Our Real Estate Blog
As a homebuyer, you want to prepare as much as possible when you start looking at houses. By doing so, you'll be able to fully evaluate a residence based on your personal wants and needs and ensure you can find your dream house quickly and easily. However, there are many under-the-radar factors that homebuyers must consider when they check out a house, including: 1. Homeowners Association If you're evaluating condos, you should learn about the homeowners association (HOA) that manages the property. This will allow you to review HOA fees, how the HOA operates and other factors that may influence your decision to buy a home. Typically, it is simple to discover all you need to know about an HOA. To do so, you can work with a real estate agent who should be able to provide information about an HOA. Also, you can always contact an HOA directly and receive all the information you need without delay. 2. TV, Cable and Internet Service Providers Do you work from home and require a high-speed internet connection to complete your day-to-day tasks? Or, do you want to ensure you can get your favorite TV channels at all times? Regardless of your individual needs, you'll want to check out the TV, cable and internet service providers available in cities and towns where you'd like to live. This will enable you to find out if these local providers can meet your needs consistently. In addition, you should consider cell phone connectivity in an area, as this will allow you to determine if your cell service provider ensures you can enjoy clear calls in a particular city or town. 3. Attractions and Landmarks Do you enjoy spending a day at the park, checking out historic landmarks or going to concerts? No matter which activities you enjoy, it is essential to learn about the entertainment options near a home you may purchase. For instance, if a concert venue is close to a residence, it may affect nearby traffic patterns as concert-goers travel to and from this destination. Conversely, if you want a house that allows you to separate from the everyday hustle and bustle of the city, you may want to evaluate residences that are located many miles away from popular attractions and landmarks. 4. Walking Paths If you like to stay active, you'll surely want to find a house that features a wide range of safe walking paths that you can use every day. Whether it's going for a morning jog or simply enjoying a jaunt with your dog, you may be able to improve your chances of remaining active and healthy if you purchase a home with multiple walking paths nearby. Of course, a real estate agent can help you explore a vast array of homes in cities and towns nationwide. This professional will learn about your home preferences and allow you to streamline your search for the perfect house as well. Consider the aforementioned factors as you prepare to search for houses, and ultimately, you'll be better equipped to make a more informed home purchase.
Owning a house gives you a sense of fulfillment, and helps boost your self-esteem. It is a long term investment and should not be taken lightly. The present state of your finances is possibly the single most important factor when contemplating home ownership. Before you start shopping for a house, take into consideration the following factors. Have you set aside enough money for the down payment? The amount you need varies based on the price of the home and percentage required by your lender. Zero down mortgages are possible, however the interest rate is typically very high increasing the amount paid out over the life of the loan. Private Mortgage Insurance (PMI) is typically required for this type of loan, again increasing your monthly payment. How high of a mortgage payment can you afford to make ? If you opt for a fixed rate, your payment would remain consistent throughout the period of the loan. This type of loan is favorable for future financial planning. Adjustable rate mortgages make it a bit trickier to predict your monthly payments based on the fluctuating interest rate throughout the duration of the loan. This type of loan could be risky if interest rates rise and your payments increase significantly higher than anticipated. The security of your financial future is paramount when acquiring a mortgage loan. You would not want to enter into this long term investment without stable employment and a definite career path. Most banks and lending companies require a borrower to have been with the same employer for at least 2 years before considering a loan of this nature. Secure financial footing is key when applying for a mortgage loan. When determining your readiness to purchase a home, your credit score is as important as your finances. If you have a low credit score, you’ll attract a higher lending rate. This implies an increase in the amount paid back to the lender over the duration of the loan. An excellent credit score of 720 or above attracts the best interest rates and repayment terms. If your credit score is too low, improve it by:
- Becoming Debt Free
- Removing all inaccuracies from your credit report
- Making all monthly payments in a timely manner -- eliminating late payments
- Avoid applying for new loans and opening credit accounts
It’s time to buy a home! That is right you heard it here, no more doom and gloom for the real estate market. The time has come to go out and buy some real estate. The only thing holding buyers back has been consumer emotion but a look at the facts should help buyer feel more confident in opening up their wallets for a great opportunity in today's housing market. JP Morgan’s Market Insights report has outlined why people looking to buy a home have never been in a better position. Here are just three important points from the JP Morgan report. The Price is Right One measure the report looked at was the ratio of personal income to home prices. “Since 1966, the median price of an existing single family home in the U.S. has varied between 150% and 251% of personal income per household. However, roughly three-quarters of the time it has been in a relatively narrow band between 185% and 230%. In September 2011, the ratio was just 153%, implying that to get back to an average price to income ratio, home prices would have to rise by about 27%.” Mortgage Rates are Right Mortgage interest rates are at historic lows as compared to personal income. The report notes, “During the week of October 7, Freddie Mac reported that mortgage rates had fallen to an average annual level of 3.94%. Assuming the use of a fixed rate mortgage with 20% down, this would make the median mortgage payment on a single family existing home just 6.9% of per household personal income, compared with an average of 14.4% since 1966.” What this means is that it is a buyers perfect storm. Buyers who buy now will likely reap a long term financial gain by buying a home at a lower than average cost and financing it for a lower than average cost. It is a win-win situation. Home Ownership Beats Renting The report goes on to look at the cost of renting versus owning. JP Morgan predicts that by the "third quarter of this year, we estimate that the implied median mortgage payment had fallen to just 78% of the median asking rent. In other words, at current mortgage rates, home prices would have to rise by 35% just to get back to their average relationship to rents." Home buying is now more affordable than it has been in decades. Home prices are at all time lows, mortgage rates are at rock bottom and income levels remain steady. Despite what you may hear on the nightly news home ownership has never been more affordable.
When you think of a hot real estate market you usually think about the spring market but the fall is also a busy time for real estate. There are many benefits to buying a home in the fall. Buying a home towards the end of the year is a great way to get a tax break. Home buyers can deduct both mortgage interest and property taxes from gross income on their taxes. Buyers may also be able to deduct prepaid interest and closing costs. The weather in the fall can also be an ideal time to move. It can be difficult to move in the heat of the summer or in freezing temperatures or icy winter weather. Median homes prices typically peak each June or July. This is because families with children buy larger homes and want to get settled before the start of school. Prices slightly decline each September with purchases dominated by first-time buyers who usually buy smaller homes. The fall typically has a nice selection of inventory. Many sellers list their home for sale hoping to close the deal before the holidays. Some sellers may even be motivated to sell before the year end so they may be more flexible in their negotiations. Just because the inventory may be good the fall is still a competitive market. If you find a home you like don't be lulled into thinking other buyers won't like it too. Make an intelligent and carefully planned offer before another buyer comes along and betters your offer snatching the house out from under you.
If you have been dreaming of owning a vacation home now may be the time to buy. Home prices and mortgage rates continue to fall and there are some great deals for buyers looking for a second home. Here are five things you need to know before taking the leap. 1. Prices are at all-time lows In many second-home hot spots, prices are still close to their five-year lows. When the real-estate bubble burst, some of the hardest-hit markets were vacation destinations. Many vacation home areas experienced overgrowth and may now be suffering from foreclosures. 2. Think ROI Consider the possible return on your investment. Whether or not you decide to rent the home out, you will want to consider buying a place that has good rent potential. That's because a home's rent ability can affect its resale value. Before you bid on a house, make sure the homeowners association or township allows short-term rentals. 3. Don't count on rental income If you are planning on counting on rental income to cover the costs beware. According to HomeAway.com, a typical second home property rents out just 17 weeks a year. Make sure to account for the weeks the home won't rent. Plus, you'll need to pay for cleaning, maintenance, insurance, and maybe management fees. Make sure to plan on the maintenance costs of the property being at least 15% of the income. 4. Your mortgage rate depends on how you use the home How you use the home depends on the mortgage rate you will receive. If you plan to use the property primarily as a second home and you'll pay about the same mortgage rate as you would on a primary residence. If your plans are to use the home for rental income and need that income to qualify for the loan, you'll need to have as much as 25% for the down payment and pay up to one percentage point more in interest. 5. Take advantage of tax benefits Talk to your tax guy before you buy. If you rent the home out for two weeks or less you won't have to report a cent of income to the IRS. The good news here, you can still deduct property taxes and mortgage interest. On the flipside, if you stay there for less than two weeks or 10% of rental days, you can deduct operating costs in addition to interest and property tax. But where should you buy? According to CNBC here are the top places to buy a second home. If you are thinking about buying a second home I can help you find a professional agent in that area.