Buying a House After the Sub Prime Squeeze

January 12, 2010

The days of easy lending are clearly over. At this time last year, the money flowed. Predatory lenders signed people up for mortgages without paperwork, gave out loans that covered 100% of the home’s value and weighed them down with outrageous payments that exceeded their income. The fallout has been tremendous, leaving the banks scrambling to clean up a mess of foreclosures and defaults in the aftermath.

They’ve also tightened the purse strings – especially when it comes to the subprime market. Lenders are demanding documentation, downpayments and turning back to more traditional methods of qualifying loans. Those with a long history of paying bills on time won’t be affected, but first time buyers or buyers with spotty credit histories need to get their paperwork in order.

The good news is that there’s no great trick to it. With a good realtor, lender and a bit of financial diligence you can realize your dream even if you’re not a prime borrower. The right home and mortgage are out there for you.

FIVE WAYS TO MAKE YOUR REAL ESTATE DREAMS COME TRUE

1. Find a banker or mortgage broker you can trust

2. Improve your credit rating: even if you’re a year or more away from making a purchase, it’s never too early to start. Don’t kid yourself – anyone can do it

3. Clean up your report: scrub any problems or errors on your credit report clean

4. Educate yourself: learn the terms and take time to build your team

5. Work with a REALTOR: a good realtor will always save you time and money in a real estate transaction

NURTURE YOUR RELATIONSHIP WITH MONEY

There are a wide variety of loan types out there and you should never settle for the first one you see. While interest rates are usually the first consideration, the terms of a loan can be equally important to your long term financial well being. Sorting through the options will be easier and far more effective when you have a strong relationship with a banker or mortgage broker you can trust. That’s why it’s more important than ever to shop around for this key member of your real estate team. In most cases, this should be the first step in your search for a home.

A loan officer at a bank will be able to provide you with the range of lending options available through their institution. There is no charge for this service, though loan officers often work for commission. Banks often have a local advantage and a better understanding of the property you are interested in purchasing.

A mortgage broker on the other hand, is not limited to products from a single institution. The broker works for a fee, most often taken They will shop around to find a loan that suits your needs and will work with the chosen lender until the deal closes. Brokers can often find a lender for a loan that most banks would refuse.

WORK WITH A REALTOR

Your realtor knows the local market and who plays in it. Remove some of the guesswork from your search by taking advantage of their expertise and connections. They may be able to recommend a reputable financier, give you additional information on areas or properties you’re interested in, or even help you find an interior designer when the deal is done.

Buying a home will probably be the single biggest financial investment you’ll ever make but it doesn’t have to be your biggest risk. With the right real estate agent, financing, information, and financial management, you will be the path to a brighter future of home ownership.

By admin | Posted in Uncategorized | Tagged , , | Comments (0)

Buying a House – 5 Steps to Help with the Search

December 28, 2009

A lot of times when home buyers decide to buy that next property instinctively they call their real estate agents to find them new homes that fit their current criteria and needs. This is a great first step because this is what real estate agents do; their job is to find you that next great house.
Sometimes however agents stay on the course and present properties that are easy for them to find and easy for them to work with. However there could be that perfect house out there that gets missed because it’s not in the system for lack of a better term.
It’s a good idea to do some house hunting yourself. Your agent generally won’t be offended if you bring some properties to the table that you want to check out. Listed here are 5 great alternatives to finding that hidden perfect house.
1) Word of Mouth: Telling everyone you know that you are in the market for a new home might give you an advantage in the market. It is very possible somebody knows somebody that has or is about to list their house on the market. Getting that chance to be the first one to look at a property can be invaluable.
2) Real Estate Magazines and Newspapers: These publications usually list new developments and homes being sold. This kind of information in the very least gives you an idea of how much properties are going for.
3) The Internet: Using a site such as MLS.ca to find properties has become the most common way to check out new property listings. The Internet provides instant and updated information about the location, price, and home features for any house in any community. The great thing about the Internet is you can narrow your search down instantly for properties you are interested in looking at.
4) For Sale Signs: Take a drive through the neighborhood of your new community. One: you will be able to compare what you have seen on the Internet or in the paper to what you see in real life. Two: you might find that Gem that is being sold by the owner, usually these houses aren’t as exposed as properties listed by real estate agents.
5) New Development Areas: If a new home interests you, check out the new development areas in your area. Usually builders will have a model home that shows what a typical house in that area looks like. Builders also give new homebuyers options and extras that they can incorporate into their new home if they build from scratch.
These are some great areas to explore along with your agent when buying that next house. Remember using a real estate agent only gives you only 1 option to find that next home.

By admin | Posted in Uncategorized | Tagged , , , , , | Comments (0)

Thinking About Buying a House? Look at Your Finances First

December 22, 2009

So, your friends are talking about transitioning out of renting and dragging you along to look at houses to buy. You may not have thought much about buying a house before, but once it’s a hot topic with your group of friends, it just might get you thinking about it too. However, before you start looking around at houses to buy there are a few things that you should do to prepare yourself. Because you are most likely going to need a mortgage, the state of your credit history can make a huge difference to what kind of interest rate that you can procure. Your credit history is affected by a number of things. Payments made more than 30 days late will drag your score down as will having maxed out credit cards. Having a large amount of debt will also drag down your score, even if you make all the payments on time. A good place to start is by ordering a copy of your credit history so that you can see what sort of state it is in.To improve your credit score, it is a good idea to make sure that all your bills are paid in full and on time. If you have credit cards with no balance, keep the accounts open because available credit in good standing helps boost your score. If you have no credit score then contact your bank about getting a credit card. If you’ve never had a card before you may have to opt for a secured credit card that requires you to have a certain amount of money held in trust as insurance. To build your credit score, use your new card for purchases like fuel or groceries and pay off the balance at the end of every month. Another good practice is budgeting to help you see how much money you have coming in and how much money is going out, as well as where it’s going. There are a number of ways that you can budget your monthly expenses. You can buy a ledger book and do your budget by hand, or take advantage of one of the interesting new budget software that’s available. Some of the fancier software will even import your bank transactions, making the tracking part of your budgeting much easier. You can use your newfound budgeting skills to help you repair your credit score if there are things on it that can be repaired. It can also help you organize your spending so that you’re living at least a month ahead of your bills instead of month to month like many people do. No matter what state your credit is in, there is usually room for improvement. Remember that it’s also never too early to be concerned about your credit score when it comes to home buying; repairing your credit history may take some time.

By admin | Posted in Uncategorized | Tagged , , , , | Comments (0)

Key Location Features to Look For When Buying a House

December 8, 2009

Whether you’re about to purchase your first home or are a seasoned home buyer, it is sometimes difficult to know what to look for in a real estate buy. Certainly you want to make a sound investment, but you also need a house that’s going to be a home to you and your family.
For a brief checklist of what to look for when buying a house, keep reading.
1. School Districts
Whether or not you have a family with young children, school districts are going to affect the value of your home, both now and well into the future. A quality school district with a low student to teacher ratio and solid national standards is not only good for your family, but it’ll also be attractive to potential buyers when you go to sell.
Even if you have no children of your own (or any intention of eventually raising them), a high quality school zone can be a significant boon to the value of the property.
2. Zoning and Building Laws
Before you buy a plot or a fixer upper in that great neighborhood of a town, make sure you have a clear understanding of the zoning and building laws in that area.
Hiring a planner to look at the property may be a wise investment if you’re considering the purchase of a home with the intent to renovate. Many homeowners with big dreams have had them shattered simply because they did not investigate the planning requirements before they purchased and learned after the fact that the zoning constraints or additional expenditures required for the work were too exorbitant.
3. Crime Rates
A good deal may not be so great if you discover that crime rates are rising in a particular area. Protect yourself by checking a potential neighborhood’s crime statistics and compare them to the national average. If the rate is high or the area shows significant signs of vandalism, you would do well to move on.
4. Insurance and Liabilities
Of course homeowners insurance increases along with the value of the home, but are you also aware it can go up if the property comes with a pool (either in ground or above ground), waterfront, river, or other dangerous liability? Even though buying a log cabin heated by a wood stove may seem like a great getaway, however insurance rates will also be higher there too.
Before you purchase a property, coordinate a discussion with your home insurance agent about an annual liability insurance estimate for your potential new home.
5. Maintenance Fees
That low-cost condo right in the heart of the city looks great, but have you factored in the high monthly maintenance costs? Often, if a condo property is going for a low price, you can be fairly certain that the monthly maintenance fees are higher than normal.
Before you buy a home with additional monthly costs attached to it, make sure you’ve budgeted accordingly.
6. Space
When purchasing a home for you and your family, ensure you have not only the space and amenities that you need now, but will also have a sufficient amount for a few years from now. Preparing and paying for needs that extend well beyond today is the key to securing the right house that keeps you happy for many years to come.

By admin | Posted in Uncategorized | Tagged , , , , , , | Comments (0)

5 Tips You Should Know Before Buying A House

December 6, 2009

Too often potential home buyers will spend more time telling everyone what type of house they plan to buy and in what area, but not enough time researching their personal finances, the cost to buy, the location or the real estate market. They will visit a realtor’s office with no real plan other than what type of house they want and information about where they work. Before, wasting valuable time and money, prepare yourself before you walk into anyone’s office by doing the following:
1. Know your personal finances and contributions to your home purchase. Make copies of your last four weeks of pay stubs, bank statements, and references. If you know that you may leave your job, possibly be laid off or the company may be closing, you may want to reconsider buying a house. However, if none of this applies to you, consider how much you have in savings and investments and make copies of these statements as well. Also, research first time home buying programs that offer down payment assistance.
2. Know what is on your credit reports from all three agencies (Equifax, Experian, and Trans Union). Pull your credit reports and make copies, this way you can prevent lowering your score with too many inquiries from lenders. Begin to pay off unpaid balances, dispute any charges that you haven’t made and pay off credit cards.
3. Know what you want. Make a list of features in a house you must-have, would like and not want. Decide on a location and research on how the equity has increased in your area. Consider the price range you can afford. Ask yourself what mortgage payment would you like to make on the house? Some banks offer a free online calculator at their websites to determine home affordability.
4. Know a mortgage broker instead of a mortgage lender & get pre-approved. The broker will work with many different mortgage companies, while the lender will just represent one. He or she will verify that you can indeed purchase a home loan in a specific price range. To obtain a pre-approval, a lender evaluates your credit history, and calculates your housing and debt ratios. You should expect to verify your income, length of employment and source of down payment.
5. Know a Real Estate Agent. In most states, a real estate agent must disclose which party he or she works for. When you contact an agent, verify that the agent can work as a buyer’s agent. They should not disclose confidential information about you to the seller’s agent. Ask the agent about his or her services if you. Also, request a blank copy of the buyer agency contract and study it. Don’t let anyone pressure you into signing an agreement that doesn’t feel right.
A good agent will walk you through the process and return your calls quickly.

By admin | Posted in Uncategorized | Tagged , , , , , , | Comments (0)

Buying a Condo May Be Smarter Than Buying a House

December 4, 2009

Many people don’t realize that there is a big difference between buying a condo and buying a house. Depending on your home owner style, you may prefer to buy one or the other, but the fact is, going with a condo may actually be the better idea.
When you buy a house, you are purchasing not only the actual home, you are also purchasing the land it sits on. You are responsible for the upkeep of the house, its exterior and yard, if any. This can get rather expensive, and, in general, houses are more expensive to buy than condos. While you can customize the exterior of a house fairly easily and usually without complaints, you have to decide if this is important enough to take on the responsibility of a house.
Condos, on the other hand, are homes that share common land and walls. Though there are now instances of detached condos, the majority are still built in rows, somewhat like townhouses, with a common wall between them. When you buy a condo, you are purchasing the interior and will become part of a homeowner’s association. The homeowners are jointly responsible for the property, requiring you to pay a monthly fee for upkeep and maintenance.
It’s important to read the legal documents carefully because there are a lot of rules that go along with joint ownership of the condo complex. Each homeowner’s association will have different rules and the paperwork can get pretty lengthy. There may be regulations against changing the exterior appearance of your home, even by planting flowers. If you don’t do well with such strict guidelines, you’d be better off looking for a place that has looser ones.
That being said, there are some distinct advantages to purchasing a condo, over buying a house. For busy home owners, not having to actually deal with the upkeep and looks of their home can be a very good thing. In some cases, utilities such as water, gas and electricity are included in the monthly homeowner’s fee, meaning a big savings in the long run.
In addition, condos tend to be cheaper to buy, in part because of the monthly fee requirement and in part because they are smaller than a regular house. Still, a condo is an excellent choice, particularly for young, single people or young couples who are looking for something comfortable that requires minimal upkeep. This can be an excellent way to start out your life in your own home. You have the benefits of home ownership, without all the responsibilities that go along with owning property. Security and living stability, but the maintenance is taken care of.
Condos are not right for everyone, but they can be a good choice for anyone looking to own a place without having to take care of it much. Just be sure to look carefully at the documents before signing anything and you’ll be fine.

By admin | Posted in Uncategorized | Tagged , , , , | Comments (0)

Buying a House – How to Save Time and Aggravation

November 16, 2009
By admin | Posted in Uncategorized | Tagged , , , , , , , , , , , , , , | Comments (0)

How to Find the Best Deals for Buying a House

November 12, 2009

Can you guess the most common mistake home purchasers make when starting the home buying process
The most common error is not spending enough time choosing a real estate agent. Why is interviewing prospective agents so important?
If you are looking for the best buy on a house you need the best Realtor to lead the way. Everybody wants a deal when buying a house. And why not? For most people it is the biggest purchase of their life.
But buyer beware! There is another bargain you need to find before you shop for a house. Look for a great Realtor! It may be the most important deal you make.
But the trick is deciding your criteria for choosing a real estate agent.
Line up meetings with three to five Realtors. Just as you are not going to buy the first house you see, you need to shop for an agent. Just as you will probably look at many houses before you decide which is right for you, don’t settle for the first Realtor you meet without interviewing at least two more.
Choosing a real estate agent, the one right for you, to guide you through the entire house buying process is essential to your success.
Here is another tip. A big mistake many home buyers make is skipping from agent to agent to find their dream home. Don’t! Instead make it your intention to find an agent you are going to stick with.
Believe me, don’t let greed trick you into thinking that you are limiting your opportunities by working with just one specific broker. It is actually just the opposite. If you hunt for the best agent you can find before shopping for a house, you are far more likely to discover that dream home you are looking for.
So invite several real estate brokers to your home instead of going to their office. Watch how they relate to you and your family. If you feel they are hesitant around you, move on to the next candidate.
And since you will be spending a lot of time together don’t overlook asking yourself, do I feel at ease with them?
Before they visit prepare a list of questions you will want to ask during the interview. Begin with stating your general goals. In two or three sentences tell why you need the services of a real estate agent and what type of property you are looking for.
Stick to explaining your main goals initially, saving details for later. Keep in mind you are the questioner and the agent is the questionee. Then take note of their reactions to your needs.
Ask these questions during your interview.
#1 Why did you choose the real estate industry? As they speak with you, observe whether they are passionate about their profession.
You can continue questioning.
#2 May I speak with a several of your previous home buyers? In the next day or two, follow through and call them. Look for indications during your conversation pointing to this agent being someone you can work with.
#3 Do you specialize in certain types of property? Personally I like working with agents who focus on certain areas, neighborhoods, or types of property. For example, if I am looking for a condo, choosing a real estate agent that specializes in condos makes the most sense.
#4 Lastly, question agents regarding their plan of attack. Because you have a certain goal in mind, you want to know how they will go about bringing you the solution you are looking for. The best agents know how to succinctly explain their game plans. See if their strategy matches up with your goals.
After interviewing several Realtors, it is time to make a decision. Narrow down your selection by considering these points.
What agents do you feel uncomfortable with? Which ones answered your questions directly and which didn’t? Are they passionate about their profession? Who can you freely question without feeling ignorant? Do they specialize in the type of real estate you want to buy and in an area you prefer? Can they easily explain their strategy and do you agree with it?
Right now is the best time for choosing a real estate agent and buying the home of your dreams.

By admin | Posted in Uncategorized | Tagged , , , , , , | Comments (0)

Buying a House – 12 Ways to Signal Your Real Estate Agent

November 7, 2009

You can learn how to take advantage of your real estate agent’s expertise before buying a house.
You’ve probably heard home buyers routinely complain how their agent didn’t do enough while they were buying a house. In truth, most buyers don’t know what to look for from a real estate professional in order to receive the best results.
With proper homework while shopping for a Realtor, you can be assured you’ve located someone who will watch out for your best interests. She is there to help you make better home buying decisions. So here are some ways your real estate agent can help in the decision buying process and questions you can ask to signal when you want her assistance.
1- A case in point, once you have toured several properties, ask your Realtor to help you rank your choices. An experienced agent can guide you to clarify your prospects and narrow down the field.
2- Additionally your Realtor can assist you regarding finances. Almost everyone buying a house needs a mortgage. Because agents are constantly in contact with lenders, they are often the best source of referrals to mortgage brokers and bankers. They have the inside track on lenders that have serviced other clients well in the past. Based on your particular needs, request at least two referrals of mortgage bankers.
3- Accordingly use your agent to discuss your concerns. When it is time to make decisions it is often good to have an objective opinion. Your agent can assist you in buying a house by pointing out trade-offs and how to set priorities.
4- From the start explain what your housing desires are so your agent can easily point out neighborhoods, communities, and developments that seem right for you. Good real estate agents are out visiting properties to stay current. So be sure and indicate that you welcome input.
5- Everybody understands buying a house is an emotional decision but it is important to know the facts too. Your agent has access to recent comparable sales, how long property has been on the market, and details regarding the area. It would be a shame not to take advantage of her expertise.
6- Along these same lines, if you work with an agent closely she can alert you to property that just came on the market or perhaps is about to be listed. So make sure your Realtor knows that you intend to work exclusively with her. Your loyalty will be rewarded.
7- Real estate professionals are also well versed in Seller Disclosure Statements and can help you wade through this detailed disclosure provided by sellers. This form is designed to reveal any defects regarding the desirability of the home and neighborhood. Your agent sees these disclosures routinely so be sure to request assistance.
8- Because real estate agents see so many houses they can also be sources of advice regarding redecorating, renovating, or remodeling a particular home. We all have a tendency to spend money on upgrades that might provide little or no return. Look at the property through the eyes of your Realtor to plan for value added improvements to the home.
9- The best agents are adept at following the process of buying a house from your first meeting to the final close. You should expect your transaction to be followed from beginning to end.
10- From the initial process of buying a house to signing final documents, you will have many experiences. Your real estate agent is comfortable with the roles of the seller’s agent, lender, appraiser, escrow officer and homeowner insurance agent. Realtors are trained and equipped to work through each step of this process.
11- In my opinion, here is what makes your agent worth her weight in gold. Because of seeing hundreds of real estate transactions a year, she is better able to anticipate problems ahead of time. Diligent agents know how to trouble shoot issues before they get out control. This is probably the most important service your agent can provide and the least obvious. So be happy when your house closes without a hitch. It’s outstanding proof of your agent’s performance.
12- Finally be sure and ask your real estate agent from the start to keep you fully informed concerning the state of your purchase. This is second nature for most Realtors. But it is okay to signal that you want to be kept in the loop at all times.
If you know what to expect from your real estate agent it should be easy to send the right signals and benefit from her expertise while buying a house.

By admin | Posted in Uncategorized | Tagged , , , | Comments (0)