles.com/?expert=Jeanette_Joy_Fisher
Your first step is to remove any doubt as to whether you can qualify for the home of your dreams by getting an approval from your financial institution before you even begin looking. Believe me, after you've fallen in love with a home is NOT the time to find out that you can't qualify for the loan it will take to get into that home. Knowing how much home you can buy will take a huge amount of uncertainty out of the process. It will let you know what price range to shop in, and can save heartache later on, once you've located the home you've been looking for.
Visit your new home at least three times before making your final decision. Each time you visit, you'll notice different things, including flaws that you didn't notice when you first fell in love with the home. You'll be amazed that the things you missed on your first visit, and on your second!
When you do find a home you love, buy an owners title policy. This type of policy is different from a standard title policy, which covers only your loan amount. An owners title policy is relatively inexpensive and also protects your equity in the home.
If your new home includes any land, have the property surveyed so that you'll know exactly where your boundaries are. It's not good enough to have the owner point out which trees mark the boundaries. Often those boundaries have only been agreed upon by various neighbors for many years, and may have no relevance to your actual property lines. If that's the case, it's best to find out before you take possession of the property. Remember, agents can help you with the various sales conventions of the area, but not with legal questions.
If the home is in a subdivision, read the developments covenants, conditions, and restrictions (CCRs) carefully. These will spell out specifically what you can and can't do with your property. The same is true is you're buying a condominium. Find out what your legal rights are and what your association fees entitle you to.
Make certain that the sellers move out according to schedule. This is especially true if you're buying the home directly from the owner. If you're using a real estate agent in the transaction, you can probably ask them to help if it seems as if you might have any difficulty in that regard.
Overall, buying a new home should be an exciting and fun experience. If you pay attention to the details, you can make sure your next purchase is rewarding and trouble free.
FREE report for home buyers: "Home Buyers' Biggest Mistake," visit the Real Estate Credit Help Center. Author Jeanette Fisher teaches first-time home buyers and beginning real estate investors the ins and outs of real estate investing. Free real estate investing information: http://doghousetodollhouse.com
Article Source: http://EzineArticles.com/?expert=Jeanette_Joy_Fisher
Home Buying Tip: 7 Key Questions to Ask a Home Inspector
This home buying tip will help you ask the right questions when researching home inspectors.
A proper home inspection will give you the comfort of knowing your new home has been checked for breakage, disrepair and other problems.
But it all starts with choosing a professional home inspector who can give your home the thorough review it needs. So don't be afraid to ask plenty of questions when choosing a home inspector. Here are seven key questions to ask:
1. What all do you inspect?
Different states have different rules for home inspectors. So you need to know up front what your state requires of inspectors, and then you need to make sure the inspector will actually cover those areas. Ask to see a blank copy of their inspection report or checklist. This will show you exactly what the inspector covers. If they have a problem showing you this document, find another home inspector!
2. What certifications do you have?
Like other home-based industries, home inspection has its share of frauds and phonies. It's safe to assume they represent the minority, but it still pays to ask about certification. A professional home inspector will be happy to tell you about his certifications.
3. Do you specialize in residential or commercial inspections?
Be sure your inspector specializes in what you want him to do. In this case, make sure they specialize in residential / home inspections (instead of commercial property inspections).
4. How long have you been inspecting homes in this area?
General experience is fine, but regional or local experience gives a home inspector an extra edge. For instance, if an inspector has been working in your area for a long time, they probably know about unique conditions to watch for (radon levels, basement moisture, life expectancy of roofing, etc.).
5. How long do your home inspections usually take?
* Home buying tip -- The average home inspection runs anywhere from two to four hours. If a home inspector tells you they can do it in an hour or less, you might want to dig a little deeper. Anything less than two hours is probably not a thorough inspection.
6. How much will the inspection cost?
* Home buying tip -- Home inspections average between $300 and $500. This will depend on the size of the home and other factors. The cost of a home inspection is nominal when you consider the peace of mind it brings, but you still need to ask about the cost in advance. You don’t want to be surprised by an outrageously priced inspection after it has been completed.
7. Can I attend the inspection?
A home inspection is a great opportunity to learn about the inner workings of your home. Many home inspectors will let you proceed through the house alongside them. That way, they can educate you about your roof, heating and cooling system, water heater, etc.
Conclusion
This home buying tip will help you choose a professional, qualified home inspector. As a result, you’ll get a more thorough review of the home before buying it, and you’ll enjoy more peace of mind!
* Copyright 2006, Brandon Cornett. You may republish this article if you keep the byline and author's note, and also leave the hyperlinks active.
Learn more!
This home buying tip was brought to you by HomeBuyingInstitute.com, the Internet's largest library of home buying advice. Increase your home buying intelligence by visiting: http://www.homebuyinginstitute.com!
Article Source: http://EzineArticles.com/?expert=Brandon_Cornett
Home Buying -- Purchasing a Home With no Money Down
As real estate prices soar, many prospective home buyers are finding it difficult to come up with the necessary down payment to buy their home. Luckily, there are several options that can help you get that mortgage with little or in some cases no down payment.
Various banks and lenders offer what is known as 100% financing programs. This is probably what you are being sold if you hear "no money down" advertised. The major drawback to these arrangements aside from the obvious higher monthly mortgage payments and lack of equity is that you will be required to carry private mortgage insurance.
Private mortgage insurance, also known as PMI for short can add an additional $50 - $100 per $100,000 borrowed per month on to the cost of your mortgage. As you can plainly see, this cost adds up fast. PMI is designed to protect the lender not the homeowner. The only benefit PMI gives you is that by paying for it you can qualify for a loan you might not otherwise be able to get.
Traditional 100% financing programs also come with higher rates and closing costs. This makes sense because as the risk to the lender is higher, you can expect that you will be paying for it. In the case of a no money down mortgage, you will face additional qualification requirements. Typically only those with excellent credit are eligible for a no money down home loan.
A 100% financing program may not be your only option. The Veterans Administration offers mortgage programs that feature similar benefits. If you are a qualifying veteran, you may be eligible for one of the VA's low and no money down programs. With a VA loan, there is no limit on the amount you can borrow and unlike in the old days, you can get more than one VA loan over the course of your lifetime.
If none of these options meets your needs, it may be time to consider a little creative financing. In times when the real estate market is slower and homes are not selling well, it is not uncommon to find deals such as rent to own and owner financing. In the case of rent to own, typically you pay a higher monthly payment to the owner with a pre-determined portion of that going in to a down payment savings account. In some cases, the seller will even offer to hold your mortgage outright.
Creative financing options such as the seller financing and rent to own can be beneficial for both parties. The seller makes a profit on the deal and you can get in to a home in a situation where you might not otherwise be eligible for a traditional mortgage. If you decide to go this route and are fortunate enough to find a seller who will work with you be sure to see a lawyer to have the agreement written up in a fair and binding way.
As you can see, there are options for buyers who have little or no money available for a down payment. It may not always be as simple as it sounds like in the advertisement and there are drawbacks to consider, however it is possible to buy a property without putting money on the table at first.
To learn everything you'll ever need to know about Home Mortgage Loans, visit http://www.gethomemortgageloan.com/ where you will learn more about FHA Mortgage Loans and much much more.
Article Source: http://EzineArticles.com/?expert=Joshua_Spaulding
Various banks and lenders offer what is known as 100% financing programs. This is probably what you are being sold if you hear "no money down" advertised. The major drawback to these arrangements aside from the obvious higher monthly mortgage payments and lack of equity is that you will be required to carry private mortgage insurance.
Private mortgage insurance, also known as PMI for short can add an additional $50 - $100 per $100,000 borrowed per month on to the cost of your mortgage. As you can plainly see, this cost adds up fast. PMI is designed to protect the lender not the homeowner. The only benefit PMI gives you is that by paying for it you can qualify for a loan you might not otherwise be able to get.
Traditional 100% financing programs also come with higher rates and closing costs. This makes sense because as the risk to the lender is higher, you can expect that you will be paying for it. In the case of a no money down mortgage, you will face additional qualification requirements. Typically only those with excellent credit are eligible for a no money down home loan.
A 100% financing program may not be your only option. The Veterans Administration offers mortgage programs that feature similar benefits. If you are a qualifying veteran, you may be eligible for one of the VA's low and no money down programs. With a VA loan, there is no limit on the amount you can borrow and unlike in the old days, you can get more than one VA loan over the course of your lifetime.
If none of these options meets your needs, it may be time to consider a little creative financing. In times when the real estate market is slower and homes are not selling well, it is not uncommon to find deals such as rent to own and owner financing. In the case of rent to own, typically you pay a higher monthly payment to the owner with a pre-determined portion of that going in to a down payment savings account. In some cases, the seller will even offer to hold your mortgage outright.
Creative financing options such as the seller financing and rent to own can be beneficial for both parties. The seller makes a profit on the deal and you can get in to a home in a situation where you might not otherwise be eligible for a traditional mortgage. If you decide to go this route and are fortunate enough to find a seller who will work with you be sure to see a lawyer to have the agreement written up in a fair and binding way.
As you can see, there are options for buyers who have little or no money available for a down payment. It may not always be as simple as it sounds like in the advertisement and there are drawbacks to consider, however it is possible to buy a property without putting money on the table at first.
To learn everything you'll ever need to know about Home Mortgage Loans, visit http://www.gethomemortgageloan.com/ where you will learn more about FHA Mortgage Loans and much much more.
Article Source: http://EzineArticles.com/?expert=Joshua_Spaulding
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