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Home Buying

3 Best Factors to Consider In Order To Buy a Great Home

There are many reasons you should buy a home. This article applies to owner-occupied ownership when you buy a home, only. Rental real estate is quite different than owner occupied home ownership. I will walk you step-by-step through key elements of the home buying process.

The loans are more difficult to qualify for than owner occupied. Tax deductions are much treated differently. If you do not hold home investment long enough, you could be required to pay short-term capital gains taxes. These home buying tips will enable you to understand the most important elements of home buying you should know before your search.

Home buying the right way take skill

 

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Here Are 3 Factors to Consider Before You Purchase a Home:

1. Home prices are low or reasonably priced for your area, which makes the area affordable

Home prices fluctuate about every 7-10 years. Occasionally, due to a catastrophic event where there are a lot of foreclosures, the prices go way down. When the event is over, and people are back to work the prices usually go back up.

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The prices fluctuate from low to high for several reasons. Some of the reasons are:

1) If there is a big layoff in a town, everyone is trying to sell at the same time and there are few buyers, home prices may take a nosedive.

2) A major industry has moved out of a town and there are few buyers for a home, prices will go down, 3) Interest rates have spiked up and it is hard for buyers to qualify for a mortgage and therefore prices of homes may correct down.

On the other hand, prices go up sometimes when:

1) Loans are easy to qualify for (as in the real estate crises from 2003-2008), and people got loans who should not have them, this causes many loan defaults in a short period of time.

 2) A new high paying company may move into the area and there is a shortage of homes to buy, people start bidding up homes, as in some areas of the U.S. that have high employment and low inventory of homes.

3) New homes are not being built, and new companies move into the area quickly, so there is a shortage of homes.

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You get the picture. Real estate does not go up constantly, as some beginner home buyers tend to think, there are sometimes corrections in a high market, and low markets go high for various reasons.

Never Rush to Buy a Home:

The point here is that you do not want to rush and buy a home in an area that you are not familiar with; the prices may be high and at the top of a market. For reasons unknown to you, prices are starting to come down.

This is important to know because, if you must sell in a short period, you may have to sell for less than you paid for the house. This is called, being under water with a mortgage, you will lose money.

Typical appreciation for a well-kept home usually runs around 3-5% per year, according to the National Association of Realtors.

Know what is going on in your area, make sure you are not buying at the top of a market, unless you know you will be in the area for a long time, otherwise, you could be stuck with a home you can’t sell for more than you paid.

You Will Have the Best House, for The Best Price Possible, if You Follow the Home Buying Process; When You Buy a Home.


2. Buy a home when you have had a steady job for a while.

It goes without saying that income is what pays the bills. Make sure that the company you work for is stable or your business is on sound footing before you buy a home with a mortgage.

Most mortgage companies will want to see 2 years of tax statements, in addition to that. They will usually also order their own copy directly from the Internal Revenue Service. If you are self-employed, agents will ask for  actual bank records of your small business deposits.

During this time also make sure you have savings in place for a down payment, and escrow and closing cost. It is also a good idea to have additional savings to keep in place in case of a job layoff.

3. Buy a Home when you plan on living in the area for several years.

As I discussed in number 1, real estate goes up and down. When prices get high, many times there is a correction and prices come down for a while.

If you happen to NOT do your homework and buy in a real estate market that is about to come down, for a variety of reasons, you may find yourself upside down with your loan for a while.

This will take more years to make a profit on your loan. You will have to ride out the correction, and get back your escrow and closing cost as an initial investment. Normally it takes about 4 years just to get back your escrow and closing cost as the home value increases.

Corrections in the Real Estate Markets:

If you must ride out a correction it could take many years longer. If you happen to buy at the bottom of a real estate market, you could get lucky enough to ride up the value of your home, and you could sell much faster or a profit. It is important the house is well-kept and affordable for you.

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 In any case, you should study your area, study the real estate market, study the economy or the changing of the economy in the area, and know when to buy. That is; know if you are at the bottom or top of a market. Real Estate works best when it is held long term, a key factor in home buying tips.

In normal cases, it could take as long as 8-10 years to make a profit from your real estate purchase. Use this calculator to find out the home you can afford.

This will take more years to make a profit on your loan. You will have to ride out the correction, then get back your escrow and closing cost as an initial investment. Normally it takes about 4 years just to get back your escrow and closing cost as the home value increases. The home buying process tighly weaves, escrow, title, costs, mortgages and time. 

In any case, you should study your area, study the real estate market, study the economy or the changing of the economy in the area. And know when to buy, that is; know if you are at the bottom or top of a market.

Use all of these great home buying tips to buy a great home, but first understand the home buying process.

Home ownership dream for women

Lois Center-Shabazz| Money Strategist | Course Delta Agency

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3 Best Factors to Consider When You In Order to Buy a Great  Home

Get a Quality Home or Mortgage With Big Thing Buying Skills

Home or Mortgage; Buying an Affordable Low Maintenance Home and Get a Quality Mortgage

YOUR BUDGET

The first thing you have to ask is, “How much house can we afford” The payments include P+I+T+I (principle+interest+taxes+insurance). Most of your payment will be principle and interest, taxes vary according to state, and insurance is not a very big cost.

But, you can figure it out with most online calculators. You have to know how to calculate P+I+T+I to get a quality home or mortgage.

You should be stable in your job or with your business before you decide to take the leap to sign on with a mortgage.  

Most banks want you to be on your job or in your business for a solid two years. Set up a file system for steps 1-8, don’t rush and do your research.

Home buying the right way take skill

Step 1

MORTGAGE COST

Below is a typical cost analysis of a home or mortgage with average tax state, always find out how much typical insurance and taxes are in your state before you decide your budget.

Choose a home price you think you can qualify for based on total payment. You will keep adjusting home price until you can find one that is close to your budget. Use my mortgage amortization calculator at LiveRichCalculators.

Say your home or mortgage costs are as follow:
$300,000  price of home
at, 4% interest
30 year
Taxes=6000/yr
Insurance=500/yr
Monthly Payment and Interest=1,432.5
Monthly Taxes and Insurance=541.67
Total Payment=$1,973.92

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Step 2

DOWN PAYMENT AND ESCROW COST

Find out what a typical down payment is at your credit union, bank, or mortgage company. Now, make sure you have the savings or start a savings account with the down payment and escrow cost.

If you find a buyer who is anxious to sell and they have a lot of equity in their home sometimes you can negotiate that they pay your buyer’s escrow cost.

For the example above the downpayment is:
5%=$15,000
A 1% escrow cost = $3000

Step 3

MAINTENANCE COST

Allow a monthly saving account for maintenance cost, most homes have maintenance repairs from time to time.

Old homes usually have a higher maintenance cost than newer homes, unless all electrical, plumbing and other major items replaced. The important aspect of a good home is a good inspection, preferably by tradesmen.

I prefer hiring an actual plumber, electrician, and carpenter to inspect your new home instead of one single home inspector. Some of those home inspectors only take a 6 month home inspection course.

The tradesmen work in the field every day for years. You should also do your own inspection with a moisture meter and electrical meter to see if there are any glaring defects.

If you place a marble on the floor does it roll or stay put, if it rolls you could have a damaged foundation. That is extremely expensive to repair. If you know the repairs you may be able to add those into your mortgage and fix after your move in.

Step 4

CREDIT REPORT

Get a copy of your credit report before you start to look for a home. Read it carefully. Some people are shocked at the mistakes that get on their credit report. Make sure you document the mistakes on your credit report and challenge them with Experian credit bureau.

Experian will usually send the corrections to the other bureaus. When all corrections are in place, get another copy of your credit report, and credit score. Getting an affordable, quality home or mortgage starts with a good credit report and high credit score.

Step 5

PAY OFF BILLS

You know what your bills are, and you know if they are excessive. You will need to find room in your budget for a mortgage. You don’t want a mortgage that increases your current bills per month too much.

Like you don’t want to get from $500 per month of rent to $1900 per month for a mortgage unless you have been saving at least $2500 per month so that savings will go into your mortgage.

You should also still have room for a savings account or two after you get a mortgage. You will need savings for home maintenance, car maintenance, and general emergencies. Pay off as many bills as possible before you start a mortgage.

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Step 6

SAVE FOR A DOWN PAYMENT AND CLOSING COST

Down payments are ranging anywhere from 5% to 10% down. The more you put down, of course, the lower your monthly payment will be. Then, there are buyers closing cost you must pay also. This is usually a surprise to new home buyers.

Closing cost is typically 2 to 5 percent of the purchase price. So, for a $300,000 home, the closing cost would be about $9,000.

Step 7

MORTGAGE RESEARCH

Before you decide to use a financial institute, do your research. If you have a credit union or local bank you do business with and you have good credit, it is usually relatively easy to get a loan at one of those places and you will save on additional cost that is charged by mortgage companies.

If you can’t get financing from your credit union or bank, research the best mortgage companies in your area. You can also ask friends and family who they had good luck with.

Before your visit anyone for a mortgage. Research mortgages, make absolutely sure you understand what a quality mortgage is. Know what the current rates are for a 15 year or 30-year mortgage.

Don’t allow anyone to give you a low-quality mortgage, if they think you have not done your research, some will try to give you a low-quality mortgage, even if you qualify for a high-quality mortgage.

If you qualify for a  low-interest high quality conventional low-interest rate 30-year mortgage, make sure you get one. The industry is full of nice, dishonest people, protect yourself.

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Step 8

MORTGAGE RATES AND QUALITY

Call your local credit union or bank to get current rates on quality mortgages.

Use my mortgage calculators at LiveRichCalculators.

Use the department of housing website to read about various types of Mortgage Issues.

This is most of the information you need to purchase a quality home or mortgage if it is your first home or your second or third.

Get all the facts  to buy a quality affordable home with low maintenance.

Lois Center-Shabazz | Course Delta Agency
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Summary

Remember that buying a home is a serious process. You should take your time and be very methodical.

Some places have home prices that are outrageous – in that case, you may have to drive a long distance to get to work, by living in an affordable area further from your center of town.

Some towns have affordable housing compared to income. Take your time it may take anywhere from 6 months to 5 years to go through the process I list above.  Article Updated 2019

How to get a quality home or mortgage with big thing buying skills

5 Things to Consider For First Time Home Buyers

For First Time Home Buyers

5 Things to consider for first time home buyers

There are many things you need to do before you start looking for a home to buy.  Many people fail because they  go to a mortgage broker first, who rushes them into the process, get a home that is difficult to pay for, and fail. You will not be a part of this statistic if you follow a few simple rules. In this article I will tell you where to began with these 5 things to consider for first time home buyers:

1. The Home Buyers Mindset
2. Why Buy a Home
3. How to Keep Your Home Long Term
4. Resources to Help You Buy and Keep your Home
5.  The First Things You Need to do Before Contacting a Home Buyer Agency.

Ladies, it takes skills to purchase a home 5 things to consider for first time home buyers

1. The Home Buyers Mindset

  • Purchasing a home is an investment if the home is carefully chosen, is well-maintained home, and is affordable for your budget.
  • You have a home buyers mindset if you understand the above and you love to fix things and don’t mind home maintenance from detecting problems to getting them fixed in a timely manner.
  • Before you get involved with homebuying research, you should understand what it means to have plumbing, electrical, heating, air conditioning and roofing problems.
  • There is no landlord to call because you are your own landlord and are responsible for your own home.
  • The earlier you detect and fix things the better off you are.

Home ownership the right way-is pure joy

2. Why Buy a Home?

  • Your home is a place for privacy and this is probably the most important part about home ownership.
  • Your payment is frozen in time, this will benefit you financially long term versus having to rent.
  • Your payment will stay frozen in time provided you DO NOT take a loan against it. Home refinance is where many first time homeowners lose their home.
  • Your home is a place for your kids to grow up in and call home.
  • Your home is an investment in your future, f you maintain it, and keep your original loan.

3. How to Keep Your Home Long Term

  • Understand the first bill you pay monthly should be your mortgage. If you are sick, well, hurt or depressed, your mortgage has to be paid.
  • Do your research in quality home loans to avoid predatory loans. And, avoid refinance loans. Do it right the first time. Your home is not an ATM machine, don’t allow anyone to talk you into to treating it as such, by refinancing after you already have a quality loan.
  • Don’t allow anyone to talk you into using your home for car or education loans. Get a car loan at your credit union or bank, save money for your education or get an extra job to pay tuition. There are also education loans.
  • Keep your home maintenance current don’t let a leak turn into a flood. The difference in cost to repair and the amount of damage is huge.

4. Resources to help you buy and keep your home

  • There are local, state, and federal resources to help you with home buying.
  • You are required to take classes and should take classes in most first time home buyer programs.
  • Check www.hud.gov for federal resources to help you with home buying. Go to your state’s website and search home buying help for state resources.

5. The first things you need to do before contacting a home buyer agency and prepare for a quality low-interest loan;

A) Stop buying stuff

B) Start selling stuff you don’t need, don’t use, and don’t like – get rid of a large car loan payment if you can sell the car and get a cheaper one.

C) Pay off small bills first, that are the easiest to pay off.

D) Stop using credit cards, if you do, pay off your balances monthly.

All of these things will help to increase your credit score. The higher your credit score the better interest rate and quality loan you can get. First time home buyers need to be aware that getting a low-cost quality loan is at the top of their home buying agenda.

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Home ownership dream for women

 

How To Buy a Home So It Last For Decades

  how to buy a home so it last for decades

 

GET A  GOOD HOME LOAN TO BUY A HOME

Affordable Payment (P+I+T+I = principle,interest,taxes,insurance)

Your payment should be within the limits of your income to buy a home. If it is at all possible, base the payment on one income. It’s best to keep it at about 30% of income, before taxes, but you can go higher as you decrease other bills such as no car note, purchasing a home with low utilities, having a short commute and low gas usage, carefully budgeting groceries. The 30% is about what lenders look at also to buy a home.

Research articles about predatory lending and avoid it, if at all possible. It is called predatory because the requirements to qualify are low and the risks are high.

The Secrets to Successful Home Buying for Women

COST OF A LOAN TO BUY A HOME

Many people don’t know that loans cost money. This is covered in the escrow and closing cost fees and is extra from the down payment. There are 50 states and several cities within each state. Every state and the city within the states have their own closing cost schedule. Here is an example showing one city, within one state. The city is Los Angeles and the state is California, on a $200,000 loan.

LOS ANGELES CLOSING COST–LOAN AMOUNT $200,000, TO BUY A HOME

Origination fees charged by lenders         $1,030

Third-party fees $1,196

Taxes    $0

Total      $2,225

Loan amount     $200,000

ITEMIZED ORIGINATION FEES CHARGED BY THE LENDER

Origination points            $586

Commitment fee             $370

Document preparation  $58

Broker, originator or lender         $920

Processing          $1,195

Tax service          $76

Underwriting     N/A

ITEMIZED THIRD PARTY FEES

Appraisal             $461

Attorney, closing or settlement $639

Credit report      $25

Flood certification            $11

Postage/courier $100

Survey  $500

Taxes

Borrower’s share of state and local transfer taxes and fees            $0

Mortgage tax     $0

If you have sellers that are badly in need of a sell, sometimes they will agree to pay your sellers cost. Sometimes you can bundle the sellers cost in your loan.

THE AVERAGE COST OF HOMES

Some places in the country average home prices are $50,000 and Some $1 million. It depends on where you live. In places where there are several high-income jobs and a shortage of home inventory such as San Jose, California the cost of the average home is almost $1 million dollars. In contrast, the cost of the average home in Houston, Texas is less than $200,000.

WHAT TO LOOK FOR WHEN YOU SHOP FOR A HOME

INSPECTION

Many general inspectors do quick inspections and leave major work for you to discover after you buy. You can get inspections from actual tradespeople for a reasonable fee. The trades would include electricians, plumbers, air conditioning, roofing, and carpenters. They would be more likely to find major problems than a general inspector.

When you do find, problems wrong you have two options 1. Ask the sellers to fix them, or 2. Ask them to lower the price so you can fix them with extra money from the loan.

MAINTENANCE

This is difficult, but try to get copies of the electrical, gas, water, and other utility costs. Some homes have high utility cost and some have low cost. The larger the home, the more the utility maintenance cost are. Some high maintenance comes with old or malfunctioning equipment.

DISCLOSURE FROM SELLERS

Some states have strict disclosure laws and others don’t. Request that your seller discloses all potential problems with the home, neighbors, or the neighborhood.

CONTINGENCY CLAUSES

Make your home sell contingent on everything you ask for, otherwise, the deal is off. This will motivate the sellers, real estate agent, and lender to be honest and do everything in a timely manner. It also gives you an out if something is found to be wrong during the process and you can get your deposit back.

TAXES

Get a copy of the taxes paid for the year. Also, the real estate agent or lender can usually tell you what the home taxes are for your home.

ESCROW ACCOUNT TAXES AND INSURANCE

If you don’t want to have to pay a tax bill bi-yearly or worse yet yearly, you can request an escrow account, where you pay your taxes and insurance monthly with your payment. This is much easier than the lump sum, for most homeowners.

DOWN PAYMENT

Your down payment is in addition to your escrow and closing cost. Most lenders want a down payment of 10% to get a good interest rate to buy a home. There are some no-down loans, but generally, your interest rate and payment are more. I prefer the down payment loan, and lower interest rate – it is less risky for the homeowner.

MOST REQUESTED INFORMATION

You will be asked for proof you can purchase a home or secure a loan. You will be asked for 1. proof of income from a job or business, 2. proof of income from income taxes provided by you and the Internal Revenue Service, 3. credit reports that show credit score and credit history. 4. proof of source of downpayment 5. proof of rent history or payment history of current loan.

LOAN BALANCE LIMITS COMMUNITY AND JOBS, TO BUY A HOME

Start with and affordable home. Don’t let a real estate agent or a lender talk you into getting more home than you know you can afford. Sometimes they don’t consider your existing bills or obligations you know you will have in the future, like the need for a better car or a kid going to college.

Look for a good neighborhood. There is no such thing as perfect people or a perfect neighborhood. But, you can search schools, crime and jobs nearby. The searches are not always accurate, but they will give you an idea.

Lois Center-Shabazz | Course Delta Agency
Personal Finance: Author, Blogger, Course Creator, Money Strategist

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