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
Saturday, September 8, 2007
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
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
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
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
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.
http://realestate.aol.com/article/_a/which-mortgage-is-right-for-you/20060825120209990002
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.
http://realestate.aol.com/article/_a/which-mortgage-is-right-for-you/20060825120209990002
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.”
http://realestate.aol.com/article/_a/beware-new-1-percent-mortgage-scams/20060825103809990001
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.”
http://realestate.aol.com/article/_a/beware-new-1-percent-mortgage-scams/20060825103809990001
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