If you’re getting ready to decorate or buy your first home, get your financial house in order first. To approve you for a loan, banks want to see credit scores, bank statements, credit history and more, so it helps to have a clean path for a lender to navigate.
Whether you are drowning in debt or a millionaire looking for a summer home, the following blogs will help you get on the right track toward home ownership – or at least provide some humorous or insightful input while you navigate your own journey.
My Open Wallet
What: An anonymous 40-year old single woman living in New York is quite honest in her personal finance life on My Open Wallet, from what she makes to what she spends to how her net worth changes. She’s been blogging since 2005, so she’s seen the economy through all highs and lows.
Look for: Her 20 rules to getting on track financially are easily found on the right-hand side of the page, and labels such as “Best Don’t-Buys,” “Get Rich Quick” and “Weird” separate her from the rest.
Get Rich Slowly
What: Blog author J.D. Roth tells his story of conquering $35,000 in debt from consumer and home-equity loans on Get Rich Slowly and now has regular guest bloggers.
Look for: Get Rich Slowly offers up-to-date CD rates and mortgage quotes, as well as tips on lowering your utility costs, living on less in other countries, renting out your home and making drastic changes to afford what you want, including financing a house.
2million’s Personal Finance Blog
What: With a goal of having a net worth of $2 million, Brian, a 34-year-old IBM engineering manager, chronicles his net worth’s ups and downs.
Look for: Find Brian’s spreadsheet breakdown of exactly how much a baby costs pre-birth (including 529 plan contributions), what’s financially involved when you marry someone and how to buy, sell and refinance your home on 2million.
What: Live. Earn. Invest. LearnVest’s mantra came to be in 2008, when Harvard Business School attendee Alexa von Tobel created an online platform to help women gain control of their finances. She was frustrated that she was in line to become a Wall Street fund manager and had never taken a single finance class in school.
Look for: If you want to get financially fit in a disciplined hurry, LearnVest’s boot camp programs get you on the road to learning personal finance basics, getting out of debt, cutting costs or building wealth within 15 to 17 days.
What: Noted in The New York Times and Business Week for its financial savvy, Bargaineering is the brain child of Jim Wang, who began the publication as a 20-something university graduate who knew nothing about managing money. In the five years since its inception, the blog has covered credit cards, CDs, high yield savings accounts, tax brackets, banking and frugal living.
Look for: The Bank Deals section of the sites lets you know how to make a quick $100 to $150 through current bank promotions, and the Frugality section offers tips on how to overcome frugal fatigue and encourages new savings-habits inspiration.
When you leave the office, the last thing you want to do is bring the day’s stresses into your home. Start by leaving as much as you can at the office, and listen to classical music, your favorite CD or just silence on the way home so you don’t hear annoying commercials or songs. Then make your home a peaceful, stress-free place by following the tips below.
Organize your home
When you have time, organize a small space so you feel less stressed during the weekdays. Purchase colorful folders and a binder or filing box and file your bills, medical records, pets’ records, insurance policies and other important papers. Put clothes and shoes you no longer wear in bags to donate to charity, and put all of your jewelry in its proper place. Store seasonal items in the attic and get rid of things you no longer need. For 10 minutes each day, clear out clutter – any clutter – from one room.
Decompress for a few minutes
Each day when you get home from work, excuse yourself to a bedroom or quiet section of the house and take deep breaths for a few minutes. Leave the lights off if necessary or listen to relaxing music to clear your head from meddlesome thoughts.
Keep work separate
If you can’t leave work completely at the office, set up your own “office hours” at home when you will check and respond to emails. Keep work-related technology and papers in your home office or just out of sight of your home’s living spaces.
Make over your bedroom
Just as you keep your work out of your living space, keep your living space out of your bedroom, making it a stress-free, relaxing spot to unwind. Clean your room thoroughly, and remove the television, computer and any cell phones from the bedroom. Block out the light using heavy curtains or blinds that close completely. Paint your room in a calming shade of soft blue, green, purple or taupe, and purchase ultra-comfortable, luxurious bed linens. Install a ceiling fan, as cooler night temperatures will help you rest and relax.
Cook meals on the weekends
Part of weekday stress involves wondering what you will have for dinner, if you have the ingredients on hand and if you have time to make something. Take the guesswork out of weekday dinners by scouring weekday recipe sites such as KraftRecipes.com or Martha Stewart’s Everyday Food site and shopping for ingredients on the weekends. Or, look at sites such as Once a Month Mom to learn how to cook entire meals on a free Saturday or Sunday and store them in the freezer. Either thaw them overnight in the fridge or cook them straight from the freezer by adjusting the temperature and cooking time.
Indulge in aromatherapy
Essential oils in chamomile, lavender, marjoram, neroli, sandalwood and ylang ylang reduce anxiety and relax you, so look for those ingredients in candles and light air fresheners for scenting your home.
Create better lighting
Harsh lighting can make us feel rushed or put under a spotlight. Create a serene atmosphere by installing inexpensive dimmer switches (found at home supply or hardware stores) or replacing overhead lights with lamps. Make sure lampshades are a muted or thick off-white, beige or tan instead of bright or transparent white.
In real estate jargon there are typically two types of markets: a buyer’s market or a seller’s market. However, outside of these tight confines fall other sub markets that may be defined as first time home buyers market or lease to purchase market. Similar to Democrats and Republicans in politics, limiting the markets of real estate to buyers and sellers only excludes a substantial group of participants.
First time home buyers are obviously home buyers. However, first time home buyers also come with some additional needs and challenges. Typically they will have very limited savings to apply towards a down payment or a limited credit history. The mortgages designed to assist first time home buyers are excellent at accommodating these particular challenges. Real estate agents as well need to be accepting and accommodating of the unique needs first time home buyers bring to the table to successfully help their clients locate the right home.
In particular, the current market is a first time home buyers market because of the extension of the $8,500 first time home buyers tax credit until April 2010, Read the rest of this entry »
Bankruptcy can have a devastating impact in a person’s life, making it difficult to get a mortgage loan. Buying a home after bankruptcy is no longer impossible here are some reasons to consider home ownership after a bankruptcy:
Filing for bankruptcy or home foreclosure need not be an incomprehensible barrier to property ownership. However, it will take a while to re-establish a FICO credit score and save an adequate amount for house deposit. Those who borrow money will also need to accept that they will need to pay an extra amount each month (or higher interest rate) in order to get a bankruptcy home loan due to the greater risk of default posed to the potential lender.
If you want to live in a newly built home, be forward about pressing your advantages. Just a year or two ago, home builders were holding fast and firm on asking prices. Now it’s a buyer’s market. Here are ways to get a good deal:
Look for spec homes. These generally are already built, never lived in, and are simply awaiting buyers. Many builders erected them before the economy turned sour with expectations that they would pull in a higher price. Now that price is unrealistic, and builders are negotiating.
Don’t expect that the builder’s financing is the best deal in town. Remember: Over the years you live in your home, you’ll pay more in interest than on principal! Shop around for the best option. If your builder knows you’re being proactive, chances are he’ll give you a better deal. It might come as a lower interest rate, a percentage of the selling price returned to you at closing, shaved points, or some other benefit. He might offer you an in-ground pool if you stay with his financer. But the extra interest could cost you much more than that over the years. Read the rest of this entry »
The choice of whether to use a custom home builder or a production builder depends on what kind of control you want over the design of your new home, and what your budget is. There are several differences between a custom and production builder. In order to make the right choice for you, you need to understand what the difference is between the two. Each type of builder has their appealing qualities that are benefits for the home owner.
A production builder is usually about half the price of a custom builder. This is because they will usually buy several lots of land and build using stock plans which offer some variety of choices and options but not the type of choices that a custom builder will be able to give the home owner. Production builders are builders that usually have large numbers of projects each year. They will build more than 25 projects in a year. Read the rest of this entry »
When two parties negotiate to transfer ownership of a home, they come up with a sales agreement that specifies who pays for what at the closing. There are items that are traditionally paid by the seller, and items traditionally paid by the buyer. But the key point to remember is that whatever the two parties mutually agree, no matter what, just about anything - home improvements, roofing repairs etc - can be negotiated.
Let’s look at items that usually fall to the seller’s responsibility. Excluding his mortgage payoff, which is the seller’s most obvious expense, usually his next largest responsibility is the Realtor’s commission. Traditionally this is six percent of the total sale amount. The seller also pays:
* Document preparation fee
* Tax service and set-up fee
* Settlement or closing fee
* Title examination fee
* Title insurance binder
* Attorney’s fee
* Title insurance (split with the buyer)
* Local tax stamp fee
* Pest inspection
The above items do not amount to very much against the big picture of the sale. That leaves negotiating room to convince the seller to contribute to the buyer’s closing costs.
Why would the seller do that? This usually occurs when housing prices have been driven down, and the seller is motivated to facilitate the sale. It sweetens the deal for a buyer who doesn’t have enough cash for both a down payment and for his closing costs. The way it works is that the buyer’s offer reflects the amount of money that he needs for his closing. To use round numbers, say that John is selling a house for $100,000. Larry is buying it and needs $20,000 down and $2,000 for closing costs but he only has $18,000. Larry then agrees to pay $104,000 and John contributes $4,000 to Larry.
This is perfectly legal, and the only real caveat is that the higher sale price of the home must remain within its appraised value. One other stipulation is that the seller’s contribution cannot be used toward the buyer’s hazard insurance, taxes, or other one-time fees. However, the seller’s contribution often frees up the buyer’s funds so that he has the money to use for those items.
Sometimes the seller agrees to pay points. A “point” equals the cost of one percent of the mortgage. A buyer can pay this amount in order to get a reduction in his mortgage interest rate. But it doesn’t benefit the buyer to pay points if he does not have a down payment of at least twenty percent, because then he has to pay mortgage insurance to the bank. It would make better sense for the buyer to use that money toward the down payment than toward the purchase of points. However, the seller might pay for points — again, to sweeten the pot for the buyer.
There are always alternatives to traditional sales agreements. For example, in FHA home loans, the seller is “allowed” to pay all of the closing costs. The buyer does have to contribute a 3% payment, whether this goes toward closing costs or toward the down payment. Many sellers agree to FHA loans because this is voluntary and they don’t have to pay those costs. However, in VA home loans the seller is “required” to pay the closing costs. Again, this can be negotiated by jacking up the selling price.
Pretty much anything can be negotiated between a buyer and a seller. A seller who has not upgraded aspects of his home might present the buyer with money as an addendum to the sale so that the buyer can arrange the upgrade. Buyers and sellers negotiate every day whether to pay for repairs identified at appraisals, the length of time between closing and possession by the new owner, and many other issues.
During a real estate transaction, the seller has contracted with a Realtor to represent his interests. If he tells the Realtor what he ultimately wants from the sale in terms of dollars, the Realtor can manipulate figures to make it happen. The buyer cannot be advised by the seller’s Realtor. It might behoove the buyer to retain his own Realtor. Each Realtor works for the person who has hired him.
If you have questions about the Boulder real estate market, use AutomatedHomefinder.com, visit NewHomeGuide.com for new homes in most States and Cities.
by Brent Rangen
Recent market activity has caused many to hesitate before buying. Maybe you have been keeping an eye on what is on the market but haven’t seen a REALLY good deal. You know the one - the one that is going to make you jump without hesitation because it’s a can’t miss. If this is your thinking process you are not alone. If you are brave enough to step up you may just be in for the home-buying chance of a lifetime.
A homeowner may be more inclined to work with you and agreeing to terms of contracts, closing costs, contingencies, or anything you desire. The market trends have already started to improve and as they improve the smaller the buyers negotiation platform. Perhaps you will not get a large price reduction. You may be able to get everything included and have a move in ready house for less. That’s not to say that you won’t be able to get a price reduction. However, homes have never been more affordable, the HAI (Housing Affordability Index) is at an 18 year low. Mortgage rates are low. According to Freddie Mac, 30-year fixed-rate mortgages are down over 1% from this time last year at 5.29% for the week ending August 20th. 15-year fixed-rate mortgage averages are down too. Read the rest of this entry »
Readers have been very active in our blog! We strive to provide you great, informative articles, tips and up-to-date post to help you navigate your way in the home buying process. Below, you will find the top five posts you, the reader, found most interesting.
Can the 2009 Home Buyer Tax Credit be Used as a Down Payment? - US Housing and Urban Development Secretary Shaun Donovan announced that the First Time Home Buyer Tax Credit would be able to be used for down payments and closing cost.Of course this is a government initiative so you better read read the details.
2009 Home Buyer Tax Credit Explained - The government is doing more to allure buyers back into the real estate market with the 2009 First Time Home Buyers Tax Credit.
Using the Internet to Buy a New Home - Consumers are equipped with resources that enable them to determine where the best homes are based on surveying the local area over the internet. Here are seven important topics a home buyer can cover before leaving home…
Negotiating New Home Incentives - Home buyer incentive offers buyers may capitalize on are free finished basements or garages, upgraded granite counter tops, free hardwood floors, upgraded appliance packages, and enhanced bathroom or bedroom suit -es. This post offers tricks of the trade when negotiating for new construction incentives.
Buying a Home After a Divorce - Get ready to roll up your sleeves, because a divorce can easily get rough when finances are involved. Here are some things to help you find your way to home ownership after a divorce.
In a world of instant gratification, we all want what we want, when we want it. For some, the real estate market requires immense planning and for others it is a blind jump. Fortune favors the bold, but not the stupid. You have to be educated on what your options are. For some, a land contract or lease to own may seem like an ideal situation, but there are dangers in this agreement.
So what is a land contract? A land contract is an agreement between a home buyer and a private home seller. The seller remains in possession of the title or deed of the property, allowing the buyer to take residence with in the said property and make payments on the property in which the seller would make to the mortgage company.
This is an option most utilized by those who have limited options ofr immediate home ownership due to either financing problems, poor credit scores, or a lack of funds for down payment. Typically a last resort option, a land contract can be a dangerous liaison for the buyer for two reasons.
First, land contracts are sometimes entered into without proper legal documentation. Remember that any verbal agreement is going to be very difficult to back up without proper evidence. Anything you decide to invest in should be covered in a written contract, which should be thoroughly reviewed by both parties legal representation.
Second, the seller retains the legal title of the property along with the responsibility of paying mortgage payments and taxes on the property. Without a legal contract, there have been numerous reported cases of sellers not paying either the mortgage and/or property taxes. In this instance the buyer is unaware that the money they have been providing is not going into the property as they had mutually agreed upon, only to find out when the home enters repossession or a lien is placed upon it. You must always check on these two areas because they affect your investment.
Are all land contracts dangerous? No, but they do complicate the buying process and you still have to invest in the home inspection and pay mortgage payments. If you are capable of financing a home at a reasonable rate, the risk and headache is not worth it. Buying a new home can be easy or complicated. It just depends on how much leg work you do in the begining.