Buying Your First Home is a Big Decision

Buying a home is one of the greatest investments you will ever make. The best — and least stressful — way to purchase a home is to be well educated throughout the process.

Before you even start looking for a house to buy, you need to review your financial situation. This will let you know how much of a down payment you can afford and how large a monthly mortgage payment you can handle. Lenders will look at the ration of how much you make to how much you owe. Most will require that your monthly housing costs remain under 28% of your total monthly income and that your total debt is less than 36% of your monthly income.

But you should look at what fits into your budget, not what the lender says you can afford. If you are currently making a rent payment of $1200 a month and barely getting by, how could you expect a mortgage of that size with the added insurance and maintenance costs of owning a home? You have to go with what works for your budget and finances. Remember, you can always work your way up to a larger home over time.

Once you have determined how much home you can afford, you need to check on your credit report and score. Lenders will rely heavily on your credit score when deciding whether or not to lend to you. It will also help decide how much interest you will pay. Your credit score is determined by the information in your credit file. If something is incorrect, your score will be affected.

Your score is made up of your payment history, your outstanding debts and how often you apply for credit. Most lenders will use your FICO score. If you have a score of over 700, you should have no problem finding financing.

The best way to improve your credit score is to pay your bills on time. You can also pay off your credit card debt and hold off from applying for new credit to raise your score.

It is best to review your report to make sure it is accurate well in advance. It may take time to clear up any errors before you apply for a mortgage.

In today’s real estate market, sellers like to work with buyers who are pre-approved for a mortgage. Pre-approval means that you have submitted a complete loan application and that the lender has verified your information, checked your credit and determined how much mortgage you can borrow. When you are preapproved, the lender is saying that you can borrow a certain dollar amount.

With pre-approval, the seller knows you have financial backing and you know exactly how much you can spend. This keeps you from a lot of stress of worrying if you will be approved for a mortgage for your dream home. You already know what you can afford.

Take the time to prepare to buy a home before you even start looking, it will save you a lot of stress and make the process much easier.

Buy Or Rent?

Should you buy or rent? It depends on your circumstances, and the real estate market where you are going to live. Years ago, I sold a home for a young couple who owed almost as much as the sales price on their house. They needed to take money from savings to pay the closing costs and sales commission. You can bet that they wished they had rented for the couple years they lived there.

 

This brings up the first thing to consider when comparing buying versus renting: the amount of time you’ll be there. Buying and later selling a home will usually cost about 10% or more of the value of the home. These costs mean that if the home only went up in value 10% or so in the year or two you lived there, you won’t be gaining anything (equity gain from principal pay-down is very little in the first years). You’ll often be better off renting if you’ll be in a town for less than a few years.

 

What about towns with faster rates of appreciation? Have you done some serious homework? If not, to assume appreciation will be more than the rate of inflation is just gambling. The sellers in the example above sold for the same price they bought the house for two years earlier – and this was in a decent and growing area. You can’t count on fast appreciation just because it has been that way recently.

 

<b>To Buy Or Rent – Cost Comparison</b>

 

Looking at buying versus renting, you have to take into account that in many places it cost much more to buy. In Tucson, Arizona, for example, a small home can cost $200,000. The mortgage payment, taxes, insurance and maintenance will add up to about $1,600 per month, but you can rent the same size home for about $800.

 

What does that mean? Many real estate fanatics will say you’re at least buying something for your money, and renting is throwing your money away. Of course in this example more than $1,000 of your payment will be going towards interest alone, and that’s not buying you anything.

 

Suppose you can afford the $1600 per month, but instead you rent for $800 and put the other $800 into a decent safe investment that makes you 5%? In three years you’ll have over $30,000 in this account. If the home appreciated at 6% per year (it has been more like 25% per year recently, but that can’t continue, and assuming so is not planning, but gambling), it would be worth $231,000. The costs of initially buying it and then selling it would be around $13,800 (2% buying and 6% selling), leaving you with a gain of about 19,000 once we include your principal pay-down.

 

In other words, you would be at least $11,000 better off if you rented and banked the difference. Every market is different, of course, so you have to do the math. Compare the total costs of owning versus renting, and then make safe assumptions about the rate of appreciation for homes.

 

If you’ll definitely be in one place for a long time to come, it will almost always be better to buy than to rent. In the last example, buying becomes a better bet after about four or five years. Also consider that if you get a fixed rate mortgage, your payment will never change, a benefit landlords won’t offer you that on your rent payment.

 

To sum up, look at the time you’ll be there, the comparison of total monthly costs, whether rents are going up fast, and whether you have good reason to believe home prices will be going up fast. Then look also at all the personal factors. Do you want to be responsible for the maintenance, yard work and unpredictability of ownership problems?

 

To buy or to rent? In the end, you have to work this one out by yourself.

 

 

Build A New House Or Buy An Existing One? Use Your Head And Your Heart.

I am living in living in the fourth house I have purchased during my 23 years of home ownership. To some that may seem like a lot of houses, to others it may seem like I’ve just started. The simple fact is we Americans move a lot… 11 or 12 times in a lifetime depending on whom you consult. Chances are you are going to purchase a house during quite a few of those moves and somewhere along the line you may have the opportunity to build a new home.

 

Should you?

 

Everyone has fantasized at some point about his or her dream house. You may want closets big enough to live in; a bathroom that doubles as a spa; a kitchen in which you could produce programs for the Food Network But, as in most fantasies, there is usually some epic journey required to achieve the goal. And building your dream house follows that plot line all too closely.

 

But isn’t it the dream that makes the quest worthwhile? Yes, if you can weather the storms and battles along the way. And the determination to keep moving forward is usually a function of a strong will and a big heart. But it helps to use your head before you set off on your personal version of “The Lord of the Rings.”

 

It is likely that you have options when you begin the process of buying a home. There may be existing homes in the area that are affordable and that meet your needs. But there are always things about any property or house that don’t exactly meet with your approval. The basement may not be finished or the yard may be too small or the interior décor may have to be entirely redone. It is virtually impossible to buy an existing home without making compromises.

 

Building new allows you to imagine, design and build the home that accommodates needs and amenities that are important to you… within a budget of course. And that is one thing that must be considered. A new home will be more expensive, on a cost per foot basis, than an existing one. That is due to the cost of land, the price of building materials and labor expense. You might also find that taxes are high as a new area is developed and the municipal authorities factor in the required infrastructure for a growing population and the need for services like education, law enforcement and recreation. You may find yourself subsidizing some of these costs as an area develops.

 

The ongoing costs associated with an existing house are more predictable. However, there will likely be more maintenance expense than for a new house and energy costs tend to be higher with older properties because newer homes are more energy efficient.

 

Commuting costs may be an issue. Developers must go further and further out to find enough land to accommodate a new subdivision. That may mean higher costs for commuting to work and to access other businesses and venues that may be closer to the nearest major population center. You should consider this from both a monetary perspective and to determine if you are comfortable with an additional investment of time.

 

If your new house is built in a subdivision there may be ongoing fees required. In addition, there may be covenants that are designed to protect property values that may apply serious restrictions on your ability to enhance your home and/or your property down the road.

 

A new home needs new landscaping. This may be included in the price of the home but there will likely be a limit to what is covered under the agreement. To landscape the property in a way that is truly satisfying may require an additional outlay.

 

Beware of construction delays! Building contractors are notorious for setting deadlines they miss and making promises they can’t keep. Make sure you do some thorough research about the builder and his track record before you commit. Weather is always unpredictable and may have an effect but that should be factored in from the start.

 

A new subdivision can be a hornet’s nest of building activity.  If you move into your home early in the process be prepared for hammering, sawing, trucks, mud and general chaos for quite a while as the subdivision progresses. This is a lifestyle issue and is a temporary inconvenience. But some have found this level of activity disconcerting and disruptive especially when they are settling into their “dream home” and trying to savor the experience.

 

If you build new be prepared to stay for a while. With new construction all around you it would be difficult to compete with the rest of the properties available for others who want to build a house from the ground up. You would have to make it worth their while and that usually means a compromise in price.

 

All this being said (and trust me there is more that could be said) there is nothing quite as satisfying as showcasing the house to family and friends that you designed and built and that reflects your unique vision and personality. If you survive the journey, you will likely have turned your fantasy into reality.

 

 

Best House Color to Sell

Love at first sight is a concept that applies to the real estate market. So, what is the best house color to sell your home to a love struck buyer?

 

Best House Color to Sell

 

When you go to social events, do you make an effort to snazzy yourself up? Of course you do. The simply fact is attraction is a key factor in forming relationships and the same applies to your house. When you put the house on the market, you need to make it look good for the dates with potential buyers. The color of your house can make all the difference.

 

First, there is no absolutely correct answer to the best color. Instead, the decision depends on the makeup of your home and the surrounding landscape. Let’s take a look at some issues:

 

1. Whatever color you choose, make sure it doesn’t clash with the other homes in the neighborhood. An otherwise appropriate color could end up making your house an eye-sore.

 

2. The Roof. What color is the roof on your home? If it is a red tile roof, off-whites are probably going to be the best choice. Dark green will not. Unless you are going to invest money in a new roof, make sure the paint color doesn’t clash with it.

 

3. Highlights. If there is a particular part of your house that should be emphasized, used light colored paint around it to draw attention.

 

4. Hide It! Conversely, if there are parts of the house that are mundane, use darker colors to draw attention away from them.

 

5. On large flat surfaces, such as the side of a garage, keep in mind the color you choose will have a washed out appearance.

 

Now we get to the fun part. After considering the above issues, make a preliminary list of colors and buy small cans of each color. In a private area of the house, start applying samples strokes a couple feet long and a foot or so wide. Try to paint examples in both shaded areas and those exposed to the sun.

 

Do not immediately judge the results of your experiments. Instead, wait a few hours for the paint to dry and then start comparing. Dry paint takes on a very different appearance than wet paint.

 

Once the paint is dry, take a long look at each sample. You will typically find the colors look much different than you thought they would. You may find one color is perfect or you may find something a little different would be best. Either way, you’ll have come up with the best house color to sell your home.

 

 

Bathroom Design Strategies That Increase The Value Of Your Home

When it comes to adding value to your property, the experts in real estate will agree that to capitalise in the bathroom and kitchen almost certainly guarantees profitable returns.

 

If you’re considering making your home appealing to potential buyers, then one of the first places to start is in the bathroom. With countless accessories and appliances on the market, making a decision that will ultimately allow you to reap the rewards is daunting.

 

When it comes to bathroom design, what is it that most people really want? Would choosing a spacious whirlpool bath above a traditional bath be financially beneficial in the long haul?

 

Wouldn’t designing your bathroom be a much easier task if you were armed with a guideline of what tickled the fancy of potential homebuyers? If you’re going to design your bathroom get it right the first time round to avoid flushing away hard-earned pounds.

 

Hello simplicity

 

From as far back as the 1960s much focus was placed on bold colour in the bathroom. Patterned wall tiles of nautical creatures and over-the-top colours were the trend, along with plastic. Plastic bathroom décor was the craze, from bold orange, olive green, mustard yellow and chocolate brown coloured toothbrush, soap and towel holders, to thick patterned plastic shower curtains that screamed colours of the boldest nature.

 

As the times moved on, the 1970s and early 1980s became a period when gold bathroom fixings and furnishing, such as taps, towel rails and toilet roll holders, were considered very stylish. These ostentatious gold trimmed features were all the rage, and bathroom décor was ‘loud’.  Added to this were those once delightful bathroom suites in colours avocado, coral pink, and chocolate brown. Bathroom colour has changed dramatically over the past decade, and shades have become more neutral, sometimes with a hint of colour that adds a complementary vigour to the overall scheme.

Of the many hundreds of people who took part in Plumbworld’s recent bathroom survey, an overwhelming 82 per cent said they “hated” the once glorified avocado and coral pink bathroom suites, colours remnant of 1970s and 1980s, which are typically characterised as being dark and dull.

 

According to the survey, chrome bathroom taps were much preferred to gold.

 

So, when designing and decorating your bathroom keep those dark colours at bay, consider white suites, and opt for chrome fixings and furnishings instead of flashy gold.

 

Shower power

 

When planning the design of your bathroom, one of the most important aspects to consider is placing a shower. Some bathrooms don’t have adequate space to include a shower cubicle, so assess your options. Consider installing a shower over the bath if space is limited.

 

The survey showed that 94 per cent of its participants believed that a shower in a bathroom was very important, and 81 per cent said they preferred a separate shower enclosure in a large bathroom. Almost 65 per cent said their ideal would be a power shower, while 27 per cent preferred mixer showers, and only 12 per cent opted for electric showers.

 

If you have chosen a shower over the bath, then think about placing a fixed glass screen instead of a shower curtain. It may cost a few extra pounds, but more than half of the survey’s contributors preferred a fixed glass screen to a shower curtain.

 

Choosing your bath tub

 

Contrary to common belief, adding a whirlpool bath to increase property value doesn’t always do the trick.  So if you’re contemplating selling your property, try to avoid purchasing a whirlpool bath in the hopes of gaining additional profit.

 

The survey revealed that close to 53 per cent of its participants were not phased by them, while only a small 38 per cent of participants “loved” them. Surprisingly, 62 per cent said they had “no strong view” towards corner baths either, which means the traditional rectangular baths still hold clout against their spruced up counter parts.

 

Bathroom flooring

 

Try to avoid the urge to place carpets on the bathroom floor, according to the survey it is not too favoured. The survey showed that the preferred floor covering was tiles, with 75 per cent saying they “loved” a tiled bathroom floor. Popular vinyl flooring has not yet lost its place in the bathroom, with more than 61 per cent saying they didn’t have any strong likes or dislikes towards it.

 

When choosing your bathroom flooring, tiles is the favoured option, but if the budget is tight, then vinyl flooring won’t let you down.

Apart from the flooring, make sure your windows look appealing. When it comes to dressing your bathroom windows, steer clear of those bathroom nets and fabric curtains. The survey showed that 94 per cent said they favoured blinds in the bathroom to curtains.

 

Keep it clean

 

If you are planning to put your home on the market, inspect your bathroom for those small generally unnoticed flaws, like mould on the silicone sealant around the bath, and even on your shower curtain if you have one. Potential homebuyers may notice these small faults, which could send then running!

 

 

Basics Of Home Buying

The most important investment you will ever make is probably the purchase of a home. Finding the right home for you can be a long and arduous process, but there is no getting around that.

 

Know Your Wants And Needs

 

Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:

 

– Location (in a particular city, school district or neighborhood)

 

– Size — how many bedrooms and bathrooms

 

– Parking — a 1-car garage or 2?

 

– Style — 2-story house or ranch style home?

 

– Heating — central heating and/or air conditioning?

 

Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:

 

– high-traffic area.

 

– high noise area (airport, train station or highway in close proximity)

 

– maintenance — major repairs needed

 

As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You’ll want to add or remove features, or perhaps you’ll become willing to make compromises. Realize that you most likely will not find the “perfect” home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.

 

Get Your Credit Report In Order

 

Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt. Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.

 

Research Your Home-Buying Options

 

Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?

 

A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.

 

Get Pre-Approved For A Loan

 

You’re ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.

 

Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.

 

Find A Good Real Estate Agent

 

It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you’re looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.

 

It’s essential that you have a real estate agent working for you as the buyer, rather than relying on the seller’s agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.

 

To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.

 

These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.

 

 

Are You Ready For A Home?

Have you spent years renting homes or apartments and have grown tired of paying all that rent money to someone else? If so, then it might be your time to consider purchasing a home, and keeping that cash for yourself. However, you do need to ensure that you are prepared on more than one level before jumping into the equity market. There are many financial considerations to make note of before you start looking for a home. But, if you can arrange your finances into a sensible plan and secure a mortgage then this can ultimately be the most rewarding purchase you have ever made or will make.

 

Finance plays a huge role in the decision to purchase your first home. This is to be expected as if you are purchasing your first home you will not likely have a few hundred thousand dollars sitting around and will have to find a mortgage of some sort. You should really make sure that you are prepared for the application for a mortgage as it will involve a thorough investigation of your past credit history. If there are any issues that you know of with your credit then you should take care of them before you apply for the mortgage. Sometimes this is a simple case of oversight, some things have been taken care of and not recorded as such, and sometimes there can be some debts that you will need to see to. Once these are taken care of, be sure to get a letter of release that you can show to the mortgage broker or company if necessary. If there are no issues with your credit then that will only make the process easier.

 

There is no stronger tool in the home buying process than having all your financing in line before you start shopping. This is a great attraction for sellers as they want their homes to sell quickly and without incident or trouble in the money phase, a buyer with ready-to-go financing’s offers will hold greater favor with almost any seller. If you are mindful of these things then when the time comes to make your offer, the whole affair will go much more smoothly and you will be able to dedicate your time to what is important. How to decorate your new home.

 

 

Advertising Your Home

Have you ever wondered why that beautiful and well-kept house at the corner is still up for sale after almost six months? You’ve been there, asked around (no murders there), found the price reasonable, and yet … they have not received an offer to sell. You look around, and you notice nothing.

 

A house, no matter how beautiful or how ideal it is, will definitely not sell if it is not properly advertised. If you are selling your home through an Agent, the Agency will handle most (if not all) of the advertising and marketing needed to sell your home. If you are doing everything by yourself, you have to make sure that no stone is left unturned. This doesn’t mean that you have to spend an entire fortune on advertising alone; you just have to know which advertising methods will bring the maximum media mileage for your property at a cost that is agreeable to you.

 

The easiest and most economical way of advertising your house is to put up a “For Sale” sign in your yard and putting up posters in areas that generate a high volume of foot traffic (supermarkets, post office, etc). However, even if you put several posters in several key places, you will most likely, not reach the right market. Mind you, there is a chance that you will, but it will be very small.

 

Putting up an on-line ad is another fast, easy and fairly economical way of marketing your home. For a small amount, your home and some photos can be uploaded onto the World Wide Web for a specific amount of time for everyone to see. Unfortunately, since it is available on the net, you are most likely to attract a wide range of people. It may take time before you can sift through all the inquiries your ad has generated.

 

Placing an advertisement in a newspaper or a magazine that specifically dedicated to homes may be old fashioned, but it still is still one of the most effective ways of marketing your home. You have the option of putting a photo and you can lure buyers in by writing an interesting description about your home its features and amenities.

 

You are not limited to just one form of advertising method. You can use just one kind, or all three. It really depends on you and your budget. In addition to the marketing effort, you should also prepare a Fact Sheet about your home. The fact sheet should contain all the pertinent details about your home. Don’t just put the number of rooms and toilets in your abode; make sure that you include the year the home was built, and the year when the last renovation was made.

 

 

A Tip On How To Get Offers When Showing Your House

You are in the process of trying to sell your house and have your marketing up and running. So, how do you convert callers into offers? Here is one method.

A Tip On How To Get Offers When Showing Your House

Once you have decided to sell your home, there are a couple of steps you have to take. The first is to get the home ready to show by doing repairs, landscaping and so on. Once you are ready to go, you have to start marketing the home. Assuming you have done all of this, the house is in good shape and you are competitively priced, you should start getting calls from potential buyers. These calls then turn into appointments and buyers come to see your home.

At this point, you probably expect that I will start writing about how to negotiate or accept offers. Wrong. The next step in the process is often one of frustration. The frustration arises from wishy washy buyers. They come and see the home, but leave without making an offer. They may come back a couple of times, but they simply never get around to doing the deed as they say. Simply put, this is because you have failed to address the issue of motivation.

Buyers need to be motivated to take action. The more motivated they are, the faster they will move. For instance, consider the holiday shopping season. Nobody, and I mean nobody, is out browsing in the malls. Why? The buyers are highly motivated to buy because there is a deadline and they probably have more than a few people to shop for. Simply put, they are highly motivated to do the deed.

Returning to our scenario above, what motivation do the buyers have to make an offer? Do they feel any pressure to do so? Unless there is something particular to their personal situation, the answer is that they do not. You must provide the motivation. Here is how.

One of the complaints of sellers is that they feel like they are constantly showing their homes to potential buyers without getting an offer. They may show the property three, four or even ten times a week. If this is your situation, you are doing it wrong.

The way to motivate buyers to make an offer on your home is to show it only once a week or two weeks if the market is slow. Set aside an hour or so on a particular day and make all the potential buyers come at the same time. By putting buyers together, you create the motivation that simply does not come with individual showings. In such situations, buyers are much less likely to be wishy washy. If they like the property, they inherently worry about one of the other buyers making an offer. You now have motivation and a perceived time limit.

If you have are getting interest in your property, but no offers, give this a try. You might be shocked how much of a difference it makes.