Homefinding Book

When looking for a new home, people have different requirements in mind. Some look for cozy and comfortable setting, while others want a swimming pool and spacious bedrooms. Other factors also come into play like price and neighborhood. An author once wrote that people usually look for four characteristics of a house when buying it: cost, condition, convenience and capacity. These attributes can also be called the 4 C’s. So, all the requirements can be broadly divided into 4 categories: price of your new home, the condition it is in, such as brand new, renovated, remodeled, and so on, how suitable and well-located the home is, and how spacious and properly furnished it is.

Price plays an important role in determining whether a particular house is suitable for you or not. When setting your budget, don’t forget to add the overhead charges including taxes and many other settlement fees that you have to pay in addition to the cost of the house. Maintenance costs and insurance should also be considered at least for the next 5 to 10 years. You can make use of some online calculator to determine the true cost of a home. The total cost would include mortgage payment, annual maintenance, property tax, annual utility costs, and annual insurance.   

Then comes the condition of the house you are about to buy. Even if you are buying a brand new home, some parts may still need your attention if they have not been constructed according to your requirements. Similarly, limited space does not allow having more than one or two bathrooms. If you have a big family this would mean that you have to check out more houses. Even if you have to make changes, make sure you do not require a complete makeover, otherwise the maintenance costs will go skyward. Up to $20,000 to $30,000 worth of repair work is normal when you move in a new home.   

Capacity and location are two factors that may have a great impact on your decision of buying a particular home. If you entertain guests on a regular basis you might be in need of a spacious home with many bedrooms. Make sure to discuss this aspect of the new house with your family to find out what they want. Many people sell their old houses because they want to upgrade to a large or luxurious setting. Some people also look for lavishly furnished kitchens with many cabinets and a sub-zero refrigerator.

The location or neighborhood of you new home may influence your decision. You might be looking for a quiet environment or a neighborhood which is close to the shopping mall. Some people want a home which is close to the place where they work. Keep these points in mind when looking for a new home.     

Some other factors should also be considered to find a dream home which is right according to your requirements and criteria. Market value of a property keeps on changing and if you want to find an affordable home you may want to deeply study the market trends. In addition to this, current interest rates should also be found out in order to make sure that you are financially capable of buying a new home. Although these decisions are part of the cost factor, but people usually overlook them. Advice of your mortgage agent also plays an important role in coming to a final decision. If you know how long you will be staying in your new home, this may also be a deciding factor in buying a home. People normally settle on old and poorly furnished houses if they don’t intend to stay in them for a long period of time.  

Whether you are applying for fixed-rate mortgage or variable-rate mortgage, you have the option of attaching an additional feature to it: interest-only loan. Some people think it’s a type of mortgage but it’s not. Interest-only mortgage allows you to pay only the interest in any given month if you don’t have enough money to pay off some amount of the principal. However, this is allowed only for a specified period of time after which you have to pay the interest as well as the monthly installment. Like any other financing option, interest-only mortgages have their advantages and disadvantages. Before deciding to apply for this type of loan for buying a new home, consider all its features and only proceed if you think it’s the best available option for you.

If you are expecting to earn a lot in the coming years and if you plan on selling your home after a few years, then interest-only loan might prove to be a beneficial option. In addition to this, the amount you save by paying off only the interest can be invested somewhere else which you think will bring huge profits. That profit can then be used to pay off the principal after your initial period has expired. If you are able to get a low interest rate on a fixed-rate mortgage, this option will allow you to avoid the rising interest rates and pay only the interest portion every month. Even in a fixed-rate plan, if you pay some amount of your principle each month along with the interest, the next month’s interest will be reduced.

First time homebuyers often end up selling their home after a few years. If you have planned ahead for the next five to seven years, you may want to consider this option. However, if you are not sure how you are going to pay back the loan or when exactly will you be able to pay off the entire principal, then consider some other financing options instead of interest-only mortgage. This is because you will need to refinance after an initial period of five or seven years and this might not come easy. Furthermore, the facility to pay only the interest and not the principal will not be available and the amount you owe each month might not be easy on your pocket.           

Some people think that availing this option eventually allows them to be debt-free by paying less. This is a false impression probably advertised by those who want to sell their plans. An interest-only loan is an advantage which anyone can benefit from who has future plans to invest in a seemingly profitable business and needs capital for that. Furthermore, you may not get a low interest rate if you are availing this option. The first thing to do is to decide whether you need fixed-rate or variable-rate mortgage. For adjustable-rate plan, the interest-only option can be even more confusing for the borrowers. You can check out your amortization timeline by using the interest-only mortgage calculator.          

The experts say that only business-owners can benefit from interest-only mortgages because they don’t have a regular salary. Sometimes they get lucky and their profits are huge. They can easily pay off the principal along with the interest. But for an average working person whose only income is the monthly salary he receives from his company, interest-only mortgage can prove to be devastating. Then there are market risks involved in this type of a plan, considering you decide to sell your home in order to pay the debt. Still, after consulting with your mortgage agent, if you think this option is going to be beneficial in the long run, go for it.    

Before you qualify for a decent mortgage loan, some requirements have to be fulfilled. There are many types of loans and to know which type of mortgage you will be offered largely depends on your credit score. Not obtaining a credit report before applying for the loan is a mistake many first-time homebuyers make. Let’s discuss the different types of mortgages before proceeding with the credit score. There are basically four types of loans: fixed-rate, adjustable rate, balloon loan, and government loans. Fixed-rate mortgage can be obtained for 15, 20 or 30 years. If your credit score is good, you can get a lower interest rate and it will stay the same over the years for this type of mortgage. The 30-year fixed-rate mortgage is often the easiest to obtain.    

If you plan to sell your home in the near future, variable or adjustable rate mortgage will be best suited to your requirements. This is because the first interest rate that you pay is usually lower than the subsequent installments. Balloon loan refers to the type of mortgage in which you have to pay small installments for a period of five to ten years and after that the remaining amount has to be paid at once.

Many parts of your credit report are scrutinized by the lender in order to see whether you quality for the loan or not. One of these aspects is your debt-to-income ratio. The lender will need to know how efficiently you have paid back your past loans. If your debt-to-income ratio is bad, you should first consider paying off at least some amount of the debt before proceeding with your decision of buying a new home.        

Your credit score also reveals the total amount of money you owe as debt. If it is a huge amount, you might not qualify to get loan for your new home. However, there are ways to improve your credit rating either by paying off the debt or attempting to correct the mistakes that might make your credit score look bad.

Many people ask the question what should be the credit score to qualify for a mortgage loan. Normally, a credit score of 750 or above is considered excellent. Even if your score falls in the range of 600 to 650, you have pretty high chances of securing the loan. But if it is lower than this, you may want to reconsider your decision of buying a new home.

Always try to keep your credit history clean by regularly inspecting your credit report for correctness. Opening new credit car accounts when you are not going to use them can also have a negative effect on your credit rating. If you cannot afford something, don’t plan on buying it through credit. Always pay your bills on time instead of piling them up. Your credit score is also affected by the degree of delinquency on your report. Even after you have paid off the bills, delinquencies will stay on your credit report for an indefinite period of time. So, it’s a good practice to shell out all due payments on time.

For those who have a low credit score, there are several options available in the government loans category, one of which can be availed to buy a new home. In fact if you are a first-time homebuyer, the government FHA loan might prove to be the best available option for you. There are many advantages of this type of loan. Although the interest rate in a FHA loan is dependent on your credit history, it’s still not very difficult to secure this type of loan for home buying.

Get your credit report today and see which option best suits you.            

For the first time homebuyers, settlement or closing on the new home can be daunting. You are not only required to sign a lot of documents but also have to ensure that everything stated in those documents is correct and not ambiguous or misleading. A whole new vocabulary has to be mastered to understand the technical lingo of real estate. Before going to settlement, it is advisable to acquire as much knowledge as possible about the settlement costs so that you are well-prepared to cover those costs. Settlement costs can be up to 6% of the price of your new home. This can be very high so the first thing to so is to negotiate properly with your settlement agent and the seller.   

Getting your credit report is an important step involved in going to settlement on your new home. Mortgage pre-approval is guaranteed if you have a high credit score. Furthermore, the interest rate will be low. Nowadays it is possible to obtain a free credit report and credit score online. In addition to this, financial assistance is also given in order to help you improve your credit score before you apply for a loan. Earnest payment or a good-faith deposit has to be paid when you make the offer to buy a home. This money has to be returned to you if you decide not to proceed with the transaction, so make sure your money goes to safe hands. After the seller accepts your offer, you can proceed with getting an appraisal.    

The settlement costs are also dependent on your credit score. So, it will be better if you rely on the estimate provided by your lender instead of doing calculations on your own. The terms found in the contract include appraisal fee, credit report, earnest money, loan origination fee, and property survey fee among many other costs. A certified appraisal is required by your lender to get an estimate of the home you are about to buy. The appraisal fee is different in different circumstances but can be up to $300 or more. Location is the most important factor in determining the market value of a property. Familiarize yourself with different types of value, such as investment value, liquidation value and insurance value before proceeding with the settlement.

Origination fee is charged by the lender to handle your loan application. This fee is usually 1% of the total loan amount. However, it is also dependent on the loan points. Your aim is to locate a deal with the lowest interest rate and the least number of loan points, as each point increases your origination fee by 1%. In addition to these costs, you are also required to buy a Homebuyer’s Report and a Full Structural Survey before buying a home. Full Structural Survey is more expensive than the other report and covers many aspects of the overall condition of the home you are about to buy. Choose a reliable and reputable company to survey your home. The cost of a survey depends on many factors including shape and size of property, accessibility, time of year, and some others.     

So, you see many documents have to be studied and signed, reports have to be ordered, and fees have to be paid before you can finally step into your new home. Follow the steps carefully in order to avoid paying more than you had to. You need to familiarize yourself with the terms and conditions and only proceed after thorough investigation. Make sure you are maintaining a file with all the documents including sales contract, tax payment receipts, booklets from the lender and the manufacturers of equipment in the house, and all other copies of signed forms.  

Nowadays we have tons of options to market our products, online or offline. Writing effective advertisements for selling your home is important to attract serious buyers. If you write meaningful ads with adequate description of your property along with its strengths and shortcomings, chances of getting a handsome offer are very high. In the world of real estate, some words are more appealing than others. You may already be familiar with those words but the catch here is to use those words effectively and evocatively. The introduction part is always the most difficult one but once you get through it, the rest of the process is simple and straight forward.   

When looking for new homes, people usually search for terms like cozy, beautiful, furnished, comfortable, freshly painted, spacious, and so on. When you write ads, keep all these terms in mind and always try to avoid downbeat or negative words. Also, try to make your ad helpful and complete. People do not normally read large blocks of text, so make it concise but comprehensive. Make sure you don’t use ambiguous words and words that suggest what kind of a buyer you are looking for. Just focus on making your ad attractive rather than thinking about who will be compelled to send you an offer after reading your ad.

Make a list of beautiful and positive features of your property first and only come to its shortcomings later on. Short descriptions are usually the most effective of all. An example: Fascinating and cozy abode with your own private spa. Most people are also concerned about the surroundings and community where their new home is located. So, describe your neighborhood in the most helpful language. You could write ‘Very close to the mall’, or ‘A quiet environment with tree lined streets’. Also mention if there are any restrictions in your area. For example, there are different regulations or zoning ordinances regarding the use of private land for commercial purposes.

Gender and race discrimination should not be reflected by your ads. Similarly, do not consider the physical condition of your buyer while writing ads. Whether they are physically fit or handicapped, it’s totally up to them to decide if they want to move in your neighborhood. It is also advisable not to mention places of worship or a phrase that might have undertones of religious inequity. Avoid words such as conservative, liberal or elite neighborhood, and phrases like ideal for families only. If you don’t keep these guidelines in mind you might end up violating civil rights of people regarding fair housing.       

You should let your buyers know if you have recently done some renovations or remodeling. Many people look for modern homes with state-of-the-art features. If you have some special facilities, don’t forget to mention them in your ad. This could include swimming pool, spacious garage, long driveway, beautifully maintained backyard, huge layout, and so on. Do not mention anything if you are not sure of it. Do not deliberately write a lower price to attract customers. Conduct enough research on the market value of your property and only after that mention the price.

Some homes are not in a condition to be sold. If your home needs remodeling, repair or furnishing, renew it before you advertise it. Interior decoration plays an important role in making your home look spacious or warmer. Doing this type of decoration is known as home staging. Mention in your ads if you are selling a defective house. Serious buyers will definitely consider your ad if you are honest, truthful and straight forward. Once you are done writing an effective home selling ad, have it published in online listings and local classifieds.                

Real estate investing has made and broken many millionaires over the past two decades. There are few methods of investing that can match real estate for growth potential and income earning possibilities. You have plenty of options to explore when it comes to real estate investing, which makes it appealing to a wide range of investors.

Research

The first step in a successful real estate investment is research. You need to begin by researching the different types of real estate investment types so that you can decide if you are interested in rental properties, flipping properties, commercial real estate, or countless other types of real estate investments. Get a head start on your research by checking out this free special report on creating wealth by Robert G. Allen.

Once you’ve decided on your investment type it is time to move on to researching property listings. No matter what type of investment real estate you are interested in there are likely to be plenty of opportunities available in your community or the community in which you are buying. The key is in finding the right property at the right price to bring you the greatest possible profit potential.

Take the time to learn about specific properties, pros and cons of that property, growth in and around the property, rental history of the property -if you plan to rent, and property values of other comparable properties in the area. This information is what will help you make the right decision about whether a property is a wise investment, but remember there is always risk involved in real estate investing no matter how much research you do.

Create a Plan

Real estate investing is a business and all businesses need a plan in order to become successful. Take a little time to create a business plan before you get started. Some things you will want to include in your business plan for your real estate investments are your long and short-term goals. Are you planning on only buying one property or one type of property? Are you looking for a little cushion for retirement or do you want to make a livable income from your real estate investment? How do you plan to reach those goals?

Remember Rome wasn’t built in a day. It took years of consistent and concentrated effort to create an empire and to manage that empire. You need to have a plan not only for obtaining the real estate you are investing in but also for managing it once it is yours. Are you going to pay property managers to handle the day to day or are you going to be a “hands on” real estate investor?

Having a plan is more than simply having a road map for success. It is part of the process of creating a mind set for success. Whether your goal is a Fortune 500 worthy real estate investing enterprise or to create a little cushioning for your nest egg you are more likely to realize your goal when you have a well throughout out plan of action for doing so.

Take Action

All the planning in the world will not amount to anything if you never venture out and do the things you’ve been planning. Once you’ve done the research and created a plan the next step is to take action. You need to either arrange the financing, find a partner, or gather your own resources to invest and make your very first real estate investment.

One thing you need to keep in mind during various ups and downs of real estate investing is that the “how” of real estate investing is rarely as important as the “why”. If you focus on why you are doing it, you will find that an excellent foundation for success has been made. Don’t forget to visit Robert Allen’s website for a special report to help you learn the secrets of being prosperous.

With the cost of gas, diesel, and additives constantly rising, I have been searching for real alternatives to save money at the pump. Most of my research comes up with rebate deals (too much work), coupons requiring credit card numbers, Internet or phone activation (again - too much work), and coupons that require you to complete surveys. Most of these are marketing programs that have no merit as you are working too hard for a small, one-time, discount, with many restrictions.

The only program that I found to be legitimate, easy, and productive is the GasMaster pre-paid Visa cards, only available through the GasMaster distributors. This program is big in Florida, and uses a concept that Costco, BJ’s, and Sam’s discount clubs are famous for. You join the discount club for $159, and then you are entitled to buy up to $300 per month of gasoline debit cards.

The Gas Master Discount Club offers 20% Off gasoline through prepaid VISA gas cards.  Savings are up front. In other words, you pay $80 for a $100 card  but  will have the full $100 to use at any gas station and  convenience store attached to a gas station. Pay $240 for a $300 card, etc.

The prepaid gas cards can be used at any gas station nationwide that accepts the Visa logo. The discount club also offers savings on hundreds of other products and services at their online mall.

Remember, this is only available through authorized distributors, and everyone wants to save. There is still room for distributors if you want to supplement your RE income. It’s great to do part time.

Visit www.RealtorsGasClub.com which will take you my page on the GasMaster site to learn about buying gas at 20% off.

This program is big in Florida, and needs promotion throughout the US; currently it is in operation and growing. Credit cards (like Discover) offer you 5% on a credit purchase, BJ’s and MasterCard programs offer about 2% on general purchases, but GasMaster offers a true 20% discount on pre-paid cards.

Non-Realtors can join as well, making the savings available to anyone who drives for a living. Feel free to share with family and friends.

The one thing that everyone wants when applying for a mortgage is an excellent mortgage interest rate. The interest rate you pay will determine how much money you end up repaying the bank when all is said and done. The lower this number, the less money you will owe over time. The less money you owe over time the less money you will need to pay each month in order to cover the costs of owning your home.

It pays to know the steps you can take to get a great mortgage rate on the purchase of your home. So, what can you do in order to be sure that you are getting the lowest rate possible?

Fix Credit Snags

The most important thing you can bring to the table with you when applying for a mortgage is good credit. The better your credit rating is the more likely you will get a decent rate on your mortgage. If you have a few credit hiccups you may want to apply and see what is said. Worst case scenario you don’t get favorable terms and try again down the road

If your credit rating is dismal you should make efforts to improve your credit score before applying for a mortgage. A good faith effort on your part can go a long way to ensuring that you get a much lower interest rate though it may take some time to earn the prime interest rate that you are hoping for.

Depending on how bad your credit issues may have been it may take quite a while to get things under control and restore your good name - at least when it comes to credit. This is a marathon. You didn’t find yourself in a poor credit state overnight in most cases and it will take a concerted effort on your part to make the necessary improvements.

Shop Around

Believe it or not, there isn’t a one size fits all lending program that promises the same interest rates from one lender to the next. You can actually get better interest rates by checking out the competition locally and nationally before making your final decision. To get the best possible rates for your mortgage shopping around is probably the best thing you can do other than maintaining an impeccable credit rating. A great place to shop for mortgages is Lending Tree.

When you take it on the road, so to speak, and see what the competition has to offer when it comes to interest rates, it does two things. First, it lets you know that you have other options available to you. Second, it lets lenders know that they are facing some competition. This often encourages them to give you the best rate they can possibly offer or add incentives that may be attractive and beneficial in the long run.

Have an Impressive Credit Record

There really is nothing that can bring those interest rates down on your mortgage like credit that is above reproach. If you want the best possible mortgage rate then you will want to make sure that you are bringing an impressive record for prompt payment to the table with you.

Getting a great mortgage rate is only half the battle when it comes to getting a mortgage but for many home buyers, it is the most important aspect of the home buying process. Make sure that you are prepared to wait it out and find the best mortgage rates before signing on the dotted line with any lender. Patience is definitely a virtue well rewarded when it comes to getting the mortgage you deserve. To get the great rates your good credit deserves be sure to check your options at Lending Tree.

Since most people only buy a house one time in their lives it is understandable that the average person doesn’t have a lot of experience obtaining home financing. You will find commercials and advertisements all over the place encouraging you to get your home financing with this or that mortgage company. So how do you know, which one will have your best interest at heart and give you the financing you need to get you in the home of your dreams today.

Know Where Their Loyalties Lie

The first thing you need to know about mortgage brokers, lenders, and finance companies is that their loyalties are to themselves. They are not interested in your personal situation, the future of your family, or any of the dreams you have for the members of your family. They are interested in getting a commission check. Don’t for one second make the mistake of thinking that they are in business to help you.

Once you have that firmly in mind you can move on to more important information about getting the home financing you need. The bottom line is that these people are in business to make money not to give it away. This is especially true in light of recent upheavals in the mortgage lending industry. New requirements are stricter than in years past but it is still possible to get a home mortgage with a reasonable credit record.

You Better Shop Around

Interest rates are king when it comes to getting a mortgage. Even fractions of percentage points can add up when you are talking about hundreds of thousands of dollars in home loans over the course of 30 plus years. You want the lowest interest rate possible and may need to shop around to get the interest rate that will serve you best. Check out Lending Tree for some of the best rates in the business.

Don’t fall for enticing incentive offers like free vacations or even free flat screen televisions. The price you will end up paying for them when all is said and done will be much greater than their worth if you aren’t getting the lowest interest rate available along with these exciting incentives.

Know the Lingo

It is vital that you understand the basic lingo of loan speak in order to insure that you are not getting a sour deal with your mortgage. You will hear all kinds of new words when you discuss your borrowing options.

You need to know that an ARM loan stands for an adjustable rate mortgage that can end up costing you much more money than you would have ever anticipated. You should also know that an adjustable rate mortgage is almost never beneficial to home owners.

What you need instead is a fixed rate mortgage. A fixed rate mortgage will not change when the interest rate does.

Private mortgage insurance, also referred to as PMI is an insurance that you must purchase unless you make a rather sizable down payment. This protects the lending institutions that extended you credit from the full force of their potential loss and will need to be included in your budget.

Getting the financing you need to buy a new home doesn’t need to be rocket science. Lenders like Lending Tree are names that you can trust in the world of frightening finances. But also taking the time to learn a few basic things about the process though can save you time and money while relieving some of your concerns. Keep these things in mind when checking out options for lenders and find the lender that you feel is going to go to bat for you more than any others.

You will come across many things when buying your first home that will have you scratching your head. Finding the value of your home before you buy shouldn’t be one of those things. Unfortunately, for many buyers this is one of the most difficult things to come across. There are many reasons for this not the least of which is that there really are not set values for a home.

The value of a home is something that can fluctuate from day to day, person to person, and situation to situation. Most people find that the actual appraisal value of their home for the purpose of a mortgage does not reveal the same numbers that are assigned to the value of the property for the purpose of property taxes.

With such wide discrepancies in value, how can you know if you are bidding too little or too much on any given property? Ultimately, the house is worth what you would be able to sell it for if you needed to get out from under the note suddenly. You need to be able to get at least a general idea of the actual worth of the home you are considering before you can place a realistic bid on the house.

Realtors

This is where it pays to have a working relationship with a great Realtor. While it is very unlikely that the Realtor can tell you exactly what a house is worth, he or she can pull comparisons -otherwise known as comps - of similar sized and aged homes in the area. This will give you a good general idea of how much the house is worth and you can use other factors such as condition, upgrades, etc. compared to the other homes to determine whether you feel comfortable offering more or less on the house you are considering.

Appraisers

You can have an appraisal made. It is important to remember that appraisals are generally made so that the banks are confident lending the money so that you can make the purchase. In other words, they are not always the most reliable source for obtaining the actual market value of your home. They are not going to be significantly higher than the actual value of the home in general. There are occasions though when you are purchasing the home for an incredibly low bargain rate that the appraisal will reveal a lower market value for the home than you expect. If this happens, make sure you keep other resources in mind before you decide to pass on the house as a result.

There is also the option to have an independent appraisal made. This will not be at the behest of the bank and may give you are more unbiased value. The problem with an independent appraisal is that it can be quite costly. However, if you are preparing to make improvements to the home or feel as though you need an absolute value this is a way to get an honest estimate for the home’s value.

Internet Resources

There are websites that will compare your home to others that have recently sold in your neighborhood and give an estimated market value for your home as well. One of the best in the business for delivering accurate results is the free estimator at Homegain. These websites use a number of formulas to determine this market value and are fairly accurate, all things considered.

The drawbacks to these types of services is that markets trend up and down quite regularly making the data a little bit dated in some cases. Another drawback is that these websites are limited in the areas they service to larger cities and may not work in the city you are buying a home just yet.

It always comes down to the value you place on a home more than anything else. Chances are that if you really want a particular home you will do everything in your power in order to make that home work for you -as long as you can get the financing you need to buy the home. If you are purchasing a foreclosure they will rarely be sold for more than their current market value unless you live in an artificially inflated market or are facing tremendous competition for limited housing options. Be sure you always check your estimates against the numbers at Homegain  though before you decide a home is or is not worth the investment.