Home Buying Tips

admin — Wed, 02 Sep 2009 17:14:53 +0000

1) Start With Your Credit

If you’re in the market for a home, the first thing you need to do is assess your credit. Do you know what your FICO score is and how it affects the interest rates you get? It’s best if you can start with a house buying plan about 3 years out from when you actually intent to buy the house because this gives you more time to improve your credit. Credit repair is unfortunately a slow process but it’s worth putting in the effort because people with the best credit get the best loans. This doesn’t mean you won’t be eligible for a bad credit mortgage but it’s better to plan ahead.

2) Only Buy As Much House As You Can Afford

When people start looking at houses, they automatically look to buy their “dream” house. A better course of action is to get pre-approved for a loan and then only look at houses in your price range. Don’t even get tempted to look at houses outside your budget as then your expectations will start to rise and you’ll start to justify a more expensive home. Buying your “dream” home can quickly become a nightmare when you are house poor. House poor is a term that refers to people who spend too much on their homes and now have no extra money for emergencies, long term savings, or daily living expenses.

3) Don’t Buy Unless You Are Going To Live In The House For 5 Years Or More

This is especially good advice to follow in this current uncertain economic market. If you are unsure if you will able to live in the house you are buying for the next 5 years, then it is probably better to rent. When you factor in all the expenses of home ownership such as closing costs, moving expenses and basic home improvements, then renting is usually more cost effective in the short term. With the problems we’re currently facing in the US job markets; it may also be a good idea to remain flexible about relocating to pursue better employment opportunities.

4) Consider The School District

A lot of home buyers fail to consider the school district they’re buying in but it is a major factor in determining home values in an area. If two exact homes are for sale at the same price, you can bet the one in the better school district will sell first.

5) Get a Home Inspection Done

In most cases, an appraisal will be done by the bank so they know that the loan they’re giving is a good investment but you need to get a home inspection done as well. A home inspection should be done by a qualified inspector that the buyer hires himself. The inspector will examine the house and tell you what sort of problems you could have in the future, such as needing to replace a roof, possible basement flooding, or wall mold. It may cost you a few hundred dollars to get the house inspected, but it is one area where you don’t want to cut corners. In addition, you can try to get the inspection rebated by the seller or make the purchase agreement contingent on a positive home inspection.

Is Your House Losing Value

admin — Wed, 02 Sep 2009 17:01:37 +0000

A recent report by the Deutsche Bank predicts that by early 2011 almost half of all home owners will be upside down on their home loan. This simply means that they have a mortgage that is for more than the current value of the home. This equates to approximately 25,000,000 million home owners who will have lost value in probably their most expensive asset. For many people, it’s too late to sell their home because they’re already upside down and the most troubled housing markets are already glutted with foreclosed homes. If you are fortunate enough to live in an area that hasn’t been plagued by foreclosures and want to know what the future holds for your homes value, there are a couple indicators to tell which way the housing market is heading.

These troubling signs indicate a falling housing market:

Foreclosures

If your neighborhood is plagued by foreclosures this is a very bad sign. When one house on a block goes into foreclosure, your homes value goes down 1% and each additional home that goes into foreclosure sends house values down even further, then it becomes a whirlpool of decline with each successive house in foreclosure causing house values to drop in a vicious circle. The housing market is still in serious trouble with more trouble predicted for the future as housing values continue to drop, more people become upside down in their mortgages, more mortgages are due to adjust and still thousands of people are unable to find work.

Homes Aren’t Selling

Traditionally, homes should sell in three months or less. If you see homes going unsold for long periods of time, it means that sellers probably don’t want to lower their price. This may be because they’re losing all their equity or if house prices have dropped really low, then the sale price may not even cover what they paid for their mortgage. Homes not selling equals a declining market.

Increasing Unemployment

It’s no surprise that the cities and states being hit hard by unemployment are also experiencing some of the greatest declines in home values. Unemployment means more foreclosures and it also means people are forced to move in order to find work. There is almost a direct correlation between unemployment and declining home values, if you see unemployment on the rise in your area, bet that the housing market is on the way down.

Neighborhood Blight

If you are noticing more and more houses in your neighborhood are beginning to show wear and tear and not being properly maintained, then this will bring down the value of all houses in the surrounding area. Unfortunately this is a symptom of chronic unemployment as people can no longer afford to maintain their houses or it may be that they realize their house is no longer worth investing in because it has already lost too much in value. If you notice houses in your area where the grass isn’t mowed, the houses aren’t painted regularly, and the landscaping isn’t maintained then brace yourself for falling home prices. The condition of your neighbor’s house directly affects the value of your own home.

Fast Bad Credit Mortgage Loans » buying a home with bad credit

Home Buying Tips

Is Your House Losing Value

Foreclosures

Homes Aren’t Selling

Increasing Unemployment

Neighborhood Blight