Start Saving to Buy a House Now
There are literally thousands of ways to save money to buy a house. With many ways to buy a house, purchasing a home is not as difficult as you may think.
First of all, you must understand that you “can’t have it all,” so discontinue that form of thinking. You must make sacrifices to buy a house and think of it as an investment for life. This should help to motivate you
You must make some sacrifices if you want to save money to buy a house. There are many ways to purchase a home with a number of home buying programs.
You must curtail your spending in other areas. Home prices are up all over the country. But you can still find affordable housing in the way of a cosmetic fixer (that is a fixer with no major repair problems), or a home with an anxious seller.
It takes skill to buy a house, but you can find that in these tips.
To buy a house understand the monthly payment of P+I+T+I, translated, this is the principle, plus interest, plus taxes, plus insurance, which, added together, equal the total monthly payment.
In order to buy a house, you must put down a down payment and pay additional escrow costs. Learn more here.
Understanding the P+I+T+I for different loan amounts will enable you to better prepare for homeownership. For example, if you could afford $1400, the total for a P+I+T+I monthly payment.
Determine what home cost would fall into this price range. Your mortgage broker will assist you.
Search the Internet or anonymously call mortgage companies for quotes. To purchase a home there are home loans that require 0%, 3%, 5%, and 10% down, plus the closing cost. There are many different home buying programs available.
The lower the down payment, the better your credit should be, to get a reasonable interest rate. The standard down payment is about 10% plus escrow and closing costs. It is a good idea to calculate escrow or closing costs upfront.
You will either pay a down payment or points (toward interest rates). The lower the down payment the higher your points to buy a home or vice versa, depending on your home buying program.
Ideas for saving for your new home could include:
1. Selling a car or furniture for the new home buyer
Many of us have an extra car or a car with excessive monthly payments, insurance, and gas. Sell the car you are not using, or in the case of the overly expensive car, sell it to purchase an affordable model.
2. Get a part-time job and save the money as your new home buying check
You can create income for your home purchase. Even if the job is every other weekend, it will help. The money adds up fast, adding an additional $400 a month will end up adding $4800 to your home buying fund.
That amount of money is substantial for a new home buyer in many of today’s markets.
3. Temporarily discontinue a whole host of unnecessary things for serious homebuyers:
Saving money for home buying is a serious endeavor. If you are serious, you will not miss any of the things that bring you immediate joy. You will instead think of the long-term joy you will get as a new homebuyer.
Here is a list of things to discontinue if you are a serious homebuyer. Movies, parties, vacations, clothes, cable TV, voice mail, newspaper, and excess clothes shopping. You can think of more.
4. Use your tax return:
Put your tax return in the bank toward a down payment on your new home. After purchasing your new home, speak with an accountant. Find out how many more exemptions you can take during the year with your new home.
The accountant will tell you how to adjust your exemptions in order to get the money during the year to help with your new home payment if you are over-paying your taxes during the year.
You can use your future excess taxes (or home deduction) toward your current monthly payments.
5. Use a windfall, such as an inheritance or large bonus:
Take this money and place as much as you can afford toward your down payment. There are many unexpected windfalls, everyone has them at various times. Be ready to save your windfall toward buying a house, just in case.
6. A few of you can live with your parents or in-laws while saving money for your homebuying fund:
There are a few parents or in-laws who will be willing to work with you. If you are willing to give your family a low monthly rent, this helps them and you.
That is, if you are not willing to live with them for free it takes a burden off of both of you, and you don’t feel like you are freeloading.
For example, if regular rent is $1200 dollars a month, offer your relative $600 a month and save the additional $600 a month. In a year you would have $7200 to contribute to your homebuying fund.
7. Ask for cash as gifts to add to your homebuying fund:
When you have a birthday, graduation, wedding, or any other celebration, explain to family members in advance that you are saving for a home. Request that you prefer cash gifts.
You can do this over and over and in no time you will have a substantial amount of money to add to your homebuying fund.
Purchase a home when you understand financing options and costs to buy a house. Your down payment and escrow costs can vary depending on many factors.
There are many ways to save money to buy a house, so don’t be dismayed. There are many home buying programs to assist you in buying a house the right way. Use this information too.
Sell Your Home With a Real Estate Agent and Avoid Major Mistakes
Here are major issues you may face selling your home by owner:
- Real estate agents know the process and documents you need to execute the entire selling process properly.
- The real estate agent will understand how to fill out all the real estate documents correctly.
- The real estate agent can monitor the process and make sure everything is done in a timely manner. They will get the right documents, and help you find the right mortgage and escrow company, title company or real estate attorney.
- Sometimes the real estate agent can negotiate a higher price for your home, than you can since they know the price trends in your area.
- Safety is a major concern when you do a “sell by owner”. When a real estate agent brings someone to your home, they have usually vetted them and met them at the real estate office in advance. Most of the potential buyers you let into your home will drop in randomly from the sign in your yard, so they may have sinister ideas when they come visit, and are not actually looking for a home.
I don’t recommend that anyone sell their home by owner unless you have a buyer you know already as a friend, relative, neighbor, or close associate. Make sure you research the process thoroughly before you start.
The only reason I can think of that anyone would want to sell a “home by owner” to the greater is that 1. You MUST sell to move 2. Don’t have enough equity to pay a real estate agency (the fee is as much as 6%-7% of the sales price).
I have sold two homes as a “for sale by owner” seller. So, it is possible to do a “sell your home by owner” home sell, but It wasn’t as easy as I thought it would be. If you sell you home with a real estate agent you will avoid mistakes that can cost you later.
I made the decision since I had not owned the one home long enough to generate enough equity to pay a real estate agent commission, they other home I wanted all of the equity for a down payment on my next home.
These are the things I learned from my actual experience, my research, talking to real estate agents, and talking to others who had sold a home. I spoke with two friends who are ex-real estate agents, and they helped me quite a bit.
I also took an appraisal course many years ago in anticipation of starting a real estate appraisal business. I did not start the business, but I learned a lot about appraising homes.
Get all the basics of home buying with The Ultimate Home Buying eBook For Women
First, expect to be bombarded by real agent’s eager to list your home, when they see your, “For Sale by Owner” sign. They will contact you over and over hoping that you will become frustrated with the whole process, throw up your hands and say, “where is that pesky real estate agent? I’m listing my house with her or him, yesterday!” Unfortunately, sometimes you will feel like that, but don’t give up too soon.
The following “for sale by owner” information should be helpful:
- There are many legal forms, those dreaded forms! They are dreaded but necessary for the legal transfer of your property to another person. You will need legal real estate sales and disclosure documents for your home sale.
You can get these documents from a title company or you can pay a real estate lawyer to do the work for you. The real estate lawyer will provide you with the documents and fill them out correctly, for no more than an hourly fee. Verify his/her fee, the time it will take, and agree on a fee before he/she fills out the documents.
- Then you need to decide how much to sell your house for. If your asking price is too high, your home could stay on the market a long time. If your asking price is too low you may lose money you deserve. There are several ways to find out the right sales price. If the homes in your neighborhood are very similar, i.e. square footage, number of bedrooms (bathrooms), and similar size yard, you can use the recent sales from the last two homes like yours, in your immediate neighborhood. It gets a bit more complicated when the homes are all different, but appraisers use a similar method.
- You will have to find homes with your similar square footage, number of bedrooms, number of bathrooms, and if the home is on a lake, gulf course or ocean, or has a lot of land. You can also pay for a sales appraisal, use your local yellow pages for a listing of real estate appraisers. The next option is to check city or county records. Just call your local city records office and ask them where you can find information on the most recent home sales in your area. Verify which of these homes are like yours and use those comparisons to price your home.
- Fix up your home to make it presentable to sell. That includes electrical and plumbing in tip-top shape, clean carpet, clean walls, clean doors, an attractive front door, and well-groomed landscaping, and maintenance painting, just to name a few.
- Let the buyer know that he/she can pay for an independent inspection of your home, and put it in writing. The new buyer can have an inspection for plumbing, electrical, and structural soundness as well as other things. To be on the safe side, I paid for an independent inspection on my home sells, I had several things fixed as a result, before I sold the home.
- Let them know that they need to choose a mortgage company, you can also talk to mortgage companies up front. Both buyers in my case had never purchased a home. So, I did some research on the best mortgage companies in the area and gave them several to choose from, this just helped to speed up the process.
The mortgage company gave them title companies to choose from or they can search for their own title company. For safety purposes, you could have the person go to your mortgage company of choice and get pre-qualified, before you show your home. This way you will know, who the person is, and that they are serious about purchasing your home.
- Talk to escrow companies before your put your home up for sale, (in the case of fee simple states-talk to a title company or real estate lawyer for closing).
- Now let’s get back to those pesky real estate agents. There may be an aggressive real estate agent or two who will present you a buyer. If that agent is willing to take 3 or 4%, which very few can, and they have a buyer, then you may want to talk, if your equity covers that reduced commission.
The problem you may experience is trying to negotiate with an experienced real estate agent, they will most likely try to get you to reduce your price for their buyer. Make sure you add up your cost, 4% to the realtor, fixing up the home for sale, your mortgage sellers cost (sellers usually pay around 2%), and your moving cost. This is one of the disadvantages you face when you sell your home with a real estate agent and you don’t have much equity.
Do you have enough equity in your home to pay these costs and still have a substantial amount to put down on another home? Most homeowners who sell their own home, do so because they don’t have enough equity to pay a real estate agent cost of 6 or 7%.
So, don’t let an experienced real estate agent come along and talk you into decreasing the price of your home, and giving them 3 or 4% real estate commission, in that case you could have hired a real estate agent to do everything to begin with, and the agent could get full commission for your home. If there is not enough equity to pay the commission, you will have to come out of pocket to pay the commission, using an agent.
- Keep yourself safe. Consider “for sale by owner” only when you can’t justify the real estate agents commission (6-7% of sales cost). Take appointments from interested buyers, get caller ID and ask for their name and address first. Send a postcard to the address your potential buyer gives you to remind them of their appointment. If the postcard comes back, “not at this address” cancel the appointment.
10. Ask lots of questions on the phone of your potential buyer. Get their name, address, and employment and salary, if they are pre-qualified for a loan or if they will pay in cash, before you give them an appointment. Ask to see an ID before they look. Verify information you are given by searching the internet for their presence. Use a private investigator to authenticate information if you can afford it.
You May Benefit from This eBook Bundle for home buying, car buying and student loans information:
Doing a “for sale by owner” can also be done by companies that help with the process. In other words, most areas have “for sale by owner” real estate agencies that assist you with the process to make sure the sells process is done right and they will help to keep you safe. These agencies usually charge a flat fee. Here you can “have your cake and eat it too”, you will sell your home with a real estate agent, but do it at a greatly reduced cost. The process and the contracts are different for each state, be sure to research your state.
If you have plenty of equity in your home, a real estate agent should be your first option. Make sure you get references on which real estate agent to use, don’t choose one at random. There are good agents and bad agents.
Lois Center-Shabazz | Course Delta Agency
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Owner occupied real estate now and in the future
Your owner-occupied real estate now and in the future, is one of the best long-term investments one can make. Time has shown that owner-occupied real estate can produce tremendous long-term returns. In a few areas of the country the tremendous returns have even been short-term. In some cases, homeowners have sold homes held 30 or 40 years, for 30 to 40 times their original cost.
The least expensive for maintenance cost is the owner-occupied real estate investment, simply because most owners correct problems as they arise.
The hardest part of real estate investing is to know when prices are inflated or low. To understand this, you must do a lot of research or endure a lot of pain until prices stabilize. Residential real estate as an investment requires, skill, intelligence, research, intuition, a lot of time, very hard work, and luck.
Here are items to look for before and during your owner-occupied real estate now and in the future home search, for a successful property.
Good Credit Score
Before you start to look for a home the first steps are to;
Get a copy of your credit report
Go over it closely, make sure all the credit listed belongs to you
If you Find credit that does not belong to you, write Experian.com and challenge the reporting with them.
Stop charging, and start paying off credit you already have
Pay off anything that is past due, and maintain your bills monthly
Do not get a loan until your credit is cleaned up to the best of your ability, this may take months to a few years. Save for a down payment or get a no down payment loan and pay more points (or higher interest rate). Research any mortgage company you plan to use and make sure they are legitimate.
If you are a first-time home buyer consider FHA loans, or NACA (naca.com) to help with the qualifying process. Every city has a first time home buyers organization in town to help with the buying process.
Quality home – Well inspected
Make sure you are getting a quality home, by getting quality inspections from plumbers, electricians, HVAC, and carpenters. There are many home buying nightmares where buyers used a lone home inspector who missed most if not all the problems. If you find problems in an inspection, you will know what you are up against. You can either: 1. Find another home, or 2. Ask for a reduction in price so the problem can be fixed in your increased loan amount.
Home purchased at the bottom or middle of a market
Know if your home buying market is in a bubble or if your home is over-priced. If it is you may not be able to sell the home for several years, even if you must move.
An affordable price is a home that fits your budget and is generally around 30% of your gross. Create a sustainable “overall budget” before you buy.
Look for signs the home has been well-maintained. Inspect the heating and air conditioning units well, the roof should stand the test of a heavy water hose. The floor should be level when you place a marble on the floor it should not roll, if it rolls, you may have a serious foundation problem.
Value increases over time: The more jobs or tourism there is in the area, the more valuable the area may be in terms of increase in home value over time. Then an area with no jobs or tourism can transform in several years when something valuable is added. As well as places that go under due to a decline in an area that has no jobs or amenities. It is best to look at an area with amenities at the time of sell.
No monthly house payment or rent
After the mortgage is paid off, you will have no house note or rent to pay. This is a tremendous savings. But, you will still have maintenance and taxes. It is important to factor in taxes as you age. Will your retirement check be enough for taxes and home maintenance?
The advantages and disadvantages of owner-occupied real estate is listed below:
Key advantages of owner-occupied real estate are:
• You can qualify for the lowest interest real estate loans available
• You can qualify for low down payment consideration, of 5%-10%. There are also extra low-down payment loans for first time buyers who qualify, as low as 3% down.
• You qualify for a full array of owner-occupied tax deductions. IRS Homebuyers Credit
• Most owner-occupied homeowners take pride and joy in maintaining their own home, so the long-term maintenance is usually reasonable.
• Owner-occupied real-estate profits have been tremendous when held long-term.
• There is a capital gain exclusion for taxes up to $250,000 if you have lived in the house for 2 of 5 years.
Key disadvantages of owner-occupied real estate:
• The debt carried when a home is leveraged with a mortgage loan.
• The responsibility of up-keep, for some this is an advantage, since they enjoy the up-keep.
• You are responsible for taxes.
Your owner-occupied real estate now and in the future, has many more advantages than disadvantages.
Lois Center-Shabazz | Course Delta Agency
Author, Blogger, Course Creator, Investor, & Money Strategist
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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.
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.
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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