4 Ways to Save on Closing Cost When Buying a Home

Buying a house isn’t cheap. It usually costs hundreds of thousands of dollars. In addition to your down payment, you also need to set aside money for other fees. Closing cost, home inspection, appraisal fee, home insurance, and property tax are just some of them.

Closing cost is equivalent to 3% to 6% of the purchase price. Considering the amount of money that is associated with buying a house, some of you are probably looking for ways save money elsewhere. The good news is that there are some things you can do to reduce closing cost.

Here are 4 ways to save on closing cost when buying a home.

Ask the seller to sweeten the deal

A desperate seller and a struggling market provide the perfect opportunity to negotiate a deal with the seller. Besides negotiating the price, ask the seller if he/she is willing to pay for the closing cost or at least a portion of it. $1,000 to $2,000 may not see much, especially if you’re buying a house that costs a few thousand dollars, but you can use the money on other things.

Negotiate fees with the lender

A lot of money is on the line with closing cost. The good news is that they aren’t set on stone. In fact, fees charged by the lender can be negotiated.

Loan officers or mortgage brokers are usually paid a loan origination fee for bringing business to the company. If you are working with a lender, try to ask him/her if there are any aspects of the fee that can be waived.

Review the loan estimate

Once your mortgage application gets approved, you’ll be provided with a detailed loan estimate. This includes a breakdown of all the fees you’ll be paying. It is important to review the document carefully and keep an eye out for fees with similar names. To prevent unnecessary fees, take time to go through each item with the lender and ask what each fee covers.

Shop around

Most buyers shop around for mortgage rates when buying a house. If you are looking to save money, you may also want to speak with some local lenders about closing cost.

Get quotes from multiple lenders to see if you can find a cheaper option. Compare offers from different lenders to see who offers the lowest rate. If one lender offers a lower rate, ask the other if they can match it. Go ahead. Pit those companies against each other.

Should You Buy a House Before You’re Married?

Before, serious couples would mark their commitment with one another through marriage. Today, however, more and more couples are electing to live in together before marriage. Many of them purchase their home together before walking down the aisle.

Rising rental costs, low mortgage rates, and the ability of deducting mortgage interest from income taxes make the idea of buying a house appealing to most people. According to a survey that was conducted by MONEY, 40% of millennials think it is a good idea to buy a house together before getting married.

Thinking of buying a house with your boyfriend or girlfriend? Here are a few reasons why you shouldn’t.

You could break up

No matter how much you love your partner right now, purchasing a property together is a big risk. People change over time. One of you may fall out of love.

What do you plan to do if things don’t work out? Would you sell the house and split the proceeds of the sale? If you have a solid relationship, then we recommend that you get married first.

It’s a big financial obligation

Buying a house is a huge financial obligation. You’ll need to pay off your loan 15 to 30 years. When you co-sign a home loan together, you’ll both be responsible for paying up the entire amount. You want to make sure that your partner is capable of holding his/her end of the bargain. Otherwise, you’ll be held responsible.

Laywer fees aren’t cheap

Buying a house with your partner is a big financial risk. As such, you need to take steps to protect yourself.

Things could get ugly, so make sure that you put everything in writing. We’re not being pessimistic, but you need to prepare for the worst-case scenario. You both should hire a lawyer and draft a good and airtight co-habitation agreement. This document will protect you from unnecessary cost and litigation in case you co-habitation breaks down.

Lawyer’s fees aren’t cheap. Considering how much money you’ll be putting towards down payment, along with the added fees associated with homeownership, you may find yourself deep in debt.

There could titling issues

Our laws are suited for married couples acquiring assets. Titling will be handled for you if you’re married. For unmarried couples, however, titling can be complicated.

How you title the property dictates what happens to your share later on. If you take title as Joint Tenants with Rights of Survivorship, each party gets 50% of the property. If you sign as Tenants in Common, you can stipulate that one of you owns a larger share of the property. If the title ends up in one person’s name only, it means only one person is buying the house. The other person has no rights to the property.

Tips for Choosing the Perfect Home

Most buyers would look at dozens of properties during the house hunting process. But with so many properties available on the market, it can be difficult to choose the perfect home for you and your family. You may have prepared a list of features you want in a home, but a lot of buyers end up getting swept away by a stylish property.

In the hopes of making the selection process easier, we listed down some tips that will help you find the house of your dreams. Here are some tips for choosing the perfect home.

Location, location, location

Once you’ve settled on the idea that you want to buy a home, the first thing you need to do is to determine where you want to live. It is one of the most important factors to consider when buying a house.

You may fall in love with the house, but you may end up unhappy and unsatisfied later on if the neighborhood doesn’t fit your lifestyle. Be sure to consider your current needs and lifestyle when scouting out different neighborhoods. You want to make sure that the neighborhood has everything you need to live a comfortable life. That said, we suggest that you do some research about the neighborhood. If you have kids, research the school district and the crime level in the area.

Buy what you can afford

Now that you have decided where you want to live, it’s time to determine your budget. Buying a house is a big financial obligation. It is best to determine how much you can afford before you start looking at houses. The last thing you want is to fall in love with a house, only to find out later on that you can’t afford it.

Once you have figured out your budget, make sure that you stick to it. Never settle for a house that is out of your budget. If you do, you may find yourself in a deep financial crisis. Worse, you may end up losing your home.

Go for the long haul

In order to recoup your investment, you need to stay put for about 5 to 7 years. That said, you need to look for a house where you can see yourself living in for several years. Also, you need to consider the value of your home in the future. You should put some thought into how easy it would be for you to sell the house when it comes the time that you need to move.

Be patient

Buying a house is a big decision. You can’t rush into it. You want to make sure that you’re prepared both financially and emotionally on being a homeowner.

Finding the house of your dreams takes time. Since you’ll be staying in that house for a long period of time, you want to make sure that it suits your needs, lifestyle, and taste. There are a lot of houses out there. Go ahead and look at a few houses before making a decision. Never settle for the first house you see.

New Year’s Resolutions for Prospective Homebuyers

The New Year is the time for goal-setting and resolution-making. Some people decide that they are ready to be homeowners and buy their first home this year. If you are one of them, then you need to take action now.

Here are 4 New Year’s resolutions prospective homebuyers should make.

Save money

If you are planning to buy a house this year, then you should have saved enough money right now for your down payment.

Buying a house is a big financial decision. Just because you have saved enough money for the down payment, it doesn’t mean that you’re ready to buy a house. Remember, there are several fees that come with home buying. This includes home inspection fee, closing fee, home insurance fee, appraisal fee, moving fee etc. Make sure that you include these fees into your budget.

Check your credit

We know you’re excited to start house hunting. But there are a lot of things that need to be done before you start looking at houses. Checking your credit report is one of them.

Your credit score can impact several areas in your life, including your ability to buy a house. Lenders will use it as a determining factor whether or not you get approved for a mortgage. Checking your credit report ahead of time will give you an idea what kind of shape your credit score is in.

Get a copy of your credit report and check it for any errors or discrepancies. If you find any errors, do not hesitate to dispute them with the credit bureau.

Improve credit score

Improving your credit score takes time. If you are planning to buy a house in the near future, it is important to take steps as early as now to improve it.

If you have a lot of debt, try paying down your balances and make sure to pay your bills on time. Pay off credit cards with small balances. The smaller your debt to income ratio, the better it is for your credit rating.

Know what you want

Most people would start the buying process by visiting dozens of houses. House hunting can be fun. However, you first need to know what you want before you go out there and start looking at houses.

Sit down with your spouse and discuss what features you want in a house. How big of a house do you need? How many rooms do you need? Do you want a house with an updated kitchen? Do you prefer a house that is near your office? Make a list of features you want and discuss it with your real estate agent.

3 Winter Home Buying Mistakes to Avoid

Winter is a great time to buy a house. Houses are priced low, there are fewer buyers, and real estate agents have more time to assist you through the buying process. Despite these advantages, there are some costly mistakes everyone should dodge when buying a house.

Here are 3 mistakes to avoid when buying a house in winter.

Lowballing your offer

Most sellers who put their home on the market in winter are desperate to sell their house fast. Most buyers try to take advantage of it by lowballing their offer. They may be in desperate need to move out of their house, but you won’t be able to buy the property if you lowball your offer.

Sellers love their home. They have stayed in that house for several years and consider it their most prized possession. Lowballing your offer can offend the seller. If you are serious about buying the house, make sure that you place a competitive offer that isn’t offensive to the seller.

Assuming you’ll automatically score a sweet deal

With the chilly winds and freezing temperatures, house hunting during the winter can be a bit of a challenge. In addition, most people are also busy with the holiday celebration. As such, most buyers put off buying a house till spring.

With fewer buyers during this time of the year, most buyers assume they’ll get a great deal. Sure, the prices are lower and you are less likely to end up in a bidding situation. But you also need to consider that the number of houses on inventory is also quite low. So, if you decide to buy a house in winter and you’re expecting to get a bargain, you may end up disappointed.

Ignoring possible closing date delays

In a real estate transaction, buyers and sellers agree to a target closing date. But most of the time, it doesn’t take place on the specified date.

Closing delays happen due to a number of reasons. Errors in documents, problems with down payment, and last-minute requests from the lender are some of the most common causes of delay. To ensure that the closing takes place on or before the closing date, make sure that you have your down payment transferred to the closing agent, check all the documents for error, and make sure you have all the necessary document needed to complete your loan.

4 Smart Tips to Make Moving in Winter Easier

Winter is a great time to move. Since most people are out on vacation or busy with holiday get-togethers, you can get great deal with moving companies. However, moving house during the winter is not without challenges. Snow, ice, and freezing temperatures can make the moving process even more difficult.

Here are 4 smart tips to make your winter move easier.

Keep an eye on the weather

Winter weather can be unpredictable. Even if the sun has been shining all week long, a blizzard may suddenly pop up just as you’re pulling away in your car.

Check weather reports from time to time and make sure to follow it up until the moving day. Keep the radio on until the movers arrive so you get the latest updates. Anticipate any weather challenges and adapt to them.

Keep the heat on

You might be tempted to have your utilities disconnected prior to moving day, but please resist the urge to do so. On moving day, you’ll be opening and closing the door many times as the movers carry your boxes. This will send cold air into your home. Without the heat, everybody will feel cold and uncomfortable. You’ll want to keep the heat on on moving day.

Protect your belongings

Some items are especially vulnerable to cold temperatures. Electronics and other cold-sensitive items should be kept indoors for as long as possible and should be transported in a heated vehicle to avoid damage. Objects that are made of wood should be insulated during a move. These items can warp when exposed to freezing temperatures. Books and other documents will also need additional care. Place them in waterproof bins and make sure that they are sealed tight before they get loaded onto the moving truck.

Clear snow

We understand that you have a lot on your plate right now, but make sure that you shovel snow prior to moving day. Snow and ice can be slippery. Clear the snow to prevent anyone from getting hurt. You may also spread rock salt on the ground to slow down the re-icing process. If snow is falling, we suggest that you mix calcium chloride with the rock salt. This will make snow and ice melt faster.

Tips for Buying a House in Winter

Most people put off buying a house ‘til spring because there are more properties to choose from at this time of the year. Spring is one of the busiest times of the year in the real estate market. If you decide to buy a house in spring, you are likely to find yourself in a bidding war. If that happens, you may lose the opportunity to buy the house of your dreams.

Why wait for spring? Winter is actually a great time to buy a house. Here are some tips for buying a house in winter.

Get pre-approved

Getting pre-approved is one of the most important things you should do once you decide that you want to buy a house. This will not only help you determine how much you can afford, it will also give sellers that impression that you are a serious buyer.

With a pre-approval letter on hand, you’ll have a competitive edge against other buyers. But since there fewer buyers during this time of year, doing this step early on will ensure that go you’ll go though the buying process smoothly.

Use your imagination

Most people wait until spring to sell their home. If they decide to put their house on the market in winter, they are probably motivated to sell.

Some are in a hurry to sell that they don’t have time to renovate their home. Others don’t have the budget to tackle some home improvement projects. They choose to sell in winter since they know that there will be less competition. They’ll no longer have to compete with newly renovated houses. Often, you may find properties with old carpets, white tile counters, and oak cabinets. It may not also look as great since it is covered in snow. Try to look past these things and use your imagination. Imagine how the house would look like once spring comes around. You may also want to give it a few touch ups to make sure it suits your taste.

Craft a competitive offer

Most buyers assume that they’ll get a good deal just because the market is a bit slow. Thinking that the owners are desperate to sell, some buyers would lowball their offer. Not only will it be insulting to the seller, you are also likely to lose the property.

There may not be lots of buyers looking around in winter, but you also need to keep in mind that there are also fewer inventories. If you lowball your offer, you’re just giving other buyer’s a chance to buy it. If you are serious about buying the house, craft a competitive offer.

Things to Look for When Buying a House

House hunting is one of the most exciting stages of the home buying prices. You get the chances to dozens of gorgeous homes while shopping for your future home.

If you are in the market for a house, then this blog post is for you. Here are 4 things to look for when buying a house. Hopefully, this list will help you get your search off on the right foot.

Home’s exterior

Let me guess. You liked how the house looks like from the outside that’s why you requested to view the property. But buying a house goes beyond the appearance. You want a house that doesn’t just look good. You want a property that is in great condition.

Before you enter the house, try to pay attention to the exterior. Look at the paint on the walls, the porch, driveway and walkway. Also, try to look up and see if the roof is in good shape. This will give you an idea how the owner takes care of the house.

Size and floor plan

Most buyers have a good idea about what they want in a house. But it’s easy to get swept away once you start looking at houses. You might be tempted to get a property that is bigger than what you need, but please resist the urge to do so.

We understand that you need a bigger space, but do you really need a house with 5 bedrooms? Think about it. The bigger the house, the bigger your expenses will be. You’ll need more furnitures. You’ll pay extra on utility bills, property taxes, heating and cooling cost and maintenance.

The neighborhood

The house is absolutely lovely. You fell in love with the house that you’re contemplating making an offer outright. But before you do, we suggest that you investigate the neighborhood first. Walk around the area to assess the neighborhood. Are there restaurants, schools or park near the house? Is it accessible to public transportation? How about the neighbors? Do they seem nice?

You need to understand that the neighbors and other amenities in the area are part of the package. It may be easy to get rid of the dingy carpet or paint the walls a different color, but there is nothing you can do with the location and the community. Be sure to take this into consideration when buying a house.

Home inspection

Buying a house is something you shouldn’t take lightly. Before putting your hard earned money into that property, you want to make sure that the house you’re investing in is in pristine condition. As such, we highly recommend that you get a home inspection.

A home inspection is a visual inspection of the property. Here, you’ll have a good idea about the overall condition of the property, as well as the flaws and issues that are present in the house. This will help you make a more informed decision.

Best Sources of Down Payment Money to Buy Your First Home

Buying a house is a dream a lot of people share. For many, coming up with a down payment is one of the biggest tests that stands between them and their dreams of becoming a homeowner. The mere utterance of the word strikes dread in the heart of many potential home buyers.

Unless you’re willing to pay in cash, you will need to put down 3.5% or more of the value of the property in cash. We know it’s not easy to save up money for a down payment. To help make the process easier, we listed down some of the best sources of down payment money for first-time homebuyers. Here are some of them.

Personal savings

If you are planning to buy a home, then you need to start planning and saving to avoid financial strain down the road. Start by saving a portion of your salary and cutting down on your spending. The FHA will accept cash saved at home, your savings or checking accounts.

If you haven’t saved enough money for a down payment, then it’s time to examine your spending and tighten your budget. If you usually pay $100 a month on your cable bill and $20 a day on coffee and lunch takeouts, that’s almost $6,000 a year you could be saving. Cut costs by preparing your own meals and streaming movie and TV shows from online sources.

Retirement accounts

As a general rule, the money in your retirement account should stay there until you retire.  Some retirement accounts, however, allow you to make a withdrawal from your individual retirement account or borrow funds from a 401k.

It is fine to borrow money from your 401k if you only need a small down payment and you’re getting an FHA loan. Remember that you’ll be required to pay a penalty of 10% on the amount withdrawn, so we discourage you from tapping into your 401k if you’re planning to withdraw a huge sum of money.

Family gifts

Another way to fund a down payment is through family gifts. Your parents, in-laws or even grandparents may be willing to give you a gift of money to help you fund your home.

Some lenders would approve your home loan, provided that your family or relative won’t ask you to repay the money. To prove this, lenders would require you to provide a gift letter, which includes the amount of the gift, your relationship to the person gifting the money and that the money doesn’t have to be repaid. The best part of receiving money from family and relatives is that you don’t have to pay taxes for up to $13,000 gift money.