Are You a Prepared Home Buyer? 6 Considerations

Congratulations! You’ve made the decision, the time is right, for you to find the house for you, and make it your home! However, doesn’t it make sense, since, for most people, one’s house is their single, most valuable asset, to be as prepared, as possible? As a Licensed Real Estate Salesperson, in the State of New York, for over a decade, I have come to realize, many potential home buyers, enter into this all – important process, with their eyes, seemingly, shut, when they need to plan effectively, and be as prepared, as possible! Let’s briefly discuss 6 considerations, potential home buyers, should keep – in – mind.

1. Pre- approved: Before looking at any houses, discover what you can afford. Meet with a recommended, professional mortgage expert, and ask to be pre – approved! This is far different from receiving a pre – qualification. While pre- qualification’s merely mean, based on a simple analysis of basic data, you provide becoming pre – approved, requires a procedure similar, to what is actually done, to receive a mortgage approval, and submitting more forms, verification, etc. By doing this, a buyer knows, before he starts, how much mortgage, he is qualified for, and thus what price range, he should be looking at. Doesn’t that make more sense?

2. Check out the area: How will you know what area, and/ or neighborhood, you should search in? Walk around potential areas, and get a feel, for the place! Is it quiet enough for you, or too quiet? What about the neighbors? How convenient might your commute be, from this locale?

3. Know what you need, and want: Evaluate both present and future needs. Is this going to be a starter home, or one, where you hope to remain, for a significant period of time? How many bedrooms, and what size, do you need, and want? How about the bathrooms, kitchen, living room, dining room, house style, amount of land, etc?

4. Downpayment and closing costs: Now that you know how much you qualify for, in terms of your mortgage, consider whether you feel comfortable with the necessary amount of downpayment! Be careful to avoid becoming house – rich, but living over your head! Discover your closing costs, and be certain, you are prepared and comfortable, with those expenditures.

5. Monthly charges: Try to evaluate, as closely as possible, your estimated monthly charges! This includes far more than merely your mortgage interest and principle, taxes and insurance. Consider maintenance, creating a reserve for repairs, etc, utilities, and other potential expenditures. As a rule of thumb, be prepared, by maintaining at least 6 months reserves!

6. Be prepared for the unanticipated: What will happen if you undergo a career reversal, or some extended period, with less than your regular income? How long will you be able to continue making the necessary payments? Use the 6 months, rule, but attempt to maintaining a larger reserve!

Prepared home buyers are better able to enjoy owning a house. Will you prepare, as you should?

Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, consulted to thousand, conducted personal development seminars, for 4 decades, and a RE Licensed Salesperson for a decade+. Rich has written three books and thousands of articles. Website: http://PortWashingtonRealEstateOffice.com and LIKE the Facebook page for real estate: http://facebook.com/PortWashRE

Article Source: http://EzineArticles.com/expert/Richard_Brody/492539

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Which Mortgage Program is Best for You?

There are many types of mortgages. It is to your advantage to know about each mortgage type before you start searching for your next home. Most people apply for a fixed-rate mortgage. In a fixed rate mortgage, your interest rate stays the same for the term of the loan, which can range from 10 to 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it, although your property taxes and home owner’s insurance may change during the repayment term of your mortgage. Another type of mortgage is an adjustable rate mortgage (ARM). With this type of mortgage, your interest rate and monthly payments usually start lower than a fixed rate mortgage. But your rate and payment can change either up or down, as often as once or twice a year. The adjustment is tied to a financial index, such as the U.S. Treasury Securities index.

The advantage of an ARM is that you may be able to afford a more expensive home because your initial interest rate will be lower. There are several government mortgage programs, including the Veteran’s Administration’s programs, the Department of Agriculture’s programs, Federal Housing Administration mortgages, and conventional loans. Thoroughly discuss your financial situation with your real estate broker about the various loan options, before you begin shopping for a mortgage.

Below is a brief description of the 4 main mortgage types. The Federal Housing Administration (FHA), Veterans Administration (VA), United States Department of Agriculture (USDA), and Fannie Mae/Freddie Mac (conventional financing) all have different guidelines and down payment requirements. Fannie Mae and Freddie Mac are the most recent sudo-government agencies to launch minimal down payment programs. There are also various down payment assistance programs available to first time home buyers, recent graduates, and low-income households. Most down payment assistance programs have income and sales price limitations and repayment requirements.

• Conventional Financing – Conventional mortgage loans require a minimum 3% down payment. Private mortgage insurance (PMI) is required unless there is a 20% down payment or lender paid PMI is offered by the mortgage company. Mortgages are offered for owner occupants and investors.

• FHA Financing – This financing type requires a minimum of 3.50% down. FHA allows approved nonprofit organizations and/or family members to assist homebuyers with the down payment requirement. Upfront and monthly mortgage insurance is required. Only owner occupied financing is offered.

• Veterans Administration – Honorably discharged veterans or active-duty personnel in the US military who meet specified qualifications are eligible for no down payment mortgage financing. VA Mortgages requires an upfront funding fee unless the veteran is disabled. VA mortgages require no monthly mortgage insurance, but are available to owner occupants only.

• USDA Financing – This mortgage program is available through the United States Department of Agriculture. This loan type allows zero down financing for owner-occupied properties in designated rural areas. Income and sales price limitations apply. An upfront and monthly fee is required. There are two distinct loan types, which include guaranteed and direct loans.

Each of these loan types offer different features and should be fully investigated to determine which loan type fits your credit and financial situation. It is always in your best interest to be pre-approved prior to looking for a new home.

Article Source: http://EzineArticles.com/9726888

What do you Seek From a Neighborhood?

When someone makes the all – important decision, to consider buying a home of their own, it is often easy to become overwhelmed by the many considerations, etc! Obviously, one must think about their personal needs, in terms of rooms, location, etc. They must also be realistic, in terms of balancing their wish – list, from the must – haves, and do so, in order to get the most bang – for – the – buck, while paying attention to their personal finances, and knowing both what they can afford, and what they might feel comfortable paying monthly. Often, doing all of these necessary things, means failing to consider, what they really seek, in their NEIGHBORHOOD.

1. Near; nearby; neighbors: What will you new home be near? Will these things be positive or negative, towards your enjoyment of the house? After the immediate neighborhood, what conveniences are nearby? Have you taken the time to have a conversation with some of the neighbors, to evaluate whether they are the type of people, you’d like to live near?

2. Entertainment; energy: Are you seeking a high, medium or low – energy neighborhood? Is access to the sort of entertainment you enjoy, convenient?

3. Institutions: Is the library, schools, houses of worship, etc, of the sort, which you feel will enrich, living in the location?

4. Groups: Are you seeking to belong to any particular group, or source of activity? Will this be available here?

5. Hospitals: How nearby are hospitals, etc, and are they quality, respected institutions? While you may feel you are young and healthy, and don’t need to worry about this, consider emergencies, etc.

6. Benefits: How will this location benefit you, and what you need, to fully enjoy living where you do? Some individuals buy a home, in certain gated – communities, because of the benefits provided, while others do not feel these to be important.

7. Others: Have you considered the needs, etc, of the others, who will be living with you? If you have children, are there lots of activities, and things for them, to enjoy, as well as quality schools?

8. Restaurants; religious institutions: Are you seeking available to convenient, quality restaurants? Is this location convenient? If religion and belonging to a house of worship is important, are there the type you seek nearby?

9. Hubs: How is the access to various entertainment, transit, etc, hubs?

10. Offers: Write down on a piece of paper, those neighborhood amenities, you seek, and consider if this area offers most of these!

11. Options: Are there any convenient options, in the area? Are they important to you?

12. Delightful: This relates to both creature comforts, as well as safety issues. What is the crime rate, and the rating of the police, fire and ambulance departments/ services? Will this area enhance or deter from you overall enjoyment?

You can’t always get everything you want! But, considering the NEIGHBORHOOD, might be an important factor/ consideration.

Article Source: http://EzineArticles.com/9616335

Stage your Home “for Yourself”!

Many people have a horizon for when they’ll be selling their homes. It could be a year, two years, or five years. The family is growing and they need larger quarters… the kids are grown and they want to downsize… the home is too large as they get older… Florida is alluring… or whatever the reason. When the time comes to put the home on the market, they go all out painting, updating and replacing.

Why put all that money, time, and effort into the home for a new owner? Instead, put that money, time, and effort into a home you’ll enjoy for however long you stay there. When I’ve staged homes for clients who are getting ready to put their homes on the market, I’ve heard so many say, “I wish I had done that sooner so I could have enjoyed it.” Don’t be one of those people.

Take a Good Look at Your Kitchen

An overhaul to your kitchen can be very costly, but there are a few small changes that will make a major difference.

• The least expensive thing to do is give your kitchen a new coat of paint in a color that works with the color of your counters and cabinets.
• Replacing cabinets can be expensive. If your cabinets are out of date or in need of re-doing, think about painting them and changing the knobs, handles, and hinges. That alone can make a big difference.
• Countertops can be another costly investment. If yours are worn or in need of replacement, think about going with a laminate instead of investing in granite or other high-end countertops. Laminates have come a long way in recent years; they offer a wide variety of colors and textures.
• Take all the clutter off your refrigerator door. A refrigerator door looks messy when it’s covered with your kid’s school schedules, magnets, photos, calendars, or anything else. Instead put these items in the inside a door, closet, or cabinet.
• Organize the cupboards and pantry. Remove excess stuff-you know the items you haven’t used in years and probably never will.
• Choose an attractive centerpiece for your kitchen table. Use a vase of flowers, a bowl full of fruit, a ceramic or glass piece, or anything else that appeals to your taste.
• Add a plant or two plants to liven up the room.

Now, Take a Look at Your Bathroom

The appeal of a lovely bathroom can remind you of a luxury hotel or soothing spa. You can create a taste of that in your bathroom.

• Any bathroom can be instantly transformed by adding beautiful, soft towels that you display decoratively. You can purchase a wall-wine rack, roll the towels, and place them where the wine bottles would go. Or you can roll a few towels in a basket with fragrant soaps, bath oils, natural loofahs, and candles to create a spa-like atmosphere.
• Clear off the counters. That includes toothbrushes, the jar of cotton balls, the roll of paper towels, and everything else that clutters the counter. (Instead of having everything on the counter, go to a store such as the Container Store where you’ll find all sorts of caddies, shelves, holders, and de-clutter items.) Get an attractive soap dish or use liquid soap with a dispenser for the bathroom counter.
• If your tub is old and worn and the tiles in your shower are no longer attractive, you can call a company such as Bath Fitter to install a new tub and wall right over the old one. Bath Fitter claims to do the installation in just one day.
• Mirrors often de-silver after years in the bathroom. Replace them, perhaps with mirrors with a lovely frame.
• Replace the faucets, knobs or door pulls, and towel racks for an updated look.
• Include a vase with flowers, pussy willows, or leaves. Either pick them from your garden or get silk ones.

In and Around the House

Take a look around your home to see what else you may be able to update or redo:

• If your wooden floors are worn or dirty from all the years of walking on them, it’s time to have them sanded and coated with polyurethane.
• If your carpets are stained or no longer look clean, it may be time to have them professionally cleaned or replaced.
• If your wallpaper is peeling (and that generally starts at the seams), it’s time to remove the paper and re-paper or paint?
• If your walls are full of fingerprints from the kids or the paint isn’t looking fresh and clean, it’s time to repaint.

Look Outside

• If shingles on your roof are coming lose, it’s time to have the roof looked at and perhaps redone.
• If your driveway has excessive cracks, it may be time for a topcoat or more.
• If you have shutters, make sure the paint is fresh and the shutters they’re attached firmly to the house.
• If your shingles or anything on the outside creates an eyesore, take corrective action.

Article Source: http://EzineArticles.com/9545572

Tips for Selecting a Mortgage Lender

When you buy a home, you’re in for a long-term commitment. You’ll have a mortgage payment for 15 to 30 years, so it’s smart to find the perfect mortgage lender for your requirements. Consider the following tips when making your decision:

Decide what kind of lender you want – small or large. If you prefer a more personal touch and a lender who will know your name you will more than likely want to go with a smaller lender. If you are the type of person that cares more about the interest rate, a large lender may be your best bet.

Talk to your real estate agent. A top-notch agent will not limit their recommendations to their in-house lenders. And most importantly, savvy loan officers take especially good care of clients that are recommended by real estate agents. So definitely use this to your advantage. This personal connection can be a big help when it comes to reducing closing costs.

Know your potential lenders. The competition between lenders is fierce so it’s best to know what’s available. I highly suggest going local. Online lenders are plentiful, but a local company comes with the added benefit of knowing the neighborhoods, properties and the real estate professionals in your area. Here are the most common lenders you can choose from.

· Credit Union: Member-owned, offering favorable interest rates to their members.

· Mortgage bankers: These are bankers who work for a specific financial institution and package loans for the banks underwriters.

· Correspondent lenders: These types of lenders are often local mortgage companies that fund your loan but rely on other lenders such as Wells Fargo, Chase and others to sell your loan to as soon as it is funded.

· Savings and loans: These institutions were once the base of home lenders but are now very hard to find. S&Ls are smaller institutions that are very community-oriented and worth speaking to.

Always compare rates from several lenders. This is where your homework begins. As I noted above there are many lending options – neighborhood banks, commercial banks, credit unions and online lenders, so you have many options to consider.

Once you have several quotes, compare the rates and costs and decide which makes the most sense for you. Don’t forget, everything is negotiable so make sure you have the best rate available because a low rate can save you thousands of dollars over the life of the loan.

Think beyond the dollars. Keep in mind that finding a mortgage lender involves more than just obtaining a good interest rate. Make sure the company is staffed by professionals who will effectively steer you through the entire process. Choosing a lender that displays honesty, integrity and are committed to making you the best deal possible is of utmost importance.

Narrow your choices by asking your friends, family or even your real estate agent for referrals. Once you have some options make sure you ask them the right questions:

· How do you communicate with your clients – email, text or phone? And, how quickly do you respond to your messages?

· What are your turnaround times on preapprovals, appraisals and closing?

· Ask what fees you will be responsible for at closing and can any of those fees be rolled into the mortgage?

· Don’t forget to discuss the down payment requirements

Get Your Credit Score in shape, as it will largely determine the terms of your mortgage. The higher your credit score the more power you will have to negotiate better rates from your potential lenders.

It will be important to make sure your credit reports are accurate. Get your report from the three major credit bureaus: Equifax, Experian and TransUnion. Remember, they are required to provide you with a free copy of your credit report every 12 months.

Try to pay off your high-interest debt in an effort to lower your overall level of debt as quickly as possible. This will improve your debt-to-income ratio. Also, paying off credit cards and unsecured loans before you buy a home will free up more funds for the down payment.

Always read the fine print. Payments on a mortgage are not the only costs associated with homeownership. Make sure you ask your lender to line out all the additional costs – closing costs, points, origination fees and any transaction fees there might be. Ask your lender for an explanation of each cost.

Always examine the fine print of all your loan documents, especially the Loan Estimate and Closing Disclosure. These documents will tell you the exact finance rate, who pays the closing costs, contingencies, closing date and many other important details.

Just remember, there are throngs of mortgage lenders ready to accept your application. Just because a lender accepts your application doesn’t mean they’re the right option for you.

Article Source: http://EzineArticles.com/9530628

You Might Want To Buy Your Retirement Home Before You Retire

If you’re considering retiring in the next 8-10 years then you might want to start considering to buy your retirement home! If you buy it early there can be significant financial benefits. This is especially true if you’re planning on getting a mortgage.

By doing so early you’ll be taking advantage of the current low-interest rates as well! 30 year fixed mortgages have dropped to approximately 3.4% currently. Not only are there some appealing saving options but there’s considerable financial benefit to putting money towards your retirement home while you’re still employed. So let’s jump right into some of the most important reasons you should consider buying your retirement home so far in advance.

Getting approved for a mortgage

When your loan application is being evaluated your debt-income ratio will be a very important aspect of that evaluation. This ratio will obviously be in a better position while you’re employed. Which means, you’ll have an easier time applying for your mortgage while you still have a reliable income.

If you waited to apply for the mortgage until you retired, it’s possible that you’ll minimize the size of the loan you could potentially apply for. Also, you can start chipping away at that mortgage ahead of time and take less of your allotted retirement income out of your pockets. Essentially, you’re getting well ahead of the overall financial impact a mortgage can have.

Renovations

Odds are when you finally pick your retirement home you’ll be looking to make some improvements. If you’re purchasing a newly built home or building your home from the ground up however, you can ignore this section.

It’s definitely recommended that you set yourself a budget for the renovations you might have in mind when planning to buy your retirement home. Referring back to the first point made about securing your mortgage early. It’s also very beneficial to have a steady income from working full-time during the renovation process as well. It’s always possible to uncover a random setback and this steady income can help you deal with it accordingly.

Chipping away at that mortgage

Like I said earlier, beginning to pay off your mortgage early will put you well ahead of the game once you buy your retirement home. The ideal goal is to obviously be debt free during retirement. For that very reason, some may choose to rent when they retire. However, if you’re choosing to become a homeowner, the sooner you can start paying off that mortgage the better!

Not only are you getting ahead of the game initially when you buy your retirement home, but you could make additional payments as well. Getting ahead 8-10 years on that mortgage is one thing but being able to possibly afford additional payments while you’re employed? You could cut your mortgage to a 15-year mortgage by the time you’re ready to move in.

Long term plans

Budgeting your living expenses for retirement and to buy your retirement home, can be rather unpredictable. However, if you already have your retirement home set aside you can get a very good idea of what it will cost on a monthly basis to live there. So owning your home in advance gives you years of planning in terms of financial allocation.

Your portfolio

Finances willing, if you can carry two mortgages at once after you buy your retirement home, you have the opportunity to rent out the house those 8-10 years before you actually want to move in. Essentially allowing tenants to cover the cost of the mortgage while you’re waiting to retire. Or you could allow yourself to retire early by utilizing the additional income from your potential tenants.

Additionally, you should look into the potential tax benefits of making it a rental property. There are a number of benefits to renting out your additional property after you buy your retirement home, before you actually decide to move in.

If you have any more questions regarding how to buy your retirement home, don’t hesitate to ask! Your retirement should be treated with careful planning. Living in comfort financially should be a very manageable task for you to accomplish.

Article Source: http://EzineArticles.com/9506839

Don’t Waste Your Time!: Get A Mortgage Pre-Approval

You’ve made that very personal decision, to consider buying a house of your own! You may have put off this moment, for a variety of reasons, including; indecisiveness; geographic; job-related; financial, etc., but now, you think, you’re ready! So, what should you do first! The logical first-step is to discuss finance, and the all-important mortgage information, with a qualified mortgage broker or banker. If you have received a recommendation from someone you trust, and is knowledgeable, begin with a conversation with that professional. If not, interview, and hire, a real estate professional, who will take care of your needs, and provide you with recommendations of reliable mortgage professionals. Either way, be certain to get a Mortgage Pre-Approval, before you begin your quest for the house of your dreams.

1. A pre-qualification is not a pre-approval: Beware, there is huge difference between being pre-qualified, and pre-approved! The former means that based on the basic information you have provided, you would be able to qualify to get a certain size mortgage. On the other hand, the latter means the broker/bank, has done a thorough review of your income, liabilities, etc., as they would before they issued a mortgage, and, as long as the house comps out, you will get a mortgage.

2. Other debts/liabilities: Lending institutions use a formula to determine how much mortgage one might qualify for. It takes into consideration all debt owed, and that combined with your new mortgage debt, cannot exceed a certain percentage. That is, in addition to, the mortgage must fall within a certain percentage of one’s income.

3. What can you afford as a down-payment?: Traditionally, you are asked to put down 20% down-payment, and you can then use your mortgage for the balance. However, there are loans available, which require less down, but that means a higher monthly payment! You may also be in a position to put down more, and carry a smaller mortgage. This must be a combination of what you can actually afford, as well as your comfort level.

4. What can you afford monthly: The lending institution will come up with a maximum figure, they say you can carry monthly. They base this as a percentage of one’s income. However, you may not feel comfortable with that amount of debt, so you must take that into consideration. All this valuable information will help you decide the price ranges you should look at, when you search for a home.

5. Move to the front of the line: Let’s say you’ve taken into consideration the above information, and now are prepared and ready, to begin your search, in earnest. You have searched, and found the house you want, but others feel the same way. When there are competing offers, the buyer with a Pre-Approval, often is given more consideration, because it is considered a better bet, for the seller.

It is the responsibility of a qualified real estate professional to help you find the right house, at the best available price, with the least amount of hassle or wasted time! Make it easier on yourself, by beginning properly, by getting a Mortgage Pre-Approval.

Article Source: http://EzineArticles.com/9501868