Buying a home is not like buying a car.  It’s a lot more complicated and with many more risks for you, the prospective home buyer.  We recommend attending one or more first time home buyer classes or meeting with a Realtor or Mortgage Consultant who specializes in working with first time home buyers. 

Your first step then is to locate a class.  Sometimes you will find classes offered through your local community education resource.  Other classes may be offered by government agencies.  Other sources of classes are Realtors and Mortgage Lenders who sponsor them.  Sometimes they will be listed in the housing or home section of your local newspaper or information website.

Wherever you go, whatever you do, become educated on how to buy a home.  If you know about the risks ahead of time, you can avoid the most common mistakes made by home buyers.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

If your plans for having your dream wedding are getting bogged down in budgets, you should know that all you will need to buy a house is about 3.5% of the purchase price for the down payment. 

• Did you know that the services of a Realtor are FREE to home-buyers?  By tradition, the Buyer’s Realtor’s fee is paid by the broker listing the home that you and your fiancée buy.  You will never write a check to a Realtor as a buyer.

• Negotiating other items “for free” is a part of what Realtors are skilled at doing.  A good Realtor can save you thousands on the purchase of a used  or new home by making sure all standard items are included in the price.
• Even your closing costs can be FREE.  Your Realtor can request that the Seller pay these fees for you, keeping your front end costs low.

When planning “the big event”, those small charges begin to add up.  Pretty soon, your wedding budget has stretched beyond your original plan.  Home buying requires the same kind of discipline.  It’s easy to pay too much if you don’t know that:

• The best loans are those offered to you at market rate with no extra fees.  If you are paying more than 3.5% of the purchase price in closing costs, you are probably paying too much.  If you are paying more than quoted market rates for the mortgage, ask why.
• There are affordable homes in virtually every price range, so there is no reason to overspend on your home.  Pick a house payment range and stick to it, unless you have a really good reason to change (raise at work).  Hold your Realtor accountable to show you homes in this price range.
• Ask your Realtor and Lending Consultant for tips on how to save money on the purchase of your first home.  It’s their job to get you a good deal.

If you’ve been holding off buying that first great or second move-up home, hoping that the market would drop in price, now’s the time to act.  There is absolutely no activity on Capitol Hill that would lead me to believe this tax credit will be extended.  In addition, there are some other things happening that may affect the how much home you can afford.

As you know, the tax credit is a refundable credit of $8000 for first-time homebuyers and $6500 for move up buyers who have owned another primary residence for at least 5 years.  In order to qualify for the credit in 2010, you must write a purchase agreement on a home by April 30^th, 2010.  You must then close on that home by June 30, 2010.  Tick tock.  Tick tock.  The clock is running out.

And as if that isn’t bad news enough, at the end of March, a Federal program which has been purchasing mortgaged backed securities will end.  This program has put an artificial price on these securities, insuring lower mortgage rates.  Most analysts are expecting mortgage rates to rise at the end of this program.  In other words, when the government stops buying these securities, the analysts don’t expect that the private investor market will pick up the slack.

This will mean an increase in the monthly mortgage payment for the home buyer.  For example, a payment on a $200,000 mortgage, principal and interest fixed over 30 years at 5% interest is $1074.  At 6%, it is $1200 or roughly another $125 per month. 

So get out there and buy now.  With the Federal buying program in place , you can lock in a lower interest rate and you will avoid the price increases that always accompany the brisk spring market.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

Home-buying as a couple is likely to be more fun than home-buying on your own.  For one thing, you now have two incomes.  Mortgage consultants will look at your combined monthly gross income to find out “how much house” you can buy.

As a single person with an income of $40,000 a year and no debt, you could afford a home that costs about $120,000.  As an engaged or married couple with two incomes totaling $80,000 a year and no debt, you could now afford a home of about $250,000 a year.

Whether your goal is to live inexpensively the first several years together and save money, or spend more money to get a “dream home” for your first home together, the point is you have choices now that you didn’t have as a single person.

When you join as a married couple, your credit history and debt repayment records will be joined as well.  If one of the pair has a great credit history and the other has a few glitches, it is wise to prepare by:

• Try to keep the party with the good credit debt free.  You may need that good credit to qualify for the size mortgage that you want and need.
• Work on the credit glitches now by seeing a good mortgage consultant.  They will tell you what steps must be taken and when in order to get that good home mortgage with the good interest rates.
• Avoid making large investments or running up new debt when planning to buy a new home together.  Probably, you both don’t need a new car.

Buying a home is not like buying a car.  It’s a lot more complicated and with many more risks for you, the prospective home buyer.  We recommend attending one or more first time home buyer classes or meeting with a Realtor or Mortgage Consultant who specializes in working with first time home buyers. 

Your first step then is to locate a class.  Sometimes you will find classes offered through your local community education resource.  Other classes may be offered by government agencies.  Other sources of classes are Realtors and Mortgage Lenders who sponsor them.  Sometimes they will be listed in the housing or home section of your local newspaper or information website.

Wherever you go, whatever you do, become educated on how to buy a home.  If you know about the risks ahead of time, you can avoid the most common mistakes made by home buyers.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

This answer may differ from state to state so I am talking about my experience in Minnesota in this response.  Condominiums or “condos” as they are called look a lot like an apartment.  The typical condo unit is in a building with a centralized entrance, often a security entrance.  Once you are admitted to the building, each floor of the building will have hallways with condo unit entrances off of the hallway.  A condo unit can be on the second or third or seventeenth floor of the building.  Thus, it has no land under it.  This is unusual in real estate and when condos were first introduced, it took awhile for people to accept the idea. 

When you buy a condo, you get two things.  You get private ownership interest in the condo unit and shared interest in the parts of the building and grounds that are shared with all the other homeowners.   The homeowners’ association, of which you are now a member, manages this shared property.   You can do whatever you want to your unit as long as it doesn’t impact any other homeowner and it follows association rules.  You can’t do anything you want to the shared space unless you obtain permission from the other homeowners.  For example, you can’t change the outside of your door which faces the shared hallway.  Most homeowner associations develop a list of rules and regulations to make sure that all owners respect each other’s rights.  Usually, the heat in a condo building is central and the costs of heat are included in your homeowner association dues.  Some other utilities might be centralized as well such as garbage removal or water and sewer services.

A townhome most typically will have its own front door.  Usually, that front door faces the outside rather than a hallway.  It will stand on a small piece of ground or on its own small lot.  The townhome will typically have its own furnace and hot water heater so you will pay these bills and replace these utilities when they wear out.  There still is a homeowners’ association and you still cannot make changes to the outside of the unit without association approval.   Many first-time homebuyers purchase a condo or a townhome first because they tend to be less expensive and less work than owning a single family home.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

If you are actively shopping for your first home, it’s impossible to avoid looking at foreclosed homes.  They represent almost half of the homes on the market in Minnesota.  There are four things to remember when you consider purchasing a foreclosed home:

The owner of the home is a bank.  The bank representative has never lived in the home and will not tell you anything about it.  They don’t know how old the roof is, whether the furnace has had annual service, whether there has been a water leak in the home and if everything in the home works.  In other words, you will receive no information on the home except what you discover yourself.

The personal property remaining in the home is not owned by the bank and they cannot and will not sell it to you.  If there is still a refrigerator, a stove, a microwave, a washer and a dryer, technically they belong to the original home owner and not the bank.  If the home owner chooses, they can come and remove them before closing.  If they don’t come to remove them and they “abandon” them, then you can claim them at the time you move in.

The utilities in these homes may have been disconnected without properly preparing the home.  If the heat has been turned off in the wintertime and the plumbing in the home has not been winterized and treated with antifreeze, the pipes may freeze and burst.  When spring comes and the water melts, it may cause mold to grow in the home.  These homes can cost a lot of money to repair and restore. 

There are usually one or more problems with foreclosed homes that require remedy by the buyer.  These may be big problems (burst pipes, mold, ageing roof) or these may be small problems (missing appliances, doors, kitchen cabinets etc.).  Be prepared to spend some money after closing to restore the home.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.

Buying a home is not like buying a car.  It’s a lot more complicated and with many more risks for you, the prospective home buyer.  We recommend attending one or more first time home buyer classes or meeting with a Realtor or Mortgage Consultant who specializes in working with first time home buyers. 

Your first step then is to locate a class.  Sometimes you will find classes offered through your local community education resource.  Other classes may be offered by government agencies.  Other sources of classes are Realtors and Mortgage Lenders who sponsor them.  Sometimes they will be listed in the housing or home section of your local newspaper or information website.

Wherever you go, whatever you do, become educated on how to buy a home.  If you know about the risks ahead of time, you can avoid the most common mistakes made by home buyers.

For more detailed information, come to our FREE NO OBLIGATION FIRST TIME HOMEBUYER class or wait for future blogs.  “Simple answers to home ownership questions”.