How to Make Home Buying Easy on your Budget

Most people buy a home only once or twice in their lifetime, and it rarely makes sense to buy if you expect to move within two years. Most buyers live in their new homes an average of seven years or more. During a housing slump it may not seem like real estate values will ever go up, but it usually does. Homes appreciate about 4-5% per year as a fairly general rule. 

Financially, there’s a lot at stake when you buy or sell a home. Unfortunately, many of the factors involved are beyond your control. An inspector might discover a fault that you were unaware of, or interest rates could jump without warning. The first step is to hire a good real estate agent. Here’s how you can eliminate buyer’s remorse and purchase the home you love for a price you can afford:

* Bear the location in mind

What type of neighborhood would you like to live in? What school district would be suitable for your family? Where do you like to shop?

Do you own a vehicle, or would you have to take public transportation? Do you need a driveway? If you already have an area in mind, you can start by driving around and looking for “For Sale” signs.

* How much house can you afford?

Even if you’re short on funds, the home buying process will go smoothly if you get familiar with the real estate market and narrow down your choices to fit within your budget.

Speak to a lender to see how much you can get pre-approved for. You can use your pre-approval letter as leverage, especially if the seller receives another offer similar to yours.

* House size matters

You can start the process of finding a perfect home once you have a workable price range. List the things you want, like hardwood floors, skylights or a spacious living room, and the things you definitely need, like three bedrooms, a garden, a first-rate school district, etc. If you discover a house that comes close to having all your needs but doesn’t have all you want, give it another look.

During a housing slump, it’s possible to buy a large home at significantly less than its listing price. This is because so many people are desperate to sell. Remember to take into consideration the physically challenged family member who may need wheelchair access, or the heart patient who cannot climb too many stairs to get to her room.

* Find a way to finance your new home

There are a number of mortgage loans nowadays that suit many different people for different reasons. The three most common are fixed rate, where your payment is fixed for the life of the loan, adjustable rate, where the rate can go up or down after a few years, depending on the market, and interest only mortgages, where for a specified time you’re allowed to make payments that cover only the interest portion of your monthly mortgage payment.

8 Reasons Why Now is the Best Time to Buy a Home

Mike Ciucci is joining us today, with excellent advice on taking advantage of this once-in-a-quarter-century buying opportunity that we are experiencing right now.

8 Reasons To Buy a Home Now

If you’ve been straddling the fence about buying a home, you could be kicking yourself when this unique window of opportunity closes. Never in history have the cards beens stacked for the buyer as they are now.

Here are eight reasons that will convince you that NOW is the right time to stop renting and buy your own home.

1. The market is with you. A Buyer’s Market occurs when there are more sellers than buyers, which results in more choices and lower prices due to excess supply. Homes are bought in both Buyer’s and Seller’s markets, but for the purchaser, now is the time they will get the most bang for their buck.

2. Favorable interest rates. As of the week ending April 16, 2009, a 30-year fixed rate mortgage averaged about 4.82 percent. The same time last year, the same mortgage was 5.88 percent. Five-year-Hybrid Adjustable Rate Mortgages (ARMS), were 4.88 percent, down from 5.48 percent a year ago, and the lowest since 2005. Imagine knowing that for the next 30 years, you’ll pay under 5 percent for your mortgage.

3. Foreclosure opportunities abound. Currently foreclosure properties make up about one quarter of all house sales. In California, 55 percent of all closings are lender-owned properties. Banks that do not want to be in the real estate business are dictating the price of homes, and they are anxious to cover their investment and sell. You have to be careful of what you’re purchasing, but the deals are out there.

4. Tax credit for first time buyers. If a buyer has not owned a home in the past three years, and falls in the eligible income range, they can take a tax credit worth 10% of the home’s sale price, up to a maximum of $7,500. This applies to homes that have closed between April 9, 2008 and before July 1, 2009, and can be applied to either the 2008 or 2009 taxes.

The really nice part of this tax perk is that it is a true credit. If you owe $8,500 in taxes, the $7,500 refundable credit comes off the top, leaving an amount owing of only $1,000.

Not only is this a refundable tax credit, but it’s also a loan. This means that within two years buyers must begin paying it back at no more than $500 per year for 15 years. If the home is sold during that time, the amount is withdrawn from the profit. If there is no profit, the loan slate will be wiped clean.

5. The cost of rent is not going down, but house prices are. The cost of buying a house has gone down in most of the U.S., in some areas more dramatically than ever. This drop in price has not affected rent prices, which have remained fairly solid. According to a report from John Burns Real Estate Consulting in Irvine, California, which surveyed 50 percent of the 76 main area markets in the country, the average person can buy a house for less than they could rent one.

6. Solid investment. In this tenuous market of shaky hedge funds and bankrupt financial institutions, it’s good to have an investment that you can feel relatively safe with. Every dollar you pay against your principle goes back in your own pocket when you finally sell, and with some extra added profit to boot.

7. More House for Your Money. With the combined lower prices and record low interest rates, a new buyer can start out with far more house than they could have if they had entered the market four years ago.

8. Today’s Built in Safety Features. Some states, such as California are trying to make it easier for people to invest in a home. The California Association of Realtors have introduced the Housing Affordability Fund’s Mortgage Protection Program. For a house purchased in 2009, if a homeowner is unable to make their payments, the fund will cover up to $1,500/month for six months.

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Work with a qualified, dedicated agent for your Goose Creek real estate purchase. Find the ideal Charleston S.C. home at www.BuyingCharlestonRealEstate.com.

Excellent article, Mike.  This definitely is the smart time to buy.

If you’d like to speak with a Sacramento-area consultant about financing options for you new home, just drop us a line, and we’ll help you get started.

Buying your First Home? Read these ESSENTIAL Borrowing Tips…

Matthew Sanz has brought us this excellent article on getting financing for you first home. There’s a lot to know, and a lot of people that will try to take advantage of your lack of expertise. The best way to prepare is to be informed.

The Essentials of First Time Home Mortgage Loan Borrower

Property ownership and buying a home for the first time can be an exciting yet mind-boggling experience. Before you make a decision, it is important, therefore, that you know your options as well as the basics of home mortgage loans.

What is a mortgage?

A mortgage is a loan you pull out to pay off your home. If you are a first time home mortgage loan borrower, you may be asked to deposit a down payment and pay for the rest (i.e. monthly) through a mortgage loan. Establishments that can offer mortgages are mortgage specialists, building societies and banks.

What are the types of mortgage?

-The repayment mortgage - monthly payments are made within an agreed term until loan and interest are paid off.

-The interest-only mortgage - monthly payments are made for a period of time as agreed in the contract, except payments cover only the loan’s interest within the initial term. Afterwards, you are asked to make interest payments in full every month.

-The fixed-rate mortgage - requires you to pay for a fixed interest rate over the whole term. Interest rates do not change and therefore offers a feeling of certainty for most borrowers.

-The adjustable rate mortgage - has rates that adjust after an initial term containing a fixed rate. Rates could adjust depending on the rise and fall of other economic rates. This could sound daunting for first time home mortgage loan borrowers, but those who want a lower initial rate can benefit from this type of mortgage.

What are the requirements?

1. Good credit report:

From your credit report, lenders will be able to determine whether they can grant your application or to increase the interest rates for your loan. Lenders especially want to make sure that a first time home mortgage loan borrower has the ability and willingness to make his or her payments.

2. Insurance:

Insurance can be used to pay off your mortgage if you have just been in an accident, lost your job or become sick. You might be required to use life insurance to pay off your mortgage should death occur. What are some tips I can use before purchasing property?

- Improve your credit report - Avoid applying for more credit and pay on time. - Review and correct credit information - Contact the credit bureau to correct inaccuracies - Get the best program - Choose a plan that is most suitable for your situation. - Research - Jot down your price range and find out how much you can borrow. - Do it online - Using the Internet could save you more time and money. Lenders now offer mortgage calculators online that you can use to predict which mortgage program is most suitable for you. - Choose the best mortgage specialist - Determine if the specialist works in a company that is likely to stay in business whenever rates fluctuate. - Ask for advice - Look for recommendations so you are familiar with what kind of mortgage plan you are getting into.

These are only recommendations, though, and should not be used in legal matters.

Read more data as a first time home mortgage loan borrower. Discover an online home equity mortgage calculator now.

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Those are some excellent tips for first times, Matthew! Thanks for sharing them with us!

If you’re a reader who would like more information and a chance to talk to an industry expert at absolutely no cost, simply get in touch with us and we’ll get you started on the right track.

Will the Credit Crunch Affect Your Ability to Get a Home Mortgage?

Today we’re joined by Chris Clare, a market expert in the housing industry. One of the topics on everyone’s mind these days is how the state of the economy will affect their ability to get financing for their home. Let’s take a look at what Chris has to say about it.

The Credit Crunch What Does it Mean to You

by Chris Clare

The aim of this article is to define the credit crunch and explain how it may have an affect on you as a borrower. Although it is compiled with the UK market in mind, due to similarities between the different countries within the European and world markets, the effect it may have on the individuals within these markets will likewise be similar.

First of all lets discuss what is the credit crunch? The credit crunch that most people have heard about first started in the US. It was primarily bought about by two situations, the first of which was the way in which money was being lent and secondly how the money was derived by the lenders making the loans.

When lenders loan money it is invariably not out of their own pockets, in that it is not exactly their own money. This sort of money is known as securitised money. It is money that has been borrowed from somewhere else before being loaned on to the public. The source of this money comes from what is known in the business as money markets. Vast sums of money are borrowed from these money markets by the lenders, sometimes millions at a time. The money borrowed from the money markets by the lenders is called the tranch of money.

Once that tranch of money has been lent to borrowers, they then set about borrowing more but what has already been lent is known as a lending book. That lending book has a value to institutional investors. Institutional investors are people such as pension companies or large investors who want to own loans lent to others that are going to be repaid but don’t want to go through the hassle of actually lending it in the first place and dealing with the end user. Lending books depending on their quality can have quite a high value.

It is the quality of these lending books that plays such an important role as to why we have a credit crunch at all. Ideally, a lending company would obtain a tranch of money for lending at a set rate. They would then lend this money to their borrowers at a percentage higher than that, and would therefore be making a profit. However, there are two significant possibilities which can ruin this ideal situation. The first is if the secondary lender lends poor quality money to the public. That is to say that some or all of that money has not been paid back and so is not effectively there to lend. The other possibility is if the money being distributed by the primary lenders, the distributors of the tranches of money, runs out.

Both these scenarios have occurred in the United States. Erratic payment and non payment of loans obtained by the public have left the secondary lenders with a trail of bad debt on their lending books which have in turn led the institutional investors to leave the markets. This has a subsequent effect on the secondary lenders in that there are less institutional investors to borrow money from and the ones that remain will be far more scrupulous in scrutinizing the loan books before putting their money forward, and so continues the downward spiral. The secondary lenders need money to borrow and continue on but the investors are not willing to invest in what they can perceive from the loan books to be bad debt and therefore bad investment opportunities.

All this has had a corresponding effect in the UK and it is evident that many of its lending companies main source of business relies on securitised lending. Although this is not a reflection of the UK’s more stringent methods of lending, it does show the caution with which the international money markets are treating the whole process of borrowing and lending.

The situation in the US is causing untold damage to the money lending industry in the UK and there is no doubt that many corporations could be destroyed by it. This may seem a world away from Joe Public, but as lenders tighten their belts on lending requirements in order to keep a high quality lending book, we will continue to find it more difficult to borrow money.

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Advice on mortgages from qualified Independent Mortgage Advisors help information and free to use mortgage calculators please visit Mortgage Route

Thanks for that excellent insight, Chris! I know our readers garnered a ton of useful information to help them understand what’s happening in the financing market during these turbulent times.

If you’re a reader who would like to talk one-on-one with an industry expert about your personal financial goals and home ownership possibilities, just let us know and we’ll put you in touch with someone very knowledgeable on the subject. You can contact us by dropping us a line on this page.

Home Mortgage 101 - What You Need to Know to Get Started

Joining us today is Barry Stein, with some excellent advice on getting started with home mortgages. As always, I know you’ll find this article to be a great resource for getting your feet wet in the world of mortgages.

Home Loans

Buying a home remains the great American dream. Home ownership rates have been exploding in recent years, spurred on by the historically low interest rates in the home mortgage market. Home prices have been rising at far faster than inflation, especially in major urban areas such as San Francisco, San Diego and Chicago. This means that not only can that home you’ve always wanted put a roof over your head, but it can provide you with a great investment as well. For people new to the mortgage market, buying their first home starts with finding the best home loans.

All potential homeowners should take some time to research home loans before calling their local realtor. There are a dazzling array of choices available when it comes to home loans, and finding the right mortgage for your needs can be difficult. Approach your upcoming home purchase with the same seriousness you apply to other major purchases. Your home will most likely be the biggest single investment you ever make. Take the time at the beginning to educate yourself about home loans. It will be time well spent.

Home loans are available from a wide variety of sources. These sources include banks, savings and loan associations, credit unions and mortgage brokers. Shop around at all of these sources to find the home loans with the lowest interest rate and lowest costs.

You will also have to decide between fixed rate home loans and variable rate home loans. Variable rate home loans are often advertised with extremely low “teaser rates”. These rates are used by lenders to get your attention and lure you in.

Before signing up for a variable rate mortgage, make sure you find out what the interest rate cap is. Variable rate home loans are usually based on an underlying interest rate, like the prime rate. The interest rate you pay will typically be the prime rate plus or minus a certain percentage. The variable rate mortgage will have a cap above which the interest rate cannot rise. Find out what that cap is, then use a mortgage payment calculator to see what your monthly mortgage payment will be at that rate. If you cannot afford the monthly payments at the maximum interest rate, you may not want to take the mortgage loan. While it is unlikely that interest rates will rise sufficiently to make the maximum interest rate kick in, it is always a possibility.

Variable rate home loans can be a good choice if you believe interest rates are likely to fall. In an environment where interest rates are steady or rising, they may not be so good a choice. You may also want to consider a variable rate mortgage if you do not plan to stay in your home more than five years. For instance, if your job transfers you every couple of years, you could probably get away with a variable rate mortgage and take advantage of the lower interest rate. When you move and sell your home, you will probably realize a gain due to rising home prices.

On the other hand, fixed rate home loans have a set interest rate for a set period of time, generally either 15 or 30 years. The interest rate does not change, therefore you will always know what your monthly mortgage payment will be. You are protected from rising interest rates with a fixed rate mortgage. If rates fall significantly, you can always refinance your mortgage loan to take advantage of the lower rates.

If you can afford the payments, 15-year home loans can substantially lower the amount of money you will ultimately pay for your home. When you run the numbers on a 15-year versus a 30-year home mortgage loan, you may be surprised at how affordable the 15-year home loan can be. Your mortgage payment will not double if you go with a 15-year mortgage versus a 30-year. This has to do with the affect of compound interest. You are paying far less interest in the long run on a 15-year mortgage.

Whatever type of home loan you decide on, the most important thing is to take that step which transforms you from a mere renter to a home owner and builder of equity. There are a great many home loans out there, but once you find the right one, you will find the rewards of home ownership well worth the time and effort put forth.

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Barry Stein is the owner of aWebBiz.com where he offers cutting-edge tips on all aspects of business and a Free Newsletter on Internet Marketing. To find more advice, tools and resources to help you succeed in your business, visit: http://www.aWebBiz.com

Incredible article, Barry! We’re excited to bring these tips to our readers!

If you’re reading this and would like to know more about how this advice applied directly to where you are right now, get in touch with us today, and we’d be happy to talk with you for absolutely no cost.

Buying a New Home? Use These Essential Tips to Do It Right!

If you’re looking to buy a new home, we’ve got a great article for you. Robin Smith has a great article for those new to the mortgage world. Without further adieu…

Getting a Home Mortgage Loan To Buy Your New Home

Most people find it difficult to buy their home as they are not in a financial condition to afford it. If you are looking for a new home and if you dont have enough money to make your purchase then you can apply for a home mortgage loan with which you could buy your dream home.

Home mortgages are a typical kind of home loan in which you are required to keep your home as collateral against your home mortgage loan amount. All home mortgage loans are secured kind of loan and they require security against the loan amount. Other than putting your home on mortgage, some financial lenders may also require you to provide some down payment in order to get approval for your home mortgage loan. The amount of your home mortgage loan finance is also determined by the current equity value of your home and also the amount that you provide as down payment.

Moreover, your credit history plays a vital role in determining the interest rate and the terms and conditions of your home mortgage loan. However, because of your collateral and your down payment, you will receive a larger home loan amount with a favorable interest rate.

Home mortgages may be again divided into fixed rate home mortgage loans and adjustable rate home mortgage loans. If you take a fixed rate home mortgage loan then you will have to make a fixed monthly installment until the end of your repayment. A large number of homeowners prefer this kind of mortgage loan as they get the knowledge of the amount that they are required to pay throughout the entire loan period. Moreover, it relieves them from surprises like a sudden rise in monthly installment. On the other hand, an adjustable rate home mortgage loan allows the borrower to adjust their monthly repayment according to their repaying ability. The interest rate of an adjustable rate mortgage loan keep on changing with the market trends.

Normally, an adjustable rate mortgage loan allows you to start your repayment with easy monthly installment as you can adjust the interest rate according to your convenience. However, the principal mortgage loan amount and the interest rate usually become much bigger with the completion of the loan period. This is the main reason for the rapid increase of foreclosures over the past few years.

Another type of home mortgages that you can apply is the bad credit home mortgage loans. Even if you have a poor credit record, you can still get a bad credit home mortgage loan if you own the clear title of your present home. Like other home mortgage loans, you are required to put your home as security against your bad credit home mortgage loan amount. Your bad credit mortgage loan amount depends up on the market value of your home and your repaying capacity. Before applying any of the home mortgage loans, you should fist figure out the type of home mortgage loan that will suit for financial condition. Moreover, you should consider various factors like the amount of your down payment and the means of financing the closing payments of your mortgage loan amount. You should also feel comfortable with the monthly repayment that you are going to make in order to avoid defaults on your home mortgage loan.

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The above article has been written by Robin Smith, a professional having keen knowledge of home mortgage loans. Find out more on types of financing and mortgages as listed in real estate directory.

Thanks for your contribution, Robin! We loved your article!

To learn more about how these tips and others can apply to your personal home search, just drop us a line today.