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 of the building rather than an internal 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 are responsible to 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”.

However, on a less positive note, most of the zero down mortgages have disappeared from the landscape and they won’t be back for a long time.  You can probably purchase a home today with the equivalent of zero down but note that word “equivalent”.  If you qualify for some of the city, state or federally sponsored first time home buyers programs, you will collect cash either before or after closing on your new home.  In the case of the federal tax credit, you still need the cash to close to collect the credit.

If you have family or friends who are willing to help you out by gifting you money for your down payment, that could help you through the rough patch.  You could accept the “gift” and then make a promise to repay when your tax credit refund arrived.  Be sure to work with a talented and ethical mortgage consultant when purchasing a home.  These folks can track down every dollar to which you are entitled and make creative suggestions for how to bridge gaps that may arise.

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”.

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”.

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”. ]]> http://www.howtobuyahomemn.com/homeinfo/2009/12/when-is-the-best-time-to-shop-for-my-new-home/feed/ 0 http://www.howtobuyahomemn.com/homeinfo/2009/09/when-is-the-best-time-to-shop-for-my-first-home-2/ http://www.howtobuyahomemn.com/homeinfo/2009/09/when-is-the-best-time-to-shop-for-my-first-home-2/#comments Fri, 18 Sep 2009 19:24:13 +0000 Dawn http://www.howtobuyahomemn.com/homeinfo/?p=186 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 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”.

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”.

When we revised our First Time Home Buyer Class a couple of years ago, I went out and met with six different parties that had come to our class in the past.  I wanted to find out why they came to the class, rather than just gathering information on the WEB.  Everyone agreed that the internet was confusing.  All six parties HAD been on the web at some point in preparing to buy a home.   There was a lot of information, it was true, but some of the information was contradictory.  Some of the information was hard to understand and too complicated.  Some of the information was written in highly technical terms.  There was no way to ask questions and get immediate answers.  The consensus was that the internet wasn’t very user friendly.

These are the folks that then decided a class might be more what they were looking for and signed up for our seminar.  They all agreed that sitting face to face with someone and getting answers on the spot from knowledgeable teachers was far superior to reading information on-line.

The internet can be very useful.  We hope this blog is useful.  But it can be confusing, complicated, contradictory and too slow in answering questions.  If you need answers NOW and if you find the information you’ve been reading is hard to interpret, sign up for a class.  You’ll be glad you did!!

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 tax credit is 10% of the purchase price of the home or $8000, whichever is less.  This credit not only reduces your tax liability for the year in which it is used but also serves as a real credit.  That is, if you don’t pay enough taxes to use the full $8000, the government will mail you a check for the difference.  You could claim the credit this year, even if you have already filed your income tax return by using the new form, Form 9465, to request the credit.

So what are you waiting for?  Home prices have dropped the most they have ever dropped in recorded real estate history, mortgage interest rates are at record lows of 5% and you can get paid $8000 by your government when you buy your first home.  Is this a great deal or what?

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 have special homebuyer advice and ideas that you can tap into immediately. We cover an array of topics, including credit scores, mortgages, finding the right home, and much more! We also follow up with our students, sending you ongoing information after the class so that you’re in the loop for current home buying news and events. Visit our Signup page and signup for your free class today!

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”.