Yes, you can buy a home with an unrelated adult partner.  Both purchasers will have to qualify for the mortgage unless it is your intent to buy the home on your own, and rent out a portion to the roommate.  If you are going to be a landlord rather than a co-purchaser, you probably will not be able to use the rent you would collect to help you qualify for the mortgage. 

If you are buying the home with someone else, you will want to discuss the following issues with your home ownership partner:

How much is each purchaser contributing to the down payment and closing costs?

How much will each purchaser contribute to monthly house payments and other house related bills such as gas, electricity, water and sewer and so on?

What happens if one of the purchasers doesn’t live up to their bargain?

If one purchaser wants to move and sell, what will be the rules for escaping the mortgage obligation?

When the home is sold, if there is profit on the sale, how will it be split?

It is always a good idea to consult with a real estate attorney when buying a home with an unrelated adult partner.  The attorney can help the two of you put together a legal agreement to cover these and other issues which could come up.  If you plan in advance to cover all options, you both will be protected if your relationship changes in the future.

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 get asked this question a lot in our First-Time Homebuyer Classes.  Remember, before the tax credit which started in April, 2008, people bought homes for the first time.  I’m sure that after the tax credit expired in April of 2010, people will still buy homes for the first time.  Owning rather than renting is still a good idea. 

Is this still a good time to buy a first home?  Yes, yes, yes.  This is the lowest home prices have been in last 8 years.  There are still a large number of foreclosed homes coming on the market.  While I feel sympathetic to those homeowners who have lost their homes to foreclosure, these foreclosed homes present a remarkable value to the first-time buyer.  Many are discounted in price 30-50% from their original purchase price.  And the banks that own the homes give a rapid response to your offer. 

It’s still up to you to save a down payment, in most cases 3.5% of the purchase price.  If necessary, you should also work on a good credit rating which will help keep your mortgage interest rate affordable.  But don’t miss out on one of the best buyer markets in a decade.

For more answers to your detailed questions, sign up and attend one of our FREE HOMEBUYER CLASSES!!

Many Home Buyers are surprised to learn that in addition to a down payment, they may need to pay other fees at closing, commonly referred to as “closing costs”.  The amount of these fees will vary from mortgage company to mortgage company.  A good estimate is about 3-3.5% of the purchase price of the home.  

When you are buying your first home, it may be hard for you to come up with enough money for both a down payment and closing costs.  Many first time Home Buyers ask for closing cost assistance from the Seller.  Most mortgage programs will permit the Sellers to help the Buyer pay for their closing costs.  All you need is the Seller’s consent.  Your Realtor will ask the Seller for this assistance when they write up the contract on your new home.  Asking the seller for closing cost help is very commonly done, especially when buying your first 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 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.

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.

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”.

Many Home Buyers are surprised to learn that in addition to a down payment, they may need to pay other fees at closing, commonly referred to as “closing costs”.  The amount of these fees will vary from mortgage company to mortgage company.  A good estimate is about 3-3.5% of the purchase price of the home.  

When you are buying your first home, it may be hard for you to come up with enough money for both a down payment and closing costs.  Many first time Home Buyers ask for closing cost assistance from the Seller.  Most mortgage programs will permit the Sellers to help the Buyer pay for their closing costs.  All you need is the Seller’s consent.  Your Realtor will ask the Seller for this assistance when they write up the contract on your new home.  Asking the seller for closing cost help is very commonly done, especially when buying your first 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 bought or are buying your first home between January 1, 2008 and June 30, 2010, you will qualify for a refundable credit from the IRS.  There are two types of tax credit.  The non-refundable credits reduce your tax but only can reduce your tax to zero.  Refundable credits mean that once your tax is at zero, the rest of the credit will be mailed to you as a check.

For example, let’s say your taxes are $5000 this year and you have already paid $4500 towards those taxes in withholding from your paychecks.  So you would owe $500 to the IRS.  However, you bought your first home this year (2009) so when you file your taxes in 2010 for 2009, you claim the first time homebuyer credit.  The IRS would send you a refund check for $7500.  They would take $500 from the credit to pay the balance of the taxes you owed to them.  The rest would be refunded to you.

Now there are some differences in the tax credits available for first-time homebuyers.   If you bought between January 1, 2008 and December 31, 2008, the credit is $7500 and must be repaid over 15 years starting the second year after receiving the credit at $500 per year.  If you bought between January 1, 2009 and June 30, 2010, the credit is $8000 and doesn’t have to be repaid if you live in that home you bought for 3 or more years.  If you bought between January 1, 2009 and November 6, 2009, the credit is $8000 and you can e-file to claim the credit.  If you bought your first home after November 7, 2009 but before June 30, 2010, you cannot e-file your return to claim the $8000 credit as the IRS now requires you to attach proof of home purchase to your return.

If you have filed taxes for 2008 but bought your first home after you filed, you can file an amended return this year to claim the credit.  You don’t have to wait to file your tax return for 2009.  This is a great benefit for first time buyers, defined by the IRS as folks who haven’t owned a home for the three years prior to closing on their new home.  Good luck in buying that first great home!!