Home buying tip #1: Use a realtor
Using an Arizona realtor can greatly increase the chances of finding a home that you really like, are satisfied with, and that is within your budget. Realtors have full access to the MLS (Multiple Listing Service) listing database, which has the most homes for sale listings available anywhere and can speed up your property search.
Home buying tip #2: Choosing a neighborhood
Choosing a neighborhood should come before you pick out an actual home. You want to make sure that the home you ultimately pick is in an area where you feel comfortable living and where your children have access to the best schools. If you don’t choose a specific neighborhood, at least designate a general area in which you would like to find your new home.
Home buying tip #3: Choosing a home
Once it is time to choose your actual home, there are certain things that you may want to look for. You need to ensure that it has the proper amount of bedrooms, at least 1.5 baths so that you will have a bathroom on the main floor for your guests to use, and a suitable amount of garage space according to the number of cars you own. You may also want to plan for the future, since buying a home is a long-term investment. For example, if you plan to have more children, make sure you buy a home with the necessary extra space.
Home buying tip #4: Know if you are ready to buy
Knowing if you are ready to buy a home should be evaluated before you sign for a mortgage. You can look for a home that you would like to buy and check out your options but, before you sign on the dotted line, there are a few others things to consider, such as knowing the benefits and the costs of owning a home as opposed to renting.
Home buying tip #5: Know the benefits of home ownership as opposed to renting
The benefits of home buying, as opposed to renting, are that sooner or later it will be yours and you will no longer have to pay on it; it gives you something to put up as collateral if you get in a tough financial spot and have to take out a loan; and if property rates rise around it or if you make some home improvements then you can receive more for it than you bought it for, even after interest rates, if you ever decide to sell it.
Home buying tip #6: Know the cost of home ownership as opposed to renting
The extra costs of home buying, as opposed to renting, are that you will have to carry homeowners insurance on it, which will be an extra monthly expense; you will have to fix or repair any issues that arise with the property; and you will have to pay property taxes on it.
Once you have looked at the benefits and disadvantages of home buying as opposed to renting, you will again need to evaluate if buying a home is the right decision for you at this time. Maybe you don’t have the financial means to support all the extra expenses that come with owning a home or you just aren’t ready for the responsibility. Either way, waiting a few years to take the step into home ownership may be best for your situation. If home ownership is the right decision for you, make sure that you do it right and use the above tips as a guide, so you don’t end up disappointed with your purchase.
Jeff Blackwell is the Designated Broker for Easy Living Solutions Realty a member of the Easy Living (R) franchise specilializing in mobile homes for sale. Jeff Blackwell is also the founder of the Arizona Manufactured Housing MLS (AZMH) the original and only Multiple Listing Service designed "exclusively" for mobile homes for sale and manufactured homes for sale in Arizona.
Article Source: http://EzineArticles.com/?expert=Jeff_Blackwell
Friday, November 2, 2007
Home Buying 101 - How Much Earnest Money Do I Need?
Every home buyer loves the process of visiting homes and finding that perfect place to call home. Sitting down and writing the offer is not always as much fun! For many people, the process of buying a home is something they go through only once or twice in a lifetime. New terms and questions come are the norm as the purchase agreement is prepared. As a Realtor in the northeast Twin Cities metro, whether I am working with first time buyers, move-up buyers or empty-nesters, one question always stops the process for a moment of discussion. How much earnest money are you prepared to offer?
The amount of the earnest money varies with each purchase agreement. A buyer must first understand the purpose of the earnest money to determine the right amount to include with the offer.
Earnest money is the funds that a buyer puts down to demonstrate to the seller their seriousness about buying a home. It should be an amount sufficient enough to indicate to the seller that the buyer will not walk away from the deal without good reason. In Minnesota this is traditionally 1% of the purchase price but it can be up more. A lower amount can also be acceptable with some offers. However it is important to be realistic.
A few years back, a potential buyer wanted to put down $100 earnest money on a $300,000 home I had listed. The seller was not impressed and felt it was an unreasonable amount as the buyer could easily walk away from the deal with only $100 at risk.
Generally the earnest money funds are in the form of a check. That money is deposited into the listing broker’s trust fund or escrow account. In Minnesota, the funds must be deposited within 3 days of an offer having been accepted in writing. Yes, this does mean that the check will be cashed in 3 days or less!
If the offer is accepted, the earnest money will be applied to the down payment and/or the closing fees when the closing takes place. If your offer is not accepted the check is not cashed and the money will come back to you. However, if the offer is accepted and the check cashed and then for some reason all contingencies are not met or other situation arises where the sale does not proceed, the buyer does not automatically receive a refund of the earnest money. Nor, does the seller automatically keep the down payment. Buyer and seller must reach an agreement for the cancellation of the agreement and disbursement of the funds.
Teri Eckholm is a Minnesota Realtor with Keller Williams Premier Realty serving clients in the Twin Cities metro area for over six years. Selected as a 2004 and 2005 Super Agent by Mpls/St. Paul Magazine, her extensive sales and marketing background has allowed her to assist hundreds of clients move from across town and across the U. S. Find additional information on Teri and get a FREE relocation package at http://www.terieckholm.com or visit her blog at http://www.mnrealestateupdate.blogspot.com
Article Source: http://EzineArticles.com/?expert=Teri_Eckholm
The amount of the earnest money varies with each purchase agreement. A buyer must first understand the purpose of the earnest money to determine the right amount to include with the offer.
Earnest money is the funds that a buyer puts down to demonstrate to the seller their seriousness about buying a home. It should be an amount sufficient enough to indicate to the seller that the buyer will not walk away from the deal without good reason. In Minnesota this is traditionally 1% of the purchase price but it can be up more. A lower amount can also be acceptable with some offers. However it is important to be realistic.
A few years back, a potential buyer wanted to put down $100 earnest money on a $300,000 home I had listed. The seller was not impressed and felt it was an unreasonable amount as the buyer could easily walk away from the deal with only $100 at risk.
Generally the earnest money funds are in the form of a check. That money is deposited into the listing broker’s trust fund or escrow account. In Minnesota, the funds must be deposited within 3 days of an offer having been accepted in writing. Yes, this does mean that the check will be cashed in 3 days or less!
If the offer is accepted, the earnest money will be applied to the down payment and/or the closing fees when the closing takes place. If your offer is not accepted the check is not cashed and the money will come back to you. However, if the offer is accepted and the check cashed and then for some reason all contingencies are not met or other situation arises where the sale does not proceed, the buyer does not automatically receive a refund of the earnest money. Nor, does the seller automatically keep the down payment. Buyer and seller must reach an agreement for the cancellation of the agreement and disbursement of the funds.
Teri Eckholm is a Minnesota Realtor with Keller Williams Premier Realty serving clients in the Twin Cities metro area for over six years. Selected as a 2004 and 2005 Super Agent by Mpls/St. Paul Magazine, her extensive sales and marketing background has allowed her to assist hundreds of clients move from across town and across the U. S. Find additional information on Teri and get a FREE relocation package at http://www.terieckholm.com or visit her blog at http://www.mnrealestateupdate.blogspot.com
Article Source: http://EzineArticles.com/?expert=Teri_Eckholm
Single Moms Need To Read These Home Buying Guidelines First
Housing is always in need of maintenance. Whether it's a new paint job, a new roof, pest controls, insect extermination or appliance repairs - owning a home can be costly. As any single parent knows, one must maintain cash flow to support the children. If the house becomes a burden and can't be maintained, it becomes more difficult to sell.
Keep in mind that buying a home is only a small part of the expense. In order to recoup your investment realize that maintenance is a separate and necessary part of the investment.
One of the necessary expenses of being a single parent is providing adequate food and shelter for the children. The next most necessary and perhaps greater expense is home maintenance. Here are some tips for single mothers to consider before purchasing a home:
· Have an inspection done. Home inspections will uncover any major flaws in the home before assuming responsibility. It is wise to negotiate with the seller to have any major repairs done before signing.
· Do not buy a house with an old roof on it. Although this should be considered as part of the inspection, you still need to pay attention to this detail. Get an estimate from the inspector about how long the roof may last before needing repairs.
· Make sure all repairs are done before you move in. Get in everything in writing about what will be accomplished before you actually move into your home. Generally, if not done before hand, it will not get done or cause you inconveniencies.
· Buy a policy to cover the major appliances in case they break. As the saying goes, an ounce of prevention is worth a pound of care. I would try to get all new appliances as part of the purchase agreement. But if this isn’t possible, your next option is some type of coverage.
A little foresight and planning can save a lot of money. Anything that is old or aging should be negotiated in the contract for replacement. If the home seller doesn't do it, you can be sure you will be doing it.
An old roof is an expense you can’t afford to overlook. If the roof is double-shingled, the job can be two or three times more expensive than a single-shingled roof. My advice, for a single mother is avoid a house with an old roof on it, have the inspector tell you if it has a double roof or have the seller replace it before you move in.
There are many appliance policies available for major systems such as the furnace, water heater, air conditioner, refrigerator, and dishwasher. The costs are minimal but the peace of mind is priceless. Here’s a great tip for single mothers. Buy an appliance repair insurance plan. Should an appliance need repair, a service person is sent out to inspect the appliance. If it’s beyond repair, most policies allow replacement.
Single mothers don’t have a lot of extra help. There are many things to consider when purchasing a new home. Talk to some existing homeowners about things you need to consider. Most importantly, get the home inspection done. Get that done and you can rest assured you won’t be plagued with unforeseen expenses right away. There is always uncertainty, but with preplanning it won’t cause undue stress.
Joel Williams has written several books and articles for single moms. Check out his website at http://singlemomachievers.com for information, resourceful articles, parenting tools and audios plus methods you can use to become the Mom you intended to be from the start. There is a FREE report to help you get started, "Your 7 Day Personal Program For Taking Back Control Of Your Life As A Single Mom!"
Article Source: http://EzineArticles.com/?expert=Joel_Williams
Keep in mind that buying a home is only a small part of the expense. In order to recoup your investment realize that maintenance is a separate and necessary part of the investment.
One of the necessary expenses of being a single parent is providing adequate food and shelter for the children. The next most necessary and perhaps greater expense is home maintenance. Here are some tips for single mothers to consider before purchasing a home:
· Have an inspection done. Home inspections will uncover any major flaws in the home before assuming responsibility. It is wise to negotiate with the seller to have any major repairs done before signing.
· Do not buy a house with an old roof on it. Although this should be considered as part of the inspection, you still need to pay attention to this detail. Get an estimate from the inspector about how long the roof may last before needing repairs.
· Make sure all repairs are done before you move in. Get in everything in writing about what will be accomplished before you actually move into your home. Generally, if not done before hand, it will not get done or cause you inconveniencies.
· Buy a policy to cover the major appliances in case they break. As the saying goes, an ounce of prevention is worth a pound of care. I would try to get all new appliances as part of the purchase agreement. But if this isn’t possible, your next option is some type of coverage.
A little foresight and planning can save a lot of money. Anything that is old or aging should be negotiated in the contract for replacement. If the home seller doesn't do it, you can be sure you will be doing it.
An old roof is an expense you can’t afford to overlook. If the roof is double-shingled, the job can be two or three times more expensive than a single-shingled roof. My advice, for a single mother is avoid a house with an old roof on it, have the inspector tell you if it has a double roof or have the seller replace it before you move in.
There are many appliance policies available for major systems such as the furnace, water heater, air conditioner, refrigerator, and dishwasher. The costs are minimal but the peace of mind is priceless. Here’s a great tip for single mothers. Buy an appliance repair insurance plan. Should an appliance need repair, a service person is sent out to inspect the appliance. If it’s beyond repair, most policies allow replacement.
Single mothers don’t have a lot of extra help. There are many things to consider when purchasing a new home. Talk to some existing homeowners about things you need to consider. Most importantly, get the home inspection done. Get that done and you can rest assured you won’t be plagued with unforeseen expenses right away. There is always uncertainty, but with preplanning it won’t cause undue stress.
Joel Williams has written several books and articles for single moms. Check out his website at http://singlemomachievers.com for information, resourceful articles, parenting tools and audios plus methods you can use to become the Mom you intended to be from the start. There is a FREE report to help you get started, "Your 7 Day Personal Program For Taking Back Control Of Your Life As A Single Mom!"
Article Source: http://EzineArticles.com/?expert=Joel_Williams
A Helpful Home-Buying Checklist for First-Time Buyers
For most people, buying a home represents the largest and most significant investment they will ever make. So it only makes sense to prepare for that process.
Here are seven things you can do to prepare for the home buying process, before you even begin shopping for a home.
1. Learn the home buying steps in advance.
When you understand the basic steps to buying a home, you will make better decisions along the way. This will help ensure a smoother real estate transaction. Mortgage and home buying lingo is a big part of this, so be sure to read through a few real estate glossaries before you get deep into the home buying process. The last thing you want is to sign a document that uses terminology you don't understand!
2. Review your debt-to-income ratio.
This ratio represents your amount of monthly payments (bills) compared to your average monthly income. Debt-to-income ratio is one of the things mortgage lenders will look at when qualifying you for a loan. Most lenders will prefer your debt not to exceed 20% of your net monthly income. If your debt is more than 20% of your income, it's time to pay down some of those bills. You'll have a much easier time qualifying for a loan if you do.
3. Set your home buying budget.
By using a mortgage calculator, you can get a pretty good idea of how much mortgage you can afford to pay each month. This directly corresponds to the amount of home you can afford to buy. Once you have an approximate budget in mind, you'll be able to limit your home search to those homes that fall within your budget range. This will save you a lot of time and hassle, while keeping your home search financially feasible.
4. Start saving your cash.
Unless you've just won the lottery, there's a very good chance you'll need some cash reserves during the home buying process. For one thing, mortgage lenders like to see that you've got some money saved for your settlement / closing costs. Secondly, the additional cash will come in handy for moving expenses, furniture purchases, home insurance, and all the other compiling costs that go along with buying a home.
5. Review your credit report.
Order a copy of your credit report and look it over for errors, inaccuracies, or anything that just seems odd. This is one of the first things a mortgage lender will do when considering you for a loan, so it makes sense to conduct your own review first. The easiest way to obtain copies of all three reports at once (from Experian, TransUnion and Equifax) is to visit www.AnnualCreditReport.com.
6. Fix credit errors quickly.
If you review your credit report and find something that doesn't seem right, go to the company's website who produced the report (TransUnion, Equifax or Experian) to submit a correction request. These companies are required by law to examine any reported errors on credit reports, and to correct them if necessary. But the process can take time, so you want to stay on top of it to resolve it quickly.
7. Get pre-approved for a loan.
During pre-approval, a mortgage lender will review your credit report, income and overall debt to determine how much of a loan you qualify for. With a "pre-qual" letter in hand, you can be more confident about your buying power in the real estate market. It also shows sellers that you're serious about (and capable of) buying a home. This can be an important factor if the seller receives offers from multiple buyers, as they will likely consider those who have been pre-qualified above those who have not.
* You may republish this article online if you retain the author's note below with the active hyperlinks intact.
Article Source: http://EzineArticles.com/?expert=Brandon_Cornett
Here are seven things you can do to prepare for the home buying process, before you even begin shopping for a home.
1. Learn the home buying steps in advance.
When you understand the basic steps to buying a home, you will make better decisions along the way. This will help ensure a smoother real estate transaction. Mortgage and home buying lingo is a big part of this, so be sure to read through a few real estate glossaries before you get deep into the home buying process. The last thing you want is to sign a document that uses terminology you don't understand!
2. Review your debt-to-income ratio.
This ratio represents your amount of monthly payments (bills) compared to your average monthly income. Debt-to-income ratio is one of the things mortgage lenders will look at when qualifying you for a loan. Most lenders will prefer your debt not to exceed 20% of your net monthly income. If your debt is more than 20% of your income, it's time to pay down some of those bills. You'll have a much easier time qualifying for a loan if you do.
3. Set your home buying budget.
By using a mortgage calculator, you can get a pretty good idea of how much mortgage you can afford to pay each month. This directly corresponds to the amount of home you can afford to buy. Once you have an approximate budget in mind, you'll be able to limit your home search to those homes that fall within your budget range. This will save you a lot of time and hassle, while keeping your home search financially feasible.
4. Start saving your cash.
Unless you've just won the lottery, there's a very good chance you'll need some cash reserves during the home buying process. For one thing, mortgage lenders like to see that you've got some money saved for your settlement / closing costs. Secondly, the additional cash will come in handy for moving expenses, furniture purchases, home insurance, and all the other compiling costs that go along with buying a home.
5. Review your credit report.
Order a copy of your credit report and look it over for errors, inaccuracies, or anything that just seems odd. This is one of the first things a mortgage lender will do when considering you for a loan, so it makes sense to conduct your own review first. The easiest way to obtain copies of all three reports at once (from Experian, TransUnion and Equifax) is to visit www.AnnualCreditReport.com.
6. Fix credit errors quickly.
If you review your credit report and find something that doesn't seem right, go to the company's website who produced the report (TransUnion, Equifax or Experian) to submit a correction request. These companies are required by law to examine any reported errors on credit reports, and to correct them if necessary. But the process can take time, so you want to stay on top of it to resolve it quickly.
7. Get pre-approved for a loan.
During pre-approval, a mortgage lender will review your credit report, income and overall debt to determine how much of a loan you qualify for. With a "pre-qual" letter in hand, you can be more confident about your buying power in the real estate market. It also shows sellers that you're serious about (and capable of) buying a home. This can be an important factor if the seller receives offers from multiple buyers, as they will likely consider those who have been pre-qualified above those who have not.
* You may republish this article online if you retain the author's note below with the active hyperlinks intact.
Article Source: http://EzineArticles.com/?expert=Brandon_Cornett
Home Buying and Down Payments - Show Me the Money!
In a perfect world, every buyer would apply 20% of the purchase price toward a down payment on a loan transaction. They would have 720 credit scores and have worked at the same company (which they do not own themselves) for the past 10 years. They pay their credit card balances off every month, own their car outright, and have a savings kitty equal to their yearly income. Trust me, these people do exist. We lenders just don't see them every day. But doing a loan for these individuals is a walk in the park.
Most of us try to save what we can. That's important when buying a home. However, many mortgage products allow for varied down payment options from 20% down plus closing costs to coming to the table with no money at all.
To come to the table with no money at all, you must either be a first time home buyer or your income is under a certain mandated amount. These programs are designed to boost the home buying segment of our population and allow modest income receiving individuals to be homeowners. Providing they have a good credit and work history and haven't owned a home in the past three years, they are perfect candidates for 100% financing. If the value of the property allows it and the seller is willing, oftentimes the seller can contribute anywhere from 3-6% if the closing costs. Mortgage insurance (MI), incorporated into the monthly payment, will be required by the lender, and normally it's at a reduced rate. If you're income is below a certain level, you can deduct the mi from your taxes. That's how you can show up, buy a house and put no money down.
The next common tier for consideration is a 3% investment. An FHA loan is the first product that pops into mind when hearing the 3% thresh hold, however there are conventional products that also allow this minimal investment, too. Again, mortgage insurance will be required regardless of the chosen product, but other factors such as credit score and loan amount must be considered when deciding if this a good fit for you.
With recent changes in the industry, a 5% down payment is the most typical rule of thumb for no strings attached financing that one sees today. When I say no strings attached, I am talking about applying the most encompassing guidelines or umbrella under which the largest segment of homebuyers can fit - self employed, stated income, etc., included. The widest cast net, if you will. And, the mortgage insurance requirement will still apply.
If you can come up with a 10% down payment, you can probably avoid mortgage insurance by financing another 10% of the purchase price with a subordinate, second loan. Lenders refer to it as an 80-10-10 loan. That means a base loan amount of 80% of value, a second loan of 10% of value and the remaining 10% down payment comes out of your pocket. If your income is above a certain level, this route is attractive because it allows the consumer the benefit of writing off interest on the second loan since they can't write off mortgage insurance. You can also come up with more than 10% down payment and obtain the appropriate secondary financing to hit that 80% threshold that avoids mortgage insurance.
Why wouldn't you always put all of your savings toward a home? Because your money may be spent or invested elsewhere and serve you better. For instance, if you qualify for a first time home buyer program and have $1000 that you had tucked away for a down payment, you could finance the entire purchase price of the loan at a 6% interest rate, your realtor can negotiate with the seller to pay a portion of the closing costs and in turn, you could eliminate that nasty credit card debt that you are paying 13.9% interest on. Make sense?
Of course, your mortgage lender should be able to assist you in examining and choosing which down payment is best or perhaps, necessary for you. Be forthcoming about your goals and needs, and the down payment question should be easily answered.
Kristin's articles on Home Loans are very practical, consumer friendly information written in PLAIN ENGLISH. Consumer education is critical to what is most often a family's largest and only investment - their home.
Article Source: http://EzineArticles.com/?expert=Kristin_Abouelata
Most of us try to save what we can. That's important when buying a home. However, many mortgage products allow for varied down payment options from 20% down plus closing costs to coming to the table with no money at all.
To come to the table with no money at all, you must either be a first time home buyer or your income is under a certain mandated amount. These programs are designed to boost the home buying segment of our population and allow modest income receiving individuals to be homeowners. Providing they have a good credit and work history and haven't owned a home in the past three years, they are perfect candidates for 100% financing. If the value of the property allows it and the seller is willing, oftentimes the seller can contribute anywhere from 3-6% if the closing costs. Mortgage insurance (MI), incorporated into the monthly payment, will be required by the lender, and normally it's at a reduced rate. If you're income is below a certain level, you can deduct the mi from your taxes. That's how you can show up, buy a house and put no money down.
The next common tier for consideration is a 3% investment. An FHA loan is the first product that pops into mind when hearing the 3% thresh hold, however there are conventional products that also allow this minimal investment, too. Again, mortgage insurance will be required regardless of the chosen product, but other factors such as credit score and loan amount must be considered when deciding if this a good fit for you.
With recent changes in the industry, a 5% down payment is the most typical rule of thumb for no strings attached financing that one sees today. When I say no strings attached, I am talking about applying the most encompassing guidelines or umbrella under which the largest segment of homebuyers can fit - self employed, stated income, etc., included. The widest cast net, if you will. And, the mortgage insurance requirement will still apply.
If you can come up with a 10% down payment, you can probably avoid mortgage insurance by financing another 10% of the purchase price with a subordinate, second loan. Lenders refer to it as an 80-10-10 loan. That means a base loan amount of 80% of value, a second loan of 10% of value and the remaining 10% down payment comes out of your pocket. If your income is above a certain level, this route is attractive because it allows the consumer the benefit of writing off interest on the second loan since they can't write off mortgage insurance. You can also come up with more than 10% down payment and obtain the appropriate secondary financing to hit that 80% threshold that avoids mortgage insurance.
Why wouldn't you always put all of your savings toward a home? Because your money may be spent or invested elsewhere and serve you better. For instance, if you qualify for a first time home buyer program and have $1000 that you had tucked away for a down payment, you could finance the entire purchase price of the loan at a 6% interest rate, your realtor can negotiate with the seller to pay a portion of the closing costs and in turn, you could eliminate that nasty credit card debt that you are paying 13.9% interest on. Make sense?
Of course, your mortgage lender should be able to assist you in examining and choosing which down payment is best or perhaps, necessary for you. Be forthcoming about your goals and needs, and the down payment question should be easily answered.
Kristin's articles on Home Loans are very practical, consumer friendly information written in PLAIN ENGLISH. Consumer education is critical to what is most often a family's largest and only investment - their home.
Article Source: http://EzineArticles.com/?expert=Kristin_Abouelata
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