If you’ve Google-d or Bing-ed or Yahoo-ed in order to do research on home buying, you know there’s A LOT of information out there… mind boggling amounts of information… contradictory information… confusing information…technically worded information.  What’s a person to do???

Rule Number One:  If it sounds too good to be true, it probably is.

There are a lot of incredible offers out there.  Auction houses promise to sell you a home for $1 or more.  Banks offer astounding mortgage interest rates.  Credit repair services promise to fix your bad credit for a low fee and enable you to get a mortgage.  Nothing good comes cheap.  Use your head.  Check with an expert.  Make sure you know all the fine print in the offer.

Rule Number Two:  If it can’t be explained simply, they are trying to fool you.

Real professionals, both Realtors and mortgage consultants, know how to explain complicated ideas in simple terms.  If you run into a website where you are reading double-talk or which says, “trust us”, beware.  It’s your money and your new home.  Walk away from someone you don’t trust and work with someone you do.

Rule Number Three:  If the costs sound astoundingly low, they haven’t listed ALL OF THEM.

 Homes are more like pieces of custom jewelry than boxes of cereal.  They are all unique and have unique costs as well.  Some websites might have a low-priced home offered on their site in order to attract you to it.  However, the offer may be limited to people with high credit scores or large down payments and they fail to tell you that.  Make sure you get ALL the information before you lock in a loan or buy a home.

The best way to make sure you don’t make a fatal (i.e. expensive) error is to work with a loan consultant and a Realtor who are experienced, honest, and willing to spend time with you to answer your questions and guide you at your pace through the home buying process.  Come to class and find out how to locate the best!!

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 a first time homebuyer and you wanted to take advantage of the 2009 first time home buyer tax credit, pay attention!!   As of this moment, there has been no extension of the $8000 tax credit by Congress.  It will expire on November 30, 2009.  That means that you have to purchase your first home and close on it BEFORE December 1^st, 2009. 

I have some advice for you.  Forget “short sales”.  They aren’t short and it can take as long as three or four months to hear from the seller’s bank, which has to approve the sale.  You don’t have that kind of time.  Focus instead on foreclosed homes or seller owned homes.  The bank owning the foreclosed home  will respond to any offer usually within the week.  With a seller owned home, not a short sale, you could receive a response  in 24 hours or less.

Don’t wait till the last minute.  In this turbulent market, loans are more complicated, houses have more issues, and foreclosures add a whole level of complexity.  Do plan to close by the end of October or middle of November, at the latest.  If anything goes wrong, you’ll still have a cushion of time to make the deal happen.

Remember, it’s about the home.  It’s great to get a tax refund of $8000, but you still have to live in that home for 3 years or more for the refund to be permanent.  Don’t buy a home just to buy a home.  Make sure it’s the right one for you.  Don’t wait till the last minute and buy in a panic.  Homes in the lower price ranges are moving briskly.  Start shopping now and keep an eye out for new listings coming on the market.  They are more likely to contain “stars” rather than the “dogs” than have been on the market for months.

Shop smart.  Shop now.  Get the credit. Get a great home. Good luck.

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 your first home is a big step.  You need two things before you decide to make that purchase.  First, you need to have all your financial ducks in a row.  Make sure you have money set aside for the down payment and that you have some money in reserve for any problems that might come up after you buy your home.  Look at your credit report and see if you need to change or correct it.  Make sure it presents you in the best light possible and that it tells the truth about you.  If there are mistakes or inaccuracies, take the time to get them fixed.

Second, make sure you are emotionally ready.  Buying a home means assuming responsibility for the new home.  It is a big financial commitment and a time commitment too.  When something breaks or needs repair, there is no landlord to call because the landlord IS YOU. 

I advise you to NOT buy a home if you also are planning a wedding or having a baby or changing jobs.  At least provide some time between these events.  Make sure that you are not taking on too much at one time.  All of these events are stressful and cost money.  Home buying should be a pleasant experience but it can become a nightmare if you are under too many time pressures and too many money pressures.

First time homebuyers will find good opportunities year round, but here in Minnesota, fall is especially a good time to shop.  The market is usually a little slower and sellers are delighted to see you visit their home.  Prices tend to be a little softer in the fall and mortgage interest rates usually drop in the fall as well.  However, any time is a good time when you are ready.

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”.

The first-time homebuyer tax credit has been getting a lot of publicity lately.  Although it’s pretty easy to qualify, there are still some guidelines which must be followed.

First, and probably the most important, you must be a FIRST-TIME HOMEBUYER.  So if you married recently and your spouse owned a home previously, you can’t qualify for the credit.  BOTH of you must be first-time homebuyers.  How the Federal government defines this is someone who hasn’t owned a home in the previous three years.  This must be calculated to the date of the sale of the previous home.  For example, if you are buying a home and closing the home purchase on March 31, 2009 but you sold a previous home in April of 2006, you wouldn’t qualify.  You’d have to wait till after the three year anniversary of the home sale.

Let’s say that you are a first-time homebuyer but you want to buy the house as an investment and rent it out.  Sorry, once again, you don’t qualify.  The tax credit goes to those who are buying the home as their own residence.

Once you purchase the home and claim your $8000 tax credit, you must live in the home for a full three years in order to keep the credit.  If you sell before the three year anniversary of the purchase, you will have to repay the credit.

The credit is a once in a lifetime opportunity.  There has never been a credit like this before and there likely will not be one again, at least in our lifetimes.  Take full advantage of it and buy a home before December 1^st of this year.  Free money.  $8000 to spend on the home or on a great vacation.  Hurry.  It’s too good to pass up.

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”.

The mind boggles!!  $8000 in free cash, very few strings attached, from my favorite uncle, Uncle Sam.  I’m sure you’ve already spent this money in your mind but here area a few more suggestions related to home ownership.

Let’s say you are short of cash for the down payment but you have a blood relative who would “gift” you the money if you promised to repay them some time in the future.  If you were buying a home on an FHA mortgage, you would need 3.5% of the purchase price in down payment money.  For $8000, you could buy up to a $230,000 home (assuming you qualified for that much monthly payment) and take a loan from uncle/aunt/grandma/mom.  You could then collect your $8000 tax credit from Uncle Sam and pay them back this year.    If you’ve read some of our other blogs, you know that the closing costs can be paid by the seller.  You could get into that lovely home for FREE.

Or let’s say you are interested in a home but it needs some redecorating such as new carpet or flooring throughout ($4000), new paint in all the rooms ($300) and some new appliances in the kitchen ($3000).  None of these fixes would make it hard for you to get mortgage approval but they might make it hard for you to LOVE your home.  Buy the home, claim your $8000 tax credit and use the cash to create a home you LOVE.  Put in the carpet, repaint the rooms in custom colors and buy those stainless steel kitchen appliances.  Then sit back and enjoy.

Or let’s say the home is pretty darn nice but the yard isn’t.  It’s been neglected, never had any landscaping or fencing for the kids and the dog, and the deck needs to be removed and rebuilt.  Let’s plan a new deck ($5000) and let’s get some landscapers out there to put in the perennials, replace sod and add a tree or shrub or two ($3000).  From ugly to lovely.  There’s lots more ideas too but these should get you thinking of the POSSIBILITIES for that lovely $8000 First-Time Homebuyer Tax Credit.

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”.

We cover this pretty thoroughly in our First Time Home Buyer Seminar.  There are several mistakes Home Buyers may make when they decide to purchase their first home. 

Probably the biggest mistake that Home  Buyers make is tackling this complicated purchase without proper education or information.  Buying a home is a lot more risky than buying a car or a boat.  There are a lot more things that can go wrong or be wrong.  Go out and take a class or two.  Work only with real estate professionals who have been in the business awhile and know how to prevent the biggest mistakes.  Education, information and a great Realtor consultant can save you tens of thousands of dollars on a home purchase.

A second mistake Home Buyers  make  is not knowing how much house they  can afford.  Before you even think of starting to shop for a home, you should meet with a mortgage consultant.  Work with a reputable mortgage broker and someone who has been in the business at least 5 years and offers VA, FHA and conventional mortgages.  Let them tell you if you are ready to buy and how much house you can afford.  And then listen to them and don’t overbuy and make yourself “house poor”.

A third mistake is not using a home inspector to carefully review and check the house on your behalf.  Once you have found the home you want to buy, pay the dollars necessary to hire the best homebuyer inspector in the business.  One good inspector can save you thousands of dollars and hundreds of hours in repairs and replacement costs.  You can use their report to negotiate seller paid replacements and repairs.  Read all the documents you can get on that home including the Seller’s Disclosure and the required city inspections.  After you have paid for the home, if you find something wrong with it, it will be MUCH HARDER to get it repaired at the seller’s cost.

A fourth mistake Home Buyers make is not realizing how credit mistakes can affect their ability to qualify for a mortgage.  If your credit is shaky, especially in the current tight credit environment, you may not qualify for a home loan.  Meet with a mortgage consultant to find out where you stand and take the steps necessary to improve your credit rating.  You’ll have to do this sooner or later, if you really want to buy a home.  DO IT SOONER.

Can you see a theme in these four mistakes?  They all have to do with choosing ignorance over education.  An educated buyer is a happy buyer, one who is walking into a home purchase with their eyes wide open.  And a successful home buyer too!!

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”.