5 Questions to Help Resolve Your Rent or Buy Dilemma

The decision to buy a home, one of the biggest financial investments you’ll ever make, can be empowering and exciting.

While a study by the National Association of Realtors showed that 80 percent of consumers believe buying a home is a good financial decision, it’s not always easy to know when the time is right to take the leap.

Choosing to become a homeowner takes not only a financial commitment but also the emotional maturity to create a plan and a timeline that suits your lifestyle and your budget.

Here are some of the factors that should be part of your decision to rent or buy a home:

Are You Emotionally Ready To Buy A Home?

One of the benefits of renting an apartment is that you typically only commit to a lease for one year. If you’re buying a home, you’ll need to choose a neighborhood and a home where you want to live for the next several years while you recoup the cost of buying and build equity.

Do You Have a Five-Year Plan?

While no one knows with absolute certainty what will happen over the next 5 or 10 years, if your plans include switching careers or moving out of state, you’re probably better off renting. If you plan to start a family in the next few years, you should take that into consideration when developing a budget and choosing a home.

Are You Ready to Take Care of a Home?

Along with the joy of decorating your home and changing it to meet your needs, you need to budget at least 1 to 3 percent of the home price each year for repairs. Whether you can handle work yourself or need to hire contractors, you should be prepared for the time and expense of maintaining your property so that it can keep its value and avoid more costly repairs in the future.

Do You Have Any Savings?

While there are loan programs available to some borrowers with a down payment of 3.5 percent and sometimes less, you’ll need some cash for a deposit, a down payment, closing costs and an emergency fund when you buy a home.

What Does Your Credit Profile Look Like?

Request your free credit report to check for errors and any negative information on your report. For a small fee you can get your credit score. Lenders typically require a minimum credit score of 620 or 640 and higher for government-insured loan programs, but for the lowest mortgage rates you need a credit score of 740 or above.

Your answers to these questions and consultations with professionals such as a lender and a Realtor can help you make the right choice and determine if you’re ready to buy now or need to wait a little longer to become a homeowner.

4 Ways to Relieve Moving Stress with Kids

4 Ways to Relieve Moving Stress with Kids

Moving to a new home can be difficult for everyone, especially for the children. You might be prepared for some whining, crying and door slamming once you tell your kids that you are moving across town or across the country and that they have to say goodbye to their friends.

Try these tips to help dial down the drama and make the process less stressful for everyone.

Discussing the move with kids

Prepare your kids by informing them early about the move. Let them know when things are happening and why. If possible, tell them about the move several months in advance. That gives enough time to process the information.

Share information about your new home, state or town and encourage questions. Try to answer them completely and truthfully. It is also a good idea to visit the new home and town with your kids before the move.

Focus on the positive

Children tend to think about the negative side of moving. This is especially true if the relocation means separating from someone they love and depend on – friends, relatives, teachers and coaches. This often results in feelings of sadness, anxiety or even anger.

To make the move easier, try to focus on the positive aspects of what awaits in your home. Tell them that is a great opportunity to meet new people and make new friends. It is also a chance to learn and live in a new city and be exposed to new cultural traditions.

Allow their angst

When children deal with moving, they often become sad or angry. You shouldn’t attempt to hype a move in the hopes of distracting the kids from their negative feelings.

Acknowledge their sadness about leaving their friends behind. Encourage them to have a good cry, if that’s what’s needed.

Try to involve the in the move as much as possible

Some kids may have trouble understanding why you need to move, especially if they were not involved in the decision-making process.

Although children may not have veto power over the move, involving them in the planning can make them feel like participants. Plus, they won’t feel like it is being forced on them.

Tips and Tricks for First Time Home Buyers

While the thought of granite counter tops and white picket fences are dancing in your head, you don’t want to be carried away by these dreams and left with an actual bill in hand.

This could be one of the biggest purchases in your life. So, before you finally decide to buy your first home, take a look at these tips and be ready to hold the key to your new home.

Attend a seminar for first-time buyers

Before you go behind the wheels, you took some time to learn how to drive. The same principle should also be applied when buying a house. Mind you, this is a big investment. So, you might want to take some time and learn from the experts.

Here, you’ll get a few tips on what to look for when shopping for a home and how to maintain it once you’ve bought it. Most of these seminars are free. So, take advantage of it.

Determine your budget

A five-bedroom and three-bath estate may be your ideal house, but you also have to consider how much you can afford or you’ll end up disappointed.

So, before you head out and look for a perfect house, you might want to sit down and determine your average monthly budget. Then, take a look at your expenses. Now, determine how much you have left. This would be spent on monthly mortgage and home expenses. Also, don’t forget to include all the home-related expenses such as taxes, utility bills and insurance.

Pre-approved loan

This will help you determine how much you can borrow from the lender. By determining your spending range, you can narrow down your search to the houses which are within you budget.

Finding the right agent

An experienced, reliable agent could be your insider into the world of real estate. By choosing the right agent, you have a real asset by your side as you decide to buy your first home. Your real estate agent should be someone who could give you quality advice and someone you can trust.

Feel free to ask around and get suggestions from your family and friends. This might not work if you’re relocating to a new city, though.

 

First Things to Do After Moving Into Your New Home

Now that you have arrived at your new home, you probably think that the hard part is over. Not necessarily. We know that you’ve been quite busy for a few weeks now, making sure that all your personal belongings are packed away into several boxes.

Aside from unloading the truck and arranging the furniture, there are still a lot of things you have to take care of as soon as you move into your new home. Check out the list below to find out.

Start fresh

Before you start unloading your things, it would be best to give it a deep clean. Take advantage of your still-empty abode and clean the windows, baseboards, floors and wipe down all the drawers, shelves and countertops. Cleaning the house will never be this easy again. Think about it, no furniture or rugs to move, no curtains to take down etc.

Inspect your belongings

Once everything has been unloaded from the truck, the first thing you should do is to check your inventory list and make sure that everything has been delivered. Also, check the boxes that contain breakable items to check if they have survived the move.

Get your locks changed

If you are moving into a new house, this might not be necessary but if it’s a pre-owned home, it would be a good idea to change your locks as a safety precaution. Mind you, there may be a key out there floating around that would match your lock.

Enjoy a meal with your family

Moving could be stressful and tiring. So, after a long day of work, this would the perfect time to sit down with your family and unwind together. Well, you don’t have to prepare a fancy, homemade meal. You can just order something for delivery or drive to the nearest restaurant for takeout.

Critical Questions You Should Ask Yourself When Buying a House

Buying a home is a big decision that should be given a lot of thought. A lot of people are thinking about buying a house, but even those people who can afford it and have a good credit score are still hesitant to take the leap.

If you wish to buy a home but aren’t quite sure if it’s the right move right now, these questions will help you reach the right decision.

Can you afford it?

Aside from your ability to cover mortgage payments on a monthly basis, there are still a lot of expenses you have to consider when contemplating whether or not you can afford to buy a home. Mortgage payments and other fees will most likely take 20-30% of your monthly income. Are you comfortable spending that much of your income to buy a home?

Is your income dependable?

Buying a property involves a long-term commitment. You may be able to afford a home on your current income, but are you confident that you’ll still be able to afford it in a few years time?

You might want to put off buying a home unless you have a strong sense of certainty about your financial future or are established in your line of work.

Do you plan to stay put?

Most first-time homebuyers do not consider whether or not they’ll be staying permanently when they buy the house. But buying a home wouldn’t make sense unless you are planning to stay there for at least 7 years. Most of the time, it takes this long to recover from all the costs of buying a home.

If you’re not planning on spending the rest of your life in the same house, then you should consider the resale value of the house.

Will you be able to maintain the house?

When you buy a house, the responsibility of maintaining the house comes with it. The hardwood floors you fell in love with are going to need basic maintenance. That floor to ceiling windows need to be washed on a regular basis. The backyard needs to be mowed and the list goes on.

If you are a busy person, it might be extremely difficult to look after those things. So, before you decide if it’s the right house for you, you also have to consider the maintenance.

 

4 Tips for Painless Closing Day

Between the number crunching, mortgage paperwork, home inspection and negotiation, we can safely say that the home buying process is an enormous time-suck. The entire process may take several months. You don’t want to make it any longer by facing some problems during closing.

Preparation is the key to a successful closing. There are certain steps that must be completed to ensure that closing goes off without a hitch.

Here are 4 things you should do for a painless closing day.

Contact all parties involved

Talk to your real estate agent, your loan officer and your attorney a week before closing. Feel free to ask any questions you may have about the process. Make sure that all your concerns are addressed well before the closing date. Knowing what to expect and communicating with all parties involved are the key to a successful closing.

Hire a real estate attorney

Since closing is a legal transaction, you need the services of a lawyer. A few days before closing, you’ll need to meet with your lawyer to review the sales contract before you sign it.

Acquire certified funds

Your real estate agent or closing agent can provide you a copy of the closing statement. Here, you’ll find the amount you owe at the closing table.

Since personal checks will not be accepted at closing, you’ll need to go to the bank to get a cashier’s or certified check a day before closing. Alternatively, you can arrange a wire transfer from your bank account to the closing agent’s account.

Go on the final walk-through inspection

The day before the closing, buyers typically do a final walk through of the property. This is done in order to ensure that the property is in the same condition as when you ratified the contract to purchase it.

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.

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.

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.