Can You Afford A New Home

Buying a new home can be the most exciting thing you've ever done and it can also be the scariest! You need to think things through and look at the big picture. Write things down, weight out everything so that you don't become just another statistic. Here are some tips to deciding if you can afford to buy a new home.

1. How much can you afford? You should talk to a lender to help you with this question. They will talk to you about your income and your debts and together you can decide how much you can afford and how much they will lend you.

2. Get pre-approved for a loan. Once you have talked to a lender about your finances and your credit worthiness they will give you a pre-approval letter. A pre-approval letter will give you the upper hand once you find a home that you want to purchase.

3. It is a good idea to keep your monthly costs under 28% of your monthly pre-tax income. This should include what your mortgage payment will be. Don't forget to include the real estate taxes and insurance if they are not going to be included in your monthly mortgage payment.

4. If you have any long term debts like a student loan, car payments etc, then you should keep your monthly costs under 36% of your pre-tax income. This includes your monthly housing expenses.

5. Decide what type of loan you will be applying for such as Conventional, VA or FHA loan.

6. Decide what type of mortgage you will be using. Are you going to use a fixed rate mortgage or an adjustable rate mortgage (ARM)? If you decide to use an adjustable rate mortgage you must think ahead and plan for when the rates go up, because your mortgage payment will go up when the rates go up, depending on the terms of your agreement.

7. Consider homes in various price ranges.

8. Think about your future plans, perhaps you should purchase a home at the top of your price range. This will give you more time to outgrow your home and will save you money in the long run.

9. Make a budget. Write down every little expense you have - it all matters.

10. Look at your expenses. What do you really need? What can you do away with?

11. Plan for emergencies. Do you have savings? What will you do if an emergency arises? Be prepared, you don't want to lose that beautiful home you saved so long for.

12. Don't over extend yourself.

Ok, now you have thoroughly thought everything through and it's time to make a decision. Go ahead; make the decision one way or another. If you are not ready to buy, decide what it is you need to do to get to where you need to be. Either way, start talking to your realtor today!

Whatever it is start handling it now. The sooner you take care of business, the sooner you will be in your new home. If you are ready to buy don't procrastinate, because you never know when the rates will go up or when you will lose out on your perfect home.

Buying A Second Home

Buying a second home - should you or shouldn't you - that is the question. Well, buying a second home could very well be the absolute best thing you have ever done but you have to do it for the right reasons. Let's talk about a few of the things you need to consider before making any quick decisions.

First you must ask yourself why you want to purchase a second home. Is it to invest in your future? Is it to use for a vacation home? Are you doing it for an additional income? The answer to these questions is critical so let's look at all of the facts.

If you are buying a second home as rental property to use as part of your retirement plan then you have made the right decision. Buying a home forces you to make regular savings in the form of a mortgage payment each month and that is money in the bank when it comes to a retirement fund.

You must make sure,however, that you have enough money to cover the mortgage payments plus any additional expenses such as repairs, yearly taxes and insurance, if they are not a part of your mortgage payment, and anything else that may arise. The good news is if you buy the right house at the right price, your rental property should always stay rented.

Another reason a second home as part of your retirement plan is a good idea is due to the fact that your investment money is subject to less income tax and the interest and taxes may be deductible. So planning ahead could pay off in a big way.

Housing, for the most part, appreciates over time. There are definitely ups and downs in the housing market but buying a home is a long term investment that can ride those tides very well. A home is an inflation proof investment.

The experts have predicted that both fixed rate and adjustable rate mortgages will probably remain in the single digits for the foreseeable future. Therefore, financing a home with a nominal down payment should remain achievable for quite some time.

Buying a home is very exciting and can be a very profitable experience but your decision cannot be made lightly. It is wise to give a lot of thought to why you want a second home, then make a financial plan and stick to it.

If you have some disposable income, then purchasing a vacation home may be just what you need to add a little spice to your life. Then by all means, go ahead and find the perfect house, buy it and enjoy.

Whatever the reason you want or need a second home, please think about your reasons, make a plan and follow through. It is also advisable to talk to a real estate agent about all of your options before diving in. A real estate agent can help you make the best decisions and could potentially save you thousands of dollars in the long run.

Improving Your Purchase Power And Credit

You examine your budget and determine that you cannot afford the home of your dreams because your credit and financial situation isn’t stellar. What’s your next step? Should you keep looking for a lender willing to work with your credit or should you begin to improve your financial picture?

The majority of people want it now. Why do so many individuals seek a mortgage program that will work with their credit situation instead of simply improving the overall picture? While it may be tempting to find a mortgage program that will work with your current financial situation you should stop and think if this is a temporary problem you’re having or if you cannot control you’re spending. If you’re having issues now it’s not likely to change when you become a homeowner.

With a few changes and little extra effort you could be in a completely different state of affairs within a year.

First, you need to analyze your spending habits. Where does your money go on a monthly basis? Consider the following;

1.Stop using credit cards. Credit cards always create financial hardship for most consumers. Often you will overspend with credit cards believing that you will pay for the difference next month. However, that rarely occurs. Additionally, credit card interest is high – too high – and can keep you in debt longer than you think. The best thing you can do is freeze your cards, pay off the debt and keep one for emergency. Go on a cash-only budget. Not only will this force you to live within your means, but you will appreciate your spending more when you are paying with cash.

2.How much car do you really need? Most of us possess a nice car but how often do you need to buy a new vehicle? Without even thinking about it as soon as it’s paid off, many of us run out and upgrade to a newer model. Who needs a new car payment – this will keep you in debt. If you want to save a ton of money monthly, keep up on your vehicle maintenance and keep your old car.

3.How much food do you eat – where and when? Buying out is a trap! How many of us pick up a quick breakfast on the way to work? And if you’re buying lunch every day, brown bag it. The more packaging and preparation that’s involved in making a meal, the more expensive it will be. Prepare a quick estimate of how much you spend each day on food and I’ll bet you can save a significant amount each month.

Your overall goal should be to save money, reduce debt and improve your credit. If you do all three things you will dramatically turn your financial situation around within the first 6 months. Not only will this be reflected within your credit score but your financial picture would be healthier and you’ll have more money for a down payment.

Upscale Downsizing For The Retiree

Today’s seniors are busier than ever with friends, family, part-time jobs and even weekend escapes. Who wants a house to clean, or snow to shovel? And those flower beds that seemed like a lovely idea years ago don’t seem like a good idea today. Yet, while many seniors want to scale down, no one wants to give up their upscale expectations.

The trick is to find retirement properties that offer downsizing with all the amenities you’ll love.

All retirement communities offer independent seniors the chance to live near neighbors of similar age and interests. Most are located close to medical facilities, shopping, and places of worship. Many offer club house activities, a pool, tennis courts and even shuttle bus or van service. So how do you find the retirement community that is all-inclusive and fits your expectations? With the help of a real estate agent you can find the community that fits your needs now and later.

Consider the location of any Active Retirement Community. What is most important to you and how close do you want to be to outside recreational activities? Many of the more upscale communities offer some or all of the following amenities on-site;

• clubhouses

• pools/saunas/spa facility

• exercise facilities

• craft and hobby shops

• libraries

• media rooms

• movie theaters

• hiking trails

How important are planned activities? Many active retirement communities employ full-time activity directors to plan events such as day trips, shopping excursions, special-interest groups, card clubs and book clubs. Additionally, many active retirement communities offer a wide variety of travel options, including day trips, member excursions and private travel agencies on site. Some will also recognize the importance of activities that are age-appropriate for visiting family and friends.

Retirement communities are also forward-thinkers that consider the issues relating to aging-in-place. Convalescent care, assisted living, and respite care are just a few of the concerns active retirement communities have considered. Proactive retirees looking for that all-in-one community can downsize to a home-like environment. Staffed by medical professionals, all health concerns are attended to, while remaining in the same community. There is no need to pack up and move to accommodate growing health concerns.

Preparing for such a transition can be daunting, however when you consider the array of activities and opportunities that are available when you downsize, it becomes easier to prepare for the next chapter in life.

Top 3 Foreclosure Myths That Keep Potential Homebuyers Away

Bad things can happen to good people and we’ve seen this many times, especially when it comes to owning real estate. Many people get themselves into situations beyond their means and the end result in real estate is often foreclosure. Yet, this opens the doors to incredible opportunities to purchase a home at a bargain.

Just about every consumer has heard about buying a foreclosure yet many shy away from these types of transactions because of misconceptions. Foreclosures are abundant in the marketplace and can save you anywhere from 20 to 40 percent off the selling price; sometimes more.

Are you hesitant to purchase a foreclosed property?

Myth #1 – Foreclosures are only found in the bad neighborhoods. This is certainly not true. Foreclosures can occur anywhere. People have mistakenly assumed that foreclosures are always the result of financial irresponsibility and this usually occurs in more crime ridden neighborhoods. Foreclosures have been caused by divorce, medical and health problems, predatory lending and death, just to name a few. Everything from estate homes and undisturbed lots to townhomes, condos and mobile homes have been foreclosed upon. Real estate agents have access to lists containing all the foreclosed properties available for sale.

Myth #2 – I must attend the auction to buy the property

Foreclosure notices are published for several weeks before the auction. This in-between period is referred to as the pre-foreclosure. Real estate agents can easily find homeowners in the early stages of foreclosure and work out a deal. Buying a pre-foreclosure does have its advantages. The homeowner is a bit more desperate to avoid the actual foreclosure. In addition, you are able to actually perform a walk-thru of the home and inspect before placing any contract.

Myth #3 – The only source of foreclosed properties is at courthouse auctions

Many potential homebuyers envision bidding on the courthouse steps to purchase a foreclosure. The fact is there are other opportunities to purchase a foreclosed property with less stress.

Lenders have an abundant inventory of foreclosed properties that never sold; these are referred to as REO properties. REO properties have several advantages;

• You can fully inspect these properties because in most cases the previous owners have already been evicted.

• You can bring a contractor with you to get a detailed list of what needs to be fixed and/or replaced and make an educated assessment of the property.

• Lenders are offering bargain-basement deals on these properties and since they are losing money on their inventory, they have an incentive to quickly sell.

No matter how hard you try when you’re buying any home there are risk involved. Taking on new challenges can be intimidating, yet buying a foreclosure isn’t so complicated that you should avoid this type of transaction. It only takes time and an experienced real estate agent.