Know More About Resources for First Time Home Buyers

Buying a home can be both exciting and stressful for first-time home buyers. You might alleviate some of the typical anxieties by learning as much as possible about the process. From the first steps of determining your budget and securing your loan to then finding a home, you can proceed with confidence when you know what to expect. It can also help to utilize the expertise of a professional advisor to help you navigate the home buying process.

Determining Budget

Before proceeding with a mortgage, it’s important to determine what you can afford. Not only will you be responsible for the monthly mortgage payments, but you will also need to pay for home insurance, maintenance expenses, and possible homeowner association fees. Saving money to pay for your down payment is important. Lenders have different requirements for down payments, but generally, the higher your down payment, the lower your monthly payments will be. Calculate your monthly income to see what you can afford for your housing budget. Lenders typically recommend that consumers’ monthly mortgage and housing expenses not exceed 31 percent of gross monthly income.

  • Homebuyer Tools, Calculators and Look-ups
  • How To Prepare for Homeownership
  • Becoming a Homeowner
  • Tips for First-Time Homebuyers
  • A Guide for the First-Time Homebuyer (PDF)
  • Making Homeownership More Accessible and Sustainable
  • Mortgages for Home Buyers and Homeowners
  • Tips for First Time Home Buyers

Securing Financing

Once you know your budget, it’s time to find a lender and secure a loan. It’s helpful to request a copy of your credit report so you know your credit score. Your credit score can play a role in the type of financing you can get and the interest rate offered to you by a lender. Many buyers approach a few different lenders to explore various financing options. Banks, credit unions, savings and loan associations, and mortgage companies are the different lenders you might use for financing. Once you find a mortgage that fits your needs, you can apply for pre-approval with the lender. To proceed, you will need documents to verify your employment, income, and credit history. The lender will process your information and return a decision about the loan you can receive from this lender with terms and rates. Once you have this paperwork, you can use it to confirm your financing once you get to that point in your search for a home.

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  • Owning a Home
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  • First-Time Homebuyer Credit Questions and Answers: Basic Information
  • Fixed-Rate Mortgage Options
  • Home Buying 101
  • 5 Foolish Mistakes First-Time Home Buyers Make
  • Shopping for a Mortgage

The Home Search

After determining your budget and securing your loan, it’s time to find a home that you wish to purchase. If you have requirements concerning location or features of the home, make a list to use to narrow your search. For example, if you need a certain number of bedrooms or you wish to live in a specific school district, these requirements will determine where you search and which homes you consider. The search for a home may be easier if you use a professional advisor. A real estate agent can be helpful, because this professional has access to databases of homes for sale. The agent can help you find homes that fit your criteria. An agent can also schedule showings to enable you to tour homes that fit your requirements. After searching for and assessing homes, you can narrow your list to make an offer on the home you want to buy.

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Offer and Acceptance

An offer to purchase is a legally binding contract. Your offer will include the price you want to pay for the home, special provisions for the sale, and specific items that you want to be included in the transaction, such as appliances. An offer may also include specific contingencies that must be resolved for the sale of the house, such as inspections. The offer stipulates a date for the resolution of contingencies and a specific date for closing of the sale.

After submitting your offer to the seller, the seller has the option of accepting the offer or counter-offering with different terms. If the seller counter-offers, you will need to review the different terms to see if you want to accept them. If you accept these terms, you can accept the counter-offer and you have a binding contract. If you don’t accept the terms, you can submit another counter-offer with different terms. These negotiations often take time and effort. A real estate agent can provide beneficial assistance during this phase of the process, because the agent has expertise and training in these negotiations.

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  • Accepting an Offer
  • Purchase Agreement (PDF)
  • Questions and Answers on Offer and Acceptance (PDF)
  • Negotiating – Making a Counter Offer

Contingencies and Closing

After acceptance of the offer by both parties, the work begins to satisfy any contingencies written into the terms. Typical contingencies include inspections, financing, appraisal, and title search. For the home inspection, a professional inspector will examine and assess the entire home to find any issues. If the inspector finds problems with the structure of the home or in areas such as plumbing or the electrical system, the inspector will present a detailed report about the issues. The buyer then has the option of proceeding with the contract or ending it because of the problems. Once all contingencies are resolved and satisfied, the contract proceeds to closing. The closing often occurs at the lender’s office. At this meeting, the buyer, seller, lender, and agents meet to sign all legal documents for the financing and official transfer of the property between seller and buyer. Payment of closing costs and agent fees are also processed at this time.

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Let’s Learn About Guide to Condominiums

The condominium market has been rising steadily. While this trend is not guaranteed to continue, the condo market has regained the momentum and importance it had in the initial condo boom of the 1980s.

Condo buyers fall into three main groups: first-time buyers making the jump from renting; people looking to buy a second home that they will use part-time; and retirees who are trading in high-end homes for the low-maintenance lifestyle a condo provides.

A condominium can be a great purchase under the right set of circumstances, but some people still dismiss them as glorified apartments. If you’re not comfortable living within condo rules and restrictions, and in close proximity to others, then a condo is probably not the place for you. Before you buy a condominium, make sure you understand exactly what is involved in condo living.

What Exactly Is a Condominium?

A condominium development can take the form of apartment-style complexes, townhouses or converted multi-family dwellings. What distinguishes it from other multi-tenant buildings is that the developer has legally declared it a condominium, and individuals can purchase units in the building or complex. In most states, this means that the development falls under specially designated laws and regulations applied to condominiums.

When purchasing a condo, the owner buys the title to his or her individual unit, up to the walls, but not including them. A common description of a condominium is a “box in the air.”

Common areas of the development, such as stairwells, dividing and outer walls, fitness centers and rooftop gardens, are under shared ownership. Each unit owner holds an interest in these spaces. In order to manage the maintenance and repair of the shared common areas, every condo development has a condominium association, also known as a unit-owners’ association. The association is elected by condo owners and makes communal decisions in the interest of the community.

Condo costs include:

  • Down payment, mortgage and property tax
  • Condo fees, otherwise known as maintenance fees. Condo fees are paid by every resident to help with the maintenance of the building, pay the salaries of groundskeepers, concierges or handymen, and provide luxury facilities such as a pool, gym or rooftop garden. Condo fees are paid monthly and are subject to change
  • Special assessment fees. These fees may be requested when an unexpected repair or planned modification exceeds the cost of the condo fees collected

Rules to Live By

Condominiums are governed by a set of rules called Covenants, Conditions and Restrictions (CC&Rs). The rules vary from one condo development to another. They may impose restrictions on pet ownership, noise levels, kitchen or bathroom remodeling projects, and renting. The CC&Rs are enforced by the condo association. It’s a good idea to read the CC&Rs to make sure that you are comfortable with them before you purchase a condominium.

Condo Associations and Fees

The condominium association budgets and determines the condo fees for all units. Condo fees are typically determined by the size of your unit, how many units are currently occupied, and the projected expenses for building maintenance and repair.

Condo associations vary in their organization and expertise. Some questions you may want to look into are:

  • Does the association maintain a reserve of funds to pay for unexpected and potentially expensive repairs? This will help you determine whether you are likely to get hit with special assessment fees.
  • Has the association maintained the building in good repair? Do they handle repairs and maintenance before they become big problems? Before buying, it’s a good idea to get an inspection done on the unit you’re interested in, as well as the entire structure, to identify any potential problems.
  • Does the association have plans to add any facilities, such as a pool installation or gym, in the near future? This could cause a sudden increase in your fees. Ask to see the minutes of the last few condo association meetings, which should reveal any such plans.
  • Does the development have any pending legal actions? Are there any disputes between owners, with developers or with the association that you should know about?
  • What is the association’s reputation in the building? Talk to other owners for comments or complaints about the association’s activities.

A Word about Developers

Developers do not generally retain a long-term interest in a building, but the work that they put into it is important. A home inspection can turn up major structural flaws in the building, but don’t rely on this alone. You should research the developer’s track record, and find out if there have been any problems with its previous developments. Also find out if the developer is still in business and whether it is financially stable. If the developer is no longer in business, your condo association may have little or no legal recourse if major flaws are discovered in the property.

More Information About Real Estate Foreclosure Lists

Q: Why do I have to pay for a list of foreclosure properties? Isn’t this public information?

A: The answer is yes and no. The transfer of real estate property is always recorded in the county courthouse where the property is located. That makes it public information.

A list publisher, or consumer for that matter, must request a list of foreclosed properties from participating lending institutions. Why request? Because there is no law stating that the lender must make this information widely available, just as there is no law requiring you to make public a list of your personal possessions for anyone who may demand it.

You can, if you so choose, visit your county courthouse, go through all the deed and mortgage books and locate one property at a time, those that have been transferred to the lender. This would be an arduous process at best.

Another alternative would be to go to every single auction, in every county you have interest in, and watch which properties go back to the lenders.

So, in buying a list, what you’re mostly paying for is content and convenience. By yourself, it would take hundreds of hours and a lot of money to compile the data you need.

Q: How is it that some foreclosed properties are already sold or otherwise not available on the list I just received?

A: In fairness to all list publishers, many lenders do not update their lists frequently enough. Some real estate properties may already be sold. Some may even have been off the market for quite some time. No list of REO properties can be 100 percent accurate.

Remember, there is no national network. The proper accumulation and recording of this data is an imperfect science. Data quality and integrity is dependent on the source and the method of reproduction used by the provider.

Q: Can’t I just call a bank and get a list of foreclosed properties for free?

A: Yes and no. Most consumers have a difficult time trying to reach the right party at the bank in an attempt to get a list of foreclosed real estate. Some lenders are more cooperative than others.

Citibank, for example, now charges $50 for a list of their properties. While we disagree with this policy, we understand their reason. Too many uninformed buyers call the banks in an attempt to buy properties for 30 cents to 50 cents on the dollar. This charge is most likely an effort to separate the know-nothings from the serious investor. The bank does not want to be bothered by those who do not understand the process or by those who make absurd offers ultimately wasting the banker’s time.

Tips To Boost Your Home’s Resale Value

When it comes to remodeling there are a few general rules that apply to every home. One: it never hurts to upgrade your kitchen or bathroom. Two: focus on improving or increasing your home’s livable space. Three: if you’re going to remodel, make sure you spend the money to do it right.

In a perfect world all of us would follow these rules without exception and our homes would always be up-to-date and designed in accordance with the latest styles and trends. The reality is most of us have to strategically choose what projects to tackle. Often times this means postponing big projects in favor of smaller ones. Fortunately, there are a number of minor remodeling projects that can pay major dividends.

Refinish Your Floors

Wood flooring adds a touch of class and elegance to almost any room. And while wood flooring has many upsides – easy to clean, looks great – it can really show its age if not properly maintained. Over time, your once radiant wood floors can start to look dull and scuffed. But unlike worn carpet that needs replacing, worn down wood floors can be brought back to life by refinishing them. What’s more, refinishing them enhances the value of your home.

Now you might be tempted to go the DIY route and refinish them yourself. However, to ensure the best result it is recommended that you contract the job to a pro. While it might be more expensive, you’ll get the peace of mind that comes from knowing that the job was done right. So, how much can you expect to pay? The average reported cost is around $1,800. To view costs for your area, click here.

Reface Your Kitchen Cabinets

We all know that kitchen remodels yield the biggest bang for the buck. Unfortunately, many kitchen remodels cost well over $20,000. If you want to freshen up your kitchen but don’t want to spend a ton of cash to do it, refacing your cabinets might be the answer you’re looking for, especially if your cabinet frames are in good condition.

Unlike simply refinishing your cabinets, cabinet refacing involves replacing the doors and drawer fronts and veneering the cabinet boxes of your existing cabinets. Cheaper than replacing your cabinets, the average cost of cabinet refacing is around $7,400. For local cost information, click here.

Install a Fireplace

A fireplace adds beauty, ambiance, and warmth to your home. It can also add value. While many prospective homebuyers don’t buy a house based on whether or not it has a fireplace, it could help sway their decision. Of course, few folks add a fireplace with resale value in mind. Most of us do so because a fireplace improves the livability of our homes.