April 06, 2012 12:31:12

 

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August 24, 2011 12:31:27

 

Are You Ready to Buy a Home?

By Michele  Lerner

Published August 15, 2011 | Bankrate.com

 

Are you ready to buy your first home? Buying a home requires a life plan and a financial plan.

"Getting ready to buy a home should mean that the prospective buyers understand that there is more to homeownership than a housing payment," says Jim Walton, vice president of consumer credit with MetLife Bank in Irving, Texas. "Homeownership requires a commitment to a property and to a community."

Long-Term Commitment

In a hot real estate market, buying and flipping appeals to some buyers, but in a more stable or declining market, owning a home requires a longer time to build equity.

"Even in the Washington, D.C., area, where our market is relatively stable, I counsel buyers to look at a minimum of a three- to five-year investment," says Leslie Wilder, a Realtor with McEnearney Associates in Arlington, Va. "In other markets, I think you need to own for a minimum of five years or longer in order to recoup the costs of buying and selling. If you are not able to make that commitment, you are better off renting."

She also says: "Buyers need to think not only about what they want now, but also what they will want in five years. For example, if a couple wants to start a family, they might want to choose a home in a school district they prefer or to live close to work to shorten their commute."

Affordability

A lender can tell you the maximum mortgage you qualify for, but financial experts recommend that you determine your own upper limit for a housing payment.

"A lender will look at your debt-to-income ratio, but at the end of the day you need to be comfortable with your mortgage payment and also prepared to save for other financial needs even after you become a homeowner," Walton says. "Buyers should take a disciplined approach to saving for a down payment, and then they need to be able to continue to save after they buy, for home maintenance and emergencies."

Marc Schindler, a Certified Financial Planner and owner of Pivot Point Advisors in Bellaire, Texas, says he looks at real estate as an illiquid investment.

"If you needed the cash from the sale of a home, it would take time to sell and cost about 7% of the home value for transaction costs," Schindler says. "I would recommend that no more than 25% of your asset allocation should be in real estate. For someone young with few assets, that may mean postponing buying a home until you can save more money."

Interest Rates

Wilder says a good lender can talk to buyers about a variety of mortgage scenarios based on loan qualifications and size of down payment.

"A lender should also talk to you about the impact of rising interest rates so you understand how much you can afford at different rates," Wilder says. "Buyers need to buy within their comfort level, so they may need to compromise on the home they buy. If they decide to wait to save more, they need to realize that if interest rates go up they may not be able to qualify for the same mortgage amount as they can right now."

Qualifications

A credit score of 720 to 740 is generally required to qualify for the lowest mortgage rates. FHA loan requirements are more lenient and sometimes lenders qualify borrowers with a score as low as 620 for these government-insured loans.

"We generally look for a stable two-year job history, but we know people have lost jobs in the past few years so we are looking for a re-established job history if someone has been unemployed," Walton says.

Home Prices and Rental Rates

Schindler says potential buyers should research their housing market to determine whether owning is more affordable than renting or the other way around. In some markets, demand drives up rents, while a glut of homes for sale drives down prices.

"A rent-versus-own calculator can be a good resource, but generally these will show you the maximum mortgage you qualify for at the best rates," says Walton. "Determining how much you want to spend on rent or a mortgage should be a personal decision."

Responsibilities of Homeowners

"Buyers need to make sure and factor in the maintenance costs of homeownership, which can run from 1 (percent) to 4% of the home value per year," Schindler says. "They need to realize that housing costs also include homeowners insurance, perhaps flood insurance and homeowner association dues, not just the principal and interest on the mortgage payment."

Ready to Buy?

"If you are a good, solid buyer financially, with savings, a steady income and job stability, and you can commit to staying in a home for the long-term, then the only thing to think about is whether you want to own a place to call home," Wilder says. "If all those pieces are in place, then it makes sense to buy now."

Read more: http://www.foxnews.com/personal-finance/2011/08/15/are-ready-to-buy-home/#ixzz1VxqEjtKY

 

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June 29, 2011 11:38:07

 

COLORADO SPRINGS, CO, Jun 29, 2011--Alright, so you have received the results of your home inspection-now what? With all the excitement of the house purchase and the new move, many homeowners make the mistake of putting the results of their home inspection aside, thinking they will make necessary repairs later. "Your home inspection results are a great push-off point for making necessary repairs," says Joe Clement, Broker/Owner of RE/MAX Properties, Inc.. "Making the repairs sooner rather than later can pay off in the end."

Infrastructure Issues
If your home inspector found problems with the frame or groundwork of your house, these problems should be addressed immediately, suggests Clement. Similarly, a leaky roof or basement may seem like something that can be dealt with later, but once mold or mildew sets in, it can be problematic to remove, and the future potential for water damage could set you back thousands of dollars. "Re-roofing, repairing and sealing any cracks before you begin to move in your belongings is a smart idea," says Clement. "Pay special attention to areas of entrance, like doors and windows, where cracks and openings can let in damaging moisture and make insulation difficult."

Electrical Checks
Problems with electrical systems are the second most common type of problem reported nationwide by the American Society of Home Inspectors (ASHI).Your home inspection report should include a thorough check of your home's wiring, circuit breaker, water heater, appliance hook-ups and lighting fixtures. "Don't take any chances with electrical systems," says Clement, "especially if you have an older home that may have been designed under an outdated electrical code that is no longer up to par." Even if no major electrical problems show up on your report, Clement suggests installing safety devices such as a ground fault circuit interrupter (GFCI) or arc-fault circuit interrupter (AFCI) as a precaution.

Safety Repairs
"Issues with home safety reported in your inspection should not be overlooked for any amount of time," warns Clement. Things like radon, lead paint and asbestos should be removed before your family moves in.

Negotiate
"Often, people don't realize that a home inspection report with a laundry list of problems can be a valuable negotiation tool for closing a deal," says Clement. "You may be able to ask for a lower price or request that some of the major repairs-such as a faulty wiring system or leaky roof-be made on the seller's dime before you move in."

For more information on Home Inspections in Colorado, please click here to contact one our exceptional Colorado Springs and Pikes Peak Region broker associates.  Or, email info@wesellmore.net.  You may also call one of our four locations: 

Monument: 719-487-6100
North: 719-598-4700
Downtown: 719-635-7653
South: 719-576-5000 

 

 

June 27, 2011 17:44:59

COLORADO SPRINGS, CO, Jun 27, 2011--Most homes, both new and old, have a few problem areas. However, according to Joe Clement, Broker/Owner of RE/MAX Properties, Inc., there are frequent flaws that every buyer and seller should check for before making an offer or putting a home on the market.

Wood

Rotted wood is one of the most frequently occurring maintenance issues, says Clement. The flooring and walls in places like kitchens and bathrooms are often exposed to moisture, and over time this can lead to rot. Buyers should also check basements and garages for rot, as well as the exterior of a house including any decks, overhangs or eaves, Clement suggests.

Water and Drainage

Water damage is one of the most expensive problems a homeowner can be faced with, Clement states. Water intrusion in basements and garages can create a rotting foundation, which is pricey to repair, and mold, which is difficult to get rid of. "Be sure the foundation of your home is properly graded for maximum drainage, and check that the gutters are in working order," Clement suggests.

Roof

The roof is your home's strongest shield against the elements. Maintaining your roof by replacing shingles and patching any leaks can extend the life of your roof, but it is a good idea to have it inspected every five years, and replaced every 20 years. "Keeping your roof in top shape can help you avoid some pretty big disasters, including major leaks and even a total collapse. If you find yourself patching and re-patching sections of your roof annually, it might be time to replace it completely," Clement says.

Making sure you check for and repair these common home defects before placing your home on the market can decrease complications in selling, and improve the results of your home inspection report, notes Clement . If you're buying a new home, paying special attention to these problem areas can help ease the likelihood of future repairs and give you valuable points of negotiation.

For more information on common home defects, please click here to contact one our exceptional Colorado Springs and Pikes Peak Region broker associates.  Or, email info@wesellmore.net.  You may also call one of our four locations: 

Monument: 719-487-6100
North: 719-598-4700
Downtown: 719-635-7653
South: 719-576-5000

 

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