New Home Buyer? 5 Mistakes to Avoid

Buying a house is a huge financial step, and is one you need to take with careful consideration. It’s the quintessential American dream, but can quickly turn into a nightmare if you don’t do your due diligence. Typically, it’s new home buyers that tend to experience the worst nightmares because they simply overlook the fine print.

Understanding the mistakes that can be made during the buying process can help you build financial security without getting sunk into a money pit.

Here are 5 common mistakes new home buyers make that you should be aware of and avoid.

1. Skipping the Mortgage Pre-Approval

One of the first mistakes newbie home buyers do is fail to get pre-approved for a mortgage. First of all, getting pre-approved will give you a ballpark figure of what you can comfortably afford. There’s no sense in pounding the pavement in search of your dream home if you can’t afford the one you decide to buy. You’d be unpleasantly surprised to put an offer in on a house, only to be turned down by the bank because your finances won’t cover the costs of the home.

Not only that, but consider the seller’s point of view in the whole scenario. Let’s say the seller’s got a few bids on the property, and is in a position to sift through and compare them all. How will your offer stack up? If you tell the seller that you’ve been pre-approved for a mortgage, you might be a safer bet. If you don’t, you might be a risky bidder. Some sellers might even refuse to consider your offer at all unless you’ve got a pre-approval document from your lender. Even if the seller picks your offer, you might not be able to get as much financing as you would have hoped when you actually go through the loan application process.

At the end of the day, a pre-approval will paint you in a better picture to a seller. During this process, your lender will verify your finances and credit to see how much the bank is willing to loan you.

2. Foregoing the Home Inspection

When you’re putting up a lot of money to buy a house, you can’t just rely 100% on what the sellers and their realtor tell you about the home. Sure, they’re liable for providing you with a disclosure of everything they know that might be wrong, but even the sellers themselves might be in the dark about problems that are lurking behind the walls.

For this reason, you absolutely need to get the home inspected before you close the deal. If you skip this important step, you leave yourself vulnerable to being stuck with a home with foundation problems, mold, plumbing issues, asbestos, and hoards of other potential issues. As much as you might be attracted to the home, it could turn into a liability when everything is said and done.

Make sure that your offer is conditional upon a home inspection being conducted and passed. Make sure that you agree on what will be checked, which can (and should) include the foundation and structure, plumbing, electrical, heating and air conditioning, and mold or pest infestation.

You’d be wise to make sure the inspector is licensed and reputable. While the inspector might not necessarily be able to detect every major problem with the home, it’s definitely your first line of defense against getting stuck with a home that will cost you tons of money in repairs.

3. Getting Emotionally Attached to a House

Being in love can be an amazing thing, but it can also be a bad one, especially when your emotions are vested in the wrong thing. If you happen to stumble upon your dream house, you need to use extra caution.

First of all, if you happen to set your eyes on a home that other buyers have on their radar, you may be competing with them. If you find yourself in the middle of a bidding war, you could wind up losing out on the home altogether, or you could be snuffed out by someone else who has more money and all the right criteria that the seller expecting. You’ll be left heartbroken when you don’t walk away with the keys.

On the other hand, you just might be the one to sign on that dotted line of a purchase agreement. There are many times when the house you think is the one for you is actually one you should have walked away from. No matter how many times friends or family warned you about the place, you still might end up going ahead and sinking your teeth into it.

Think about how you’ll feel about the house after the ‘honeymoon’ period has come and gone. You might decide to overlook a property’s quirks now, but there’s a good chance you could suffer buyer’s remorse after the deal is sealed and you’re stuck with a super-small kitchen or no backyard.

When you’re in the market to buy a house, make sure you do your best to keep a cool head during the entire process so you do the thinking and decision-making with your logic instead of your emotions.

4. Not Thinking About Resale Value

You’re in the market to buy a house, not sell, so why would you even think about selling in the future? Simple. You just never know what the future holds, and don’t want to feel like you’re stuck in your home just because you won’t recoup much money after you sell.

You might get a job transfer, marry someone from the opposite end of the country, or simply can’t afford to keep up with your current mortgage payments. Whatever the case may be, you want to be able to ensure that your house can sell for a decent amount that you can then put towards another home.

This isn’t just a place where you live – it’s an investment. You’d be mistaken not to consider the resale value of the property. Consider the preferences of other home buyers. Maybe this means buying a home that has 3 bedrooms, a decent backyard, or a 2-car garage. It also helps to know if there are loud train tracks close by, or if developers plan on improving the neighborhood in the near future, which could boost the property’s value soon after purchasing.

5. Not Using a Real Estate Agent

If you’re serious about buying a home, do yourself a favor and hire an experienced real estate agent. These experts can give you invaluable advice about buying property, and can keep you from making a huge mistake. They can help steer you in the right direction about where to find the right property, and will use their sharp negotiating skills to help get you the best price possible and ensure you never overpay.

Realtors will help you navigate the complicated waters of purchase agreements, and will make sure you’re fully protected before you sign on the dotted line. All the services they provide come without the price – it’s generally the seller that flips the bill for both the seller and buyer agent.

A lot of first-time home buyers think they’re making all the right moves, but they still aren’t familiar with what can be a complex home buying process. Rather than taking a chance, use your better judgement and get acquainted with a real estate agent who can help you migrate through the buying process and avoid some seriously costly mistakes.

How Homeowners Associations Can Affect Your Long-Term Expenses

Every home comes with extra costs, like property taxes, insurance, and maintenance fees. But when you buy into a condominium, townhouse complex, or gated community that’s governed by a homeowners association (HOA), you and other residents are also financially responsible for maintaining the common areas. This additional regular fee is compulsory for all homeowners, and also covers the costs associated with general maintenance, landscaping, and security.

Communities governed by an HOA can be advantageous in that they’re intended to protect the value of properties within the neighborhood and uphold a certain level of integrity. But if you’re not careful, you could wind up having your long-term expenses negatively affected. Of course, if you do the research necessary on the HOA of the community you’re looking into buying, you can do plenty to save yourself a lot of money in the near future.

HOA Basics

What exactly are HOAs all about? Basically, these are organizations in a planned community, condominium, or subdivision that enforces rules for the properties under its authority. The fees that are collected from homeowners are put towards upkeep of common areas like pools, parks, tennis courts and elevators. HOA fees can cost homeowners anywhere from $200 to well over $600 per month, depending on the location and amenities provided. The more well-to-do the building, and the more amenities it has, the higher the HOA fees.

HOAs can also enforce certain restrictions on the properties, which can include anything from the type of landscaping that can be done to the color of the front door. If you want to do anything different than what the rules state, you’ll have to convince the HOA to give you a variance, which is unlikely to happen.

HOA Fees Could Increase if Reserves Are Depleted

Just about every neighborhood will eventually have a lot of expenditures related to maintaining the integrity of the properties. An HOA should have the funds necessary to pay for these items by accumulating reserves. However, there may be times when the scope of the project could require additional money.

Sometimes a reserve fund might not even exist. Special assessments are additional funds needed to work on a project or outstanding debt that wasn’t part of the initial budgeted HOA fee. And if these are needed, this could place an unexpected financial burden on you and the rest of the homeowners in your HOA complex.

If a new roof or a major elevator repair is necessary, and there’s not enough money in the reserve fund, an extra assessment could be charged to homeowners to pay for these expenses, which can cost thousands of dollars.

Buyers Must Understand the Need to Comply With Rules of the HOA When Moving In

The covenants, constrictions, and restrictions that come along with owning an HOA-governed property are initially intended to serve the community. However, many times they can be overly restrictive to some home buyers. There are plenty of limitations that could infringe on a person’s lifestyle, such as those that dictate the type of improvements you can make on your home and even whether or not you are allowed to own any pets.

While these might sound outright prohibitive, these rules are meant to protect the values of properties for individual homeowners in the neighborhood and create a nice community environment. Before you buy a home that’s subject to HOA rules and costs, you’d be well advised to find out exactly what you’re in for.

Pay special attention to the fines for not complying with these rules: certain HOAs can put you into foreclosure as a result of non-payment of accrued fines from violation of covenants, conditions, and restrictions. If you think the rules are far too restrictive for your taste, consider buying elsewhere.

Look Into How the HOA is Governed and its Financial Health

Every individual HOA will govern its communities in a different way. While it’s common for the association to be made up of building residents who’s positions are voluntary in nature, it’s also common for other complexes to hire on-site managers. No matter how the HOA is governed, it’s important to research how well the HOA is run, and what the health of the complex you may be looking into is like.

A real estate agent experienced in HOAs will be able to educate you on the terms of the HOA and compare fees for the complex you’re considering. Appropriate monthly HOA fees should comfortably cover regular monthly operating costs, as well as contribute to a reserve fund. If there’s not enough in these reserve funds, you could be facing much higher fees in the future if a major repair needs to take place.

An excellent real estate agent with plenty of experience will be able to arm you with all of the info you need to make the right decision. While there could be detriments to your finances as a result of a bad HOA, owning an HOA-governed home definitely can have its perks. Making sure that it makes sense financially and fits your specific lifestyle is critical. If you’re working with a Realtor, making the best decision will be a cinch.

Use ‘Smart’ Technology to Control Your Home – Even When You’re Not There

You’d have to be living under a rock not to have noticed how much technology has taken over every aspect of our lives. But technology isn’t just about waiting for the next generation of smart phones and tablets to come out: it can also play a key role in helping you save energy in your home, and ultimately save you money.

Consider adding these ‘smart’ features to your home to make it as energy-efficient as possible, with minimal effort.

Programmable Thermostats

With manual thermostats, you have to physically set the thermostat every time you want to adjust the temperature. While this can work when you’re around, what about when you’re not? What happens when you turn the temperature up before going to bed, but then forget to turn it down before heading off to work?

By installing a programmable thermostat, it’ll be a lot easier to control your heating system, even when you’re not home. These smart devices work automatically: set it once, and it’ll continue to change the temperature according to your settings.

Set it to turn down the heat before bed, then back up in the morning so it’s comfortable when you get up to get ready for work. You can then set it to turn down after you head out, then turn back up just before you get home so you walk into a comfortable home. There’s no sense in heating an empty home – this just wastes energy and your hard-earned cash.

Remote-Controlled Window Shades

Window shade control is another great way to control the temperature in your home, saving you both energy and money. Windows tend to be one of the weakest links in a home when it comes to energy loss.

With remote-controlled blinds, you can control them depending on the time, the sun’s strength and even its position. Android- and iOS-controlled blinds are also available, allowing you to raise and lower them from your mobile phone when you aren’t even home. No matter where you are, you can easily manage your home’s heat and light by adjusting your window shades.

Lighting Control 

How many times have you forgotten to turn off a light somewhere in the house, only to realize it’s been on all day or all night, wasting precious energy? Forgetting to flick one simple switch can wreak havoc on your energy bill.

Nowadays, “smart lighting” options are available to homeowners, allowing you to control your lighting from a mobile device or computer. Even dimming your lights can drastically cut down on energy loss. At the touch of a button, you can create ambience while saving energy at the same time by turning on specific lights and dimming them to the desired level.

Centrally Control Your Home’s Energy

You can literally put your home into hibernate mode with some of the technological systems that are available today. Pressing one little button can put your house to sleep, and cut off power to all those energy-sucking gadgets that we tend to forget about.

From computers, to DVD players, to appliances, you can put any power-draining objects on standby. You can even turn off any unused electrical sockets in your home to make it safer for children, then turn them on only when you need them again.

Fiber-Optic Internet Technology

When it comes to energy efficiency, fiber-optic technology is a ‘green’ alternative to typical coaxial copper wires that are used for computers and internet hook-up. It lasts longer, and is even safer to the touch because these cables generate less heat.

Considering the increase in number of smart gadgets in use at the same time in your home, you may have noticed a significant drain on your broadband internet connection. Fiber-optic technology offers faster internet speeds, which means you can have more smart devices in your home working simultaneously with no effect on your online experience.

Technology just keeps getting smarter and smarter. Considering how much more convenient it can be to control many aspects of your home’s energy use and how much money you can save on utility bills, it just makes sense to employ at least one of these smart features.

Building Your Home From Scratch Doesn’t Have to Cost a Fortune

Many people quash their dreams of building their own homes simply because they believe they can’t afford to do so. While it’s true that building a custom home can be pricey and generally more expensive than just buying from a builder in a subdivision, there are a bunch of ways that you can shave off a few bucks here and there to make the entire process a lot more affordable.

With some careful planning and considerations, you can get the house you want and still have some cash left over.

A Simple Box Style is Still Attractive

Back in the day, developers built homes that were shaped like simple square boxes. The homes in the early suburbs in the US may have been simple, but they were still sophisticated and visually appealing. They were in proper proportion, and featured detailing that you rarely see today.

These days, developers and designers seem to try too hard in overloading homes with over-the-top exteriors, which cost a lot more money in the design process. Arched windows, complex gables, and extravagant details that cost a lot of money don’t necessarily add to the appeal of the home.

If you keep your home’s form as simple as possible, you can save a lot of money for the architectural work involved. Fancy homes aren’t necessarily better looking; but they’re certainly more expensive to design. Keep it simple, and you can have a great looking house without the crazy price tag.

Make Good Use of Your Building Materials

If you’ve ever been on a construction job site, you’ll probably notice how much wasted material is laying around. Unfortunately, many developers fail to accurately plan exactly how much material is needed for the job, or design a home with a size and shape that isn’t in line with the common sizes of materials.

For example, sheets of drywall tend to be 8 x 4 feet, which works quite well with an 8 x 20 foot wall, but not as good on a wall that’s 9 x 13 feet. In much the same way, lumber for flooring tends to come in 2’ increments, which means there would be a lot of wasted material to accommodate for a 13-foot wide room. To save on wasted material – and money – consider designing your new home according to common modules of building materials.

Go Smaller Scale

Obviously, the cost to build a smaller home will be less than a larger one (unless you equip it with larger-than life technology and finishes). But a smaller home needs to be carefully planned out before you start hammering away.

With smaller space comes the need to create smarter spaces. For example, skip the dining room and just include a slightly larger kitchen, or forego the idea of having both a family room AND living room and just stick with one space. Many uses can be combined to create one area, rather than multiple rooms that usually end up only collecting dust. Carefully pare down on wasted space and put your money towards the rooms you really use and love.

Use Quality Materials

When your budget plays a huge role in how you design your home, you might be automatically inclined to opt for cheaper materials in order to save some cash. But the truth is, cheap roofing, siding, windows, and doors will only cost you more money over the long haul.

While it might seem to be going against the grain when you’re trying to save a buck, spending a bit more money up front for better quality materials will actually save you money in maintenance costs. Do it right the first time and you won’t have to spend money to repair and replace prematurely.

Consider the Resale Value

While you might not have any intentions of selling your home soon after it’s ready to move into, you should still keep its sale-ability in mind. Homes that are well-built, functional, energy efficient, low maintenance, and attractive will sell faster and for more money than their competition. Your real estate agent can give you some pointers about what to include in your new home that buyers look favorably upon.

You could get a handsome ROI by keeping these things in mind while building. You just never know what the future holds, and if you ever find yourself in a position where you’re ready to sell and move on. Making a hefty profit is certainly welcome!

A custom built home doesn’t have to be a money pit. If you’re willing to spend a little time during the planning and design process, and sacrifice a little on space, you can build a new house well within your budget.


3 Unique Ways to Decorate Your Walls

As you’re decorating your house, you may spend an inordinate amount of time choosing furniture and area rugs, as well as painting your walls the latest popular colors. But as you look around your rooms, you’ll undoubtedly notice something’s missing, but you can’t quite put your finger on what that something is.

Whether your walls are empty or you have a house full of pictures, paintings, and mirrors, a little creativity can go a long way toward making your house unique. Here are three ways you can add pizzazz to boring walls.

1. Framed Jigsaw Puzzle

When you think about all of the jigsaw puzzles on the market, you likely can imagine all of the design possibilities. When completed, the right puzzle can make the perfect painting, especially if you slip it into a professional frame. But how do you get a jigsaw puzzle from the table to the wall without it breaking into hundreds of pieces?

Using jigsaw puzzle glue and patience, you can freeze your puzzle in place. You can then slide cardboard on each side of it and transport it to a framing shop to be prepared to go on your wall. If you prefer to frame the puzzle on your own, you should consider dry mounting it to a foam board before framing it. This will reinforce its structural integrity before you hang it.

2. Movie Posters

If you’re a movie fan, you can greatly enhance your décor using movie posters. Vintage movie posters are especially popular throughout the house, adding charm to every room. If you’re creative and choose based on the coloring in the poster rather than the film it represents, you’ll be able to use these posters in any room of your house.

True movie fans may prefer to set aside a room like a bonus room to show off a love for film. In addition to theater seating and a big-screen TV, you can decorate the walls with posters from all of your favorite movies. If you have patience and a little extra money to spend, you can even search sites like eBay for autographed versions of your favorite movie posters.

3. Unique Wall Borders

At one time, homeowners spiced up their homes with wallpaper that showed off their personal tastes. Now that wallpaper is no longer en vogue, most homeowners have turned to paint and wainscoting to add uniqueness to a home’s walls. But even though wallpaper has gone extinct, wall borders are still commonly used, especially in rooms like nurseries, bonus rooms, rec rooms, and dining areas.

When it comes to wall borders, there are many options, many of which are designed to match specific rooms. A wine theme would be perfect for a kitchen or breakfast nook and baby themes are made that will fit a nursery perfectly. You can even find movie borders to go with your cinema theme.

Your home’s walls are among the first things people notice when they enter your house. With a little creativity, you can add charm to your home and make it stand out from the others in the neighborhood, without having to put in hours of work.

Is Now the Right Time to Buy? Yes, and Here’s Why

While certain buying decisions can be made on a whim, others require careful consideration. The decision to buy a home is a big one, and is likely the biggest expenditure you’ll ever make in your entire life.

While there are several factors you need to consider before pouncing on a property, now just might be the perfect time to buy – as long as all your ducks are in a row.

Are Your Finances in Order?

Before you start pounding the pavement in search of your dream home, make sure your finances are in good order first. To be able to qualify for a mortgage, your lender is going to want to see that you’re capable of managing your current bills and debts.

You should pay your bills on time and in full – your lender is going to look for this pattern. Your debt-to-income ratio (the percentage of your monthly gross income that goes towards paying off your current debts) should be no higher than 43% – the lower the better.

Even though there are loan programs available that allow you to put a low down payment towards a home, you should still have a cushion of savings to cover closing costs, moving expenses, and a deposit. Saving money and keeping up with a healthy credit score are critical elements to being a home owner.


What Can You Afford?

According to the National Association of Home Builders, 62.8% of homes were affordable in the last quarter of 2014. This number is based on families earning the median income of $63,900 with good credit, and 30-year fixed mortgage interest rates.

That’s good news, but of course this may not necessarily suit your specific financial standing. Managing a mortgage takes a certain level of commitment, so make sure you’re ready for the financial responsibility before you buy. Don’t forget about about other home expenses on top of your mortgage, such as home insurance, property taxes, utilities, and regular home maintenance costs.

Consider your plans for the future, and how you’ll be spending your money. A mortgage lender will tell you how much money you can borrow to put towards a home purchase, but how much you spend on other things aside from your mortgage is up to you to determine.

Your best bet is to sit down with a financial advisor to work out all the nitty gritty and crunch some serious numbers to help you determine what you can comfortably afford in a home purchase. From there, you can narrow down your choices during your home search.


Mortgage Rates Are Still Near Historic Lows

The rate that your lender offers you plays a huge role in how much you’ll be paying in mortgage payments every month. Obviously, the lower the rate, the less your mortgage payments will be. Rates have been rock bottom for a while now, making this a prime time to lock in.

A 30-year fixed mortgage rate is an ideal option, as it doesn’t put you at risk for any rate fluctuation shocks that may happen in the future. Right now, the 30-year fixed rate is 3.86%, down from 4.23% at the same time last year. The rate for a 15-year fixed rate is currently 3.07%, but a 30-year fixed is a more stable option.

With the current rate trend being the way it is, now is a good time to buy and take advantage of these low rates before they start to rise. Of course, rates could go even lower, but why say “no” to the perfect home in anticipation of this lower rate (which may or may not happen)?

Actually, rates are expected to move higher in the near future. Fannie Mae predicts rates to reach 4.40% by 2016, and Freddie Mac predicts 4.6%. If these predictions are accurate, now sounds like a good time to buy.


Forget About Timing the Market

Don’t waste your time trying to time a real estate transaction. You’re not playing the stock market. When you’re on the prowl for a home purchase, circumstances can change all the time.

Instead, do some homework, get your finances in order, figure out what’s affordable for you, be realistic, and start looking. Don’t buy the a property just because you want to take advantage of low rates or low prices.

Basically, the best time to buy a house is when you can actually afford to do so. Forget about predicting an increase in home values or when mortgage interest rates are set to climb. Unless you have a crystal ball, these figures are nearly impossibly to accurately forecast. If you find the perfect home, and you can comfortably afford it, there’s no reason why you shouldn’t buy it.

Regardless of what type of market it happens to be at the time of your purchase, you can make it happen. Team up with a realtor and mortgage specialist to help you weight your options, and to ensure you’re making an informed and healthy purchasing decision.

Awesome Kitchen Backsplashes That Fit Your Budget

You’ve installed your cabinets, countertops, and appliances in your newly remodeled kitchen. To round things off and add an dash of ‘oomph’ to your kitchen, install a custom DIY backsplash.

When it comes to this area above the countertops, there are a variety of methods and ideas you can employ, all of which are affordable and easy to install. By thinking outside the box, you can create an awesome backsplash that won’t break the bank, and will likely make your kitchen the envy of the block.


Make Your Backsplash Shine

Why not add a touch of gleam and shine to your backsplash by using materials such as glass, acrylic, or even mirrors? Most home improvement stores sell sheets of acrylic, and will cut it to the size you need. You can then mount it by screwing it in at the corners.

Glass and mirrors are also readily available, and can be the perfect material to install in smaller kitchens. Their shine and reflection can amplify the space, and make it look larger than it actually is. Once it’s cut to the right size, you can quickly and easily adhere it to your backsplash using construction glue or cement.


Paint Your Backsplash in the Color of Your Choice

Nothing is easier and more cost-effective than simply using a little paint. But if you think this is too plain or boring, think again. While you could just paint the backsplash in a solid color, you can take things to the next level by adding a little design or texture to the area. Consider using sponges, stencils, tape, and fine paintbrushes to achieve your desired effect.

For instance, you can create a tile effect by adhering painter’s tape to the backsplash in one-inch square-shaped blocks, then painting each section in the color of your choice. Once the paint is dry and the tape has been removed, you’ll end up with the illusion of tile complete with grout lines!

Stainless Steel Isn’t Just For Appliances

There’s a reason why stainless steel has been a wildly popular choice among homeowners: it’s classy, rich-looking, and eye-catching. So why just limit its use on your kitchen appliances? Consider spilling this material over onto your backsplash to create a truly unique, sophisticated, gleaming look.

You can buy sheet metal flashing at your local home improvement store, have it cut to size, then adhere it to your backsplash with construction adhesive. They edges should then be caulked to smooth them out. If you’re feeling a little daring, you might want to even consider other metal sheets, including corrugated metal panels or even copper.


Make Your Backsplash Both Stylish and Functional

A nifty way to achieve a sleek yet functional backsplash is to install a blackboard above the counters. Think about it: how many “lists” do you tend to keep in your kitchen? From your grocery list, to your “to-do” list, to reminder notes for your family, a blackboard backsplash can really come in handy while giving your kitchen a modern and chic look.

Construction adhesive works well to adhere the blackboard after it’s cut to size. You might want to consider applying a finish to it so that it’s protected from moisture. To really add some pizzazz to the blackboard, consider adding some tile or wood trim around the outer edges.


Withstand the Test of Time

While some backsplash trends may come and go, nothing has been able to stay ‘in style’ better than the classic subway tile. It’s sophisticated, clean, elegant and timeless. Subway tile tends to go well with just about any type of countertop and kitchen cabinet. And it’s highly affordable too – you can get these tiles for as little as $2 per square foot. Considering how small this space is, it’ll cost you pennies to complete the project.


Kitchen reno’s can be an expensive undertaking, but they don’t have to be. Adding some simple touches, like a custom-made backsplash, can be just the thing your kitchen needs to make it stand out. With a little creativity and elbow grease, you can create a killer backsplash at a price point you’ll love.

How Can You Tell if This is the Right Neighborhood For You?

Location, location, location. It’s the crux of real estate. But when it comes to buying a home in a new neighborhood, there are other factors to consider in addition to the location itself.

If you’re planning on sticking around your new neighborhood for the long haul, or want to raise a family in a good area, you’d be well-advised to do some homework and research on the community you’re contemplating. A bunch of factors go into figuring out of the desirability of a specific house and the community it’s in.

So how do you know if the neighborhood you’re looking at is right for you?


Ownership Rates Are High

Neighborhoods that have a much higher proportion of owners compared to renters are considered much more stable. Of course, there are exceptions to this rule, such as the high percentage of renters in downtown New York City or San Francisco. But for the most part, if the neighborhood you’re looking at features more owners than renters, it’s a good sign of a stable area.

Not only that, but owners tend to take better care of their properties. After all, they own them, and obviously have a much higher vested interest in the properties. Your realtor will be able to provide you with these types of stats for areas you’re looking at.

Properties That Retain Their Market Value

Certain neighborhoods hold home value better than others, which was evident during the most recent housing crash. Areas where property values remained relatively stable during these trying economic times are more likely the types of areas you want to call home.


Even if you plan on living there forever and have no intention of selling for a profit, it’s still nice to be able to build equity in your home from appreciation alone. You can find information like this from historical sale prices from your county’s tax records office, or else your realtor will be able to provide you with such important info.

It’s a Decent Commute to Work

Houses that are situated nearby major city centers and big employers are in high demand. Especially these days, younger professionals are a lot less likely to want to drive far to work compared to previous generations. The closer the neighborhood is to these business hubs, the better.

Neighborhood Schools Are Rated High

If you have kids, you want to make sure the school within your district is a good one with a healthy reputation. The local school district is typically an important factor to consider when purchasing a house.

Even if you don’t have kids, schools make a big difference for many buyers, who will be more likely to pay more to get into the best school district. This will be a vital factor if you plan on selling some time in the future.


Public Transit is Readily Available

If you can easily and quickly get to a bus stop or subway line, thats good news. Properties with easy access to public transit are generally more valuable compared to those that are not. Among the many factors that are considered when determining a property’s value, proximity of public transit is one of them.

In fact, properties within half a mile of high-frequency public transit routes and stops are worth an average of 42% more. But don’t pick a home that’s too close to these routes – homes that are beside train tracks can actually lose value instead. No one wants to live beside noisy trains or buses.

Home and Neighborhood Improvements Are Noticeable

If you see homes being renovated or even rebuilt, that’s a good sign of a healthy neighborhood. Home owners that are investing a lot of time and money into their properties show that they value their neighborhood, and so should you. And if the city is pouring in money into improvements – such as new sidewalks, trees, etc – that’s also a good sign of a neighborhood that’s nowhere near close to heading south in value.

Your home is purchase is a big one, so you want to make sure you do your due diligence and scope out the area you plan on buying in before you fork over the big bucks. There are tons of signs that the neighborhood is perfect for you to plant some roots. To take things a step further, tap into the experience and knowledge of your real estate agent to find out if the community you’re considering moving into is the right one.

Don’t Have Liquid Cash For a Down Payment? You Can Still Buy Your Dream House!

When it comes to buying a house, coming up with a big chunk of cash in the form of a down payment is typically the biggest obstacle.

Buyers will usually be advised to put a down payment of 20% on a home because mortgage insurance will need to be tacked onto a mortgage if it’s any less. Financial planners will also suggest putting at least this much in the form of a down payment in order to decrease the amount of the loan, and therefore pay less in interest towards the outstanding principle.

Unfortunately, many home buyer hopefuls simply don’t have that kind of money stashed in their banks accounts. Many of them end up being eternal renters as a result.

But believe it or not, you can change your status from ‘renter’ to ’home owner’ even if you don’t have that much liquid cash for a down payment. In fact, it’s even possible to buy a home with zero down payment, as long as you qualify.

There are some programs out there that allow buyers with good credit and a regular income to buy a house with a low a down payment – or none at all.


Low Down-Payment Loan Options

If you can scrounge up a little bit of cash for a down payment, you may be able to tap into these options:

The Federal Housing Administration (FHA) – Loans insured by the FHA are available to most borrowers. With this loan option, a minimum 3.5% down payment is needed. About 15% of all home buyers use FHA loans in order to purchase a home without a big down payment. The FHA charges borrowers a premium of 1.75% of the mortgage amount up front. For loans with the minimum down payment amount, an annual premium of 1.25% of the mortgage amount will be charged.


Private mortgage insurance – There are many companies out there that offer private mortgage insurance to borrowers who can’t front the 20% down payment. While these types of loans require a down payment slightly higher that what the FHA requires, buyers who can come up with a 5% down payment will usually benefit from lower monthly mortgage payments compared to equivalent loans backed by the FHA.


No Down Payment Options

If you just can’t come up with any money at all for a down payment, there are still options available to you:

VA loan – Veterans Affairs guarantees qualified veterans and their spouses with no-down purchase mortgages of they are unable to come up with the cash. Private lenders give out the loans that the VA guarantees. Although the borrower is required to pay a funding fee, there is no mortgage insurance.

This VA funding fee will vary depending on how the veteran served time: in the regular military, in the Reserves, or National Guard. The fee will also depend on whether it’s the veteran’s first or subsequent VA loan. Usually the fee ranges from 2.15% up to 3.3%.


Navy Federal loan – The Navy Federal Credit Union offers 100% financing to members who qualify for buying their primary homes. Those who are eligible include members of the military, certain civilian employees of the military and US Department of Defense, and family members. The credit union’s zero down payment program is somewhat like the VA’s, expect for one major difference: the cost. The funding fee associated with the Navy Federal is 1.75%, which is much less than the VA’s funding fees.

Department of Agriculture’s Rural Development – This mortgage guarantee program has become increasingly popular, and is not just confined to farmland, despite what many people may think. As long as buyers meet credit and income requirements, and are able to afford payments on the loan, eligibility can be met for this mortgage guarantee program. In addition, the property being bought needs to be located within an area that’s designated as eligible for such loans.

Just because you don’t have 20% to put towards a down payment – or 5%, or anything at all for that matter – buying a home isn’t necessarily off the table. Use a little investigative skills to find out what’s available for someone in your financial predicament. To make the search a lot faster and easier, discuss your options with an experienced mortgage specialist.

6 House Hunting Misconceptions to Stop Believing

A home purchase is most likely the biggest you’ll ever make, so you want to make sure you make the right decision. But mention your intentions of buying to anyone around you, and you’ll probably get an influx of opinions – whether they’re right or wrong.

So what’s true and what isn’t? Here are some home buying misconceptions you shouldn’t fall for.

1. You Need a 20% Down Payment

Of course, the more money you put down on a home, the better. Less mortgage principle equals less interest payments over the long run. Unfortunately, putting 20% down is unrealistic for a lot of home buyers.

But all is not lost. You can still get away with a small down payment by contributing to PMI (private mortgage insurance) until there’s enough equity in the home to have this fee waived. You can get an FHA loan with as little as 3.5% down if you and the home qualify. Some lenders have even started offering borrowers “piggy-back” loans where a second loan (at a higher interest rate) is approved to cover a portion of the down payment. In this case, borrowers need to have good credit and a low debt-to-income ratio to qualify.


2. A Longer Amortization at a Fixed Rate is Ideal

This might be true over the long haul if you plan on sticking around in your home for at least 30 years. But if you’re planning on relocating sometime in the near future, getting stuck in a fixed rate for a long time will likely involve a higher interest rate. In this case, you could be paying more towards interest for nothing. Instead, look into 5/1 or 7/1 ARM (adjustable rate mortgage) loans, which translate into lower monthly payments over the duration that you own the home.

3. Never Offer the Asking Price Right Off the Bat

It depends on the market, and on the house itself. If the home is priced properly, then there’s no reason not to offer full asking price. If you low-ball the seller, you could potentially insult them and scare them out of a deal. On the other hand, you might think that you’re overpaying if you offer the asking price. Real estate negotiations really are emotional and psychological battle fields.

There’s no reason not to offer full price if the home is worth that amount. Odds are that if it’s priced right, it’s sell sooner rather than later at or around that price point. You could be missing out on your dream house if you let this myth cloud your judgement.

4. Spring is the Best Time to Buy

A popular misconception is that the spring season is the ripe time to pluck a home off the market. But along with all the listings that come out in the spring come a herd of buyers, meaning stiff competition and even bidding wars. The reality is that properties are bought and sold throughout the calendar year. In fact, you’ll probably find that sellers are more motivated during slower months, meaning you just might get a great deal on the house you have your eye on.

If possible, take your time looking, and don’t assume that you missed your chance just because July rolled around before you found the perfect place.

5. Always Go With the Lender Offering the Lowest Rate

The lowest interest rate is definitely going to be highly attractive, but don’t let this be the only factor that you look at before settling on a lender. While cost is always a factor, the difference in fees might just matter even more.

In the midst of a competitive buying market, how reliable your lender is can mean the difference between getting that dream home and losing in a bidding war because the lender has a shady reputation. As a buyer, you also want a lender who will work well with your real estate agent to make the process a smooth one. Finally, the terms and conditions should be convenient for your financial capabilities.

6. Don’t Buy the First House You See

People are naturally a little weary of commitment. While it’s more common to look at a bunch of homes before finding the perfect one, what if ‘The One’ is the first place you see? You’ve probably had your eye in the market for a while now anyway. If you happen to stumble on a home that meets all of your criteria, the fact that it’s the first place you’ve visited shouldn’t stand in your way of putting in an offer.


Regardless if these misconceptions lead you to spend too much or settle on the wrong property, these can really cost you if you’re not careful. Fortunately, you can avoid these mistakes by teaming up with a skilled and experienced real estate agent who can guide you down the right path to making the right decision.