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Posts Tagged ‘buying’
Afraid to Buy? Don’t Be!
Despite tax incentives, first time home buyer assistance, and low interest rates, it’s easy to understand why you might be afraid to buy a home right now. The market is still fairly unstable, and house values are still falling in some areas.
Buying a home is always risky, but it’s a risk that very commonly pays off. Real estate works in cycles—some years, the prices are up, during others the prices are down. It can be hard, not to mention frustrating, to try guessing what the next year or two will be like. Remember that buying a home is a long term investment. There might be a short term loss, but housing prices will go back up, and the home you buy this year will probably be worth more than you paid for it a few years from now.
Still, there are several fears that many first time, and second and third time, homebuyers face when considering purchasing a home, and they are all very valid. Let’s take a look at some of the most common fears, and see why you don’t really have to worry.
Fear 1: I might lose my job.
This is one of the biggest fears of potential homebuyers, and, in today’s economy, it is certainly valid. One of the best ways to alleviate this worry is to have a rainy-day fund in place before buying a home. Have enough money set aside to cover at least three month’s of mortgage payments while you look for a new position. And, while this is not a guarantee, and certainly no reason to be lax about payments, most lenders will not start foreclosure proceedings until you are two or three months behind. For those who are currently renting, this means that staying in a home after a job loss will be easier than staying in an apartment.
Fear 2: I won’t be able to afford my mortgage payments.
The easiest way to avoid this problem is to not buy a home that you can’t afford. Consider the amount of your payments, after taxes, interest, and any other applicable fees are added in. This amount should not equal more than 1/3 of your total monthly income. If you can get that amount down to ¼ of your take home income, that’s even better.
When you start looking for a mortgage, keep this number in mind. If you bring home $4000 a month, try to keep your mortgage payments around $1000, or less. Don’t take accept a mortgage with monthly payments over this amount. Also, make sure you have that rainy day fund saved, outside of what you used for a down payment. Having a cushion for tough times will make you feel more secure.
Fear 3: I’ll lose money.
This, unfortunately, is a risk common to any type of investment. The home you buy today for $150,000 might have sold for less three months from now, or may now be worth less after you’ve bought it. Unfortunately, it is hard to know when real estate values have hit bottom until after it has passed. If you wait too long to buy a home, you could very easily end up losing even more money, by paying considerably more for the home you by a year or two from now.
Buying a home is a long term investment. Even a short term dip in value doesn’t mean much, unless you are planning on selling. The market has dips and rises, but the overall trend is that home values do, eventually, go up. The average price for a new home in 1980 was $72,400. Today, that same home would cost $274,330. There are not many investments that go up $200,000 in value over 30 years.
There are definitely things to worry about when buying a home, but don’t let those worries automatically stop you from buying. Learn a little bit more about those fears, and see how you can alleviate them. Interest rates just hit a record low, averaging right around 5%. In the central NY area, some lenders are offering even lower rates. There will probably not be a better time to buy within the next 20 years.
So, what are you waiting for?
Views: 35Movers or Do it Yourself?
Buying or selling a home usually means one thing: time to pull out boxes and start packing.
For some, packing for a move is a great opportunity to look through the memories and treasures they have gathered throughout the year. For the rest of us, it is a stressful task that we would just as soon get over as soon as possible. Finding boxes, wrapping breakables correctly, and then carting everything to your new home can be stressful, especially if you’re already busy with work and family responsibilities.
The alternative, of course, is to hire a moving company to pack and move for you. Although this is the more expensive option, it can save a lot of time, which is why most people choose to hire a moving company. However, they can be expensive, and it is sometimes easier to move on your own.
So, should you hire a professional, or do it yourself? It depends on a few factors:
1. How Much Stuff Do You Have to Move?
If you are moving from a small apartment into your first home, and you don’t have a lot to move, it’s probably going to be easier to pack on your own, and then ask some friends to help you. If your family is moving, including children and all of their things, it is probably better to hire a mover, unless you have a lot of extra time and patience. This is especially true if you have a lot of heavy, bulk, or difficult to move items, such as furniture.
2. How Far Are You Moving?
Are you just going across town, or are you going across the country? A short move, even if you do have a lot of stuff, can probably be done with the help of family and friends, if you don’t mind making a lot of trips. However, if you are moving a long distance, even more than 30 miles away, it is probably smarter to hire a moving company, or at least rent a moving truck. Being able to move everything in one load will be much easier, and won’t take as much gas.
3. How Much Time Do You Have?
If your time is at a premium, consider hiring a moving company. Professional movers can do the job with very little input from you while you continue on with your busy day. While you will need to be home while the movers do their initial estimate and while they are packing, you won’t be spending the weeks leading up to the move trying to do all of the packing yourself.
4. How Comfortable Are You With Someone Packing and Moving Your Belongings?
The chance of something getting broken by a mover is small, but it is still a possibility and one that should be considered. Even if you hire someone to do the packing and moving for you, you should still take the time to package any irreplaceable belongings yourself, and drive them to the new home in your own vehicle. Many moving companies ask you to pack any jewelry, antiques, or other valuable items yourself, to avoid something being broken accidently.
You should also consider how comfortable you are with someone going through all of your belongings as they pack. Some people are comfortable with this, but many aren’t. Instead of hiring movers to pack everything, pack all of your personal items, such as clothing, yourself, and let the movers handle things like dishes, books, and bedding.
5. How Much Help Can You Get?
If you live in a town surrounded by family and friends that can help out during a move, you may not need to hire a mover. This is especially true if you have friends with pick-up trucks. Spending a day moving as a team may even be fun. However, for those who do not have anyone nearby that can help, hiring a moving company might be the only way to move.
Hiring a moving company is a great idea, if you can afford it and can use the extra help. But don’t discount the benefits of moving yourself, especially if you can get help for free. Renting a moving truck might be all that you need to get everything moved.
Have you hired movers in the past? Were they worth the expense?
Views: 100Lease to Own Options
The housing market is finally stabilizing, and right now, the price of buying a home is as cheap as it’s ever going to be. This is a good time to take advantage of market conditions. But what do you do if you don’t have good credit or the money for a down payment?
Consider a lease-to-own agreement.
A lease-to-own agreement, also known as renting-to-own, allows you to move into the perfect house now, locking in a low market price instead of waiting and watching home values climb before you are able to buy. Sellers are likely to consider this type of arrangement right now because this is a hard time to sell a home. There are more homes for sale than there are people to buy them. Many sellers are looking for a way to get the homes out of their hands without losing money. Renting-to-own provides the perfect solution.
A lease-to-own agreement involves several things. Like any home purchase or rental, it requires a contract. A typical agreement lasts one to three years. An initial upfront payment, usually a few thousand dollars, is paid as a deposit on the home. The rent agreed on is fair market value, plus extra to be set aside with the deposit. At the end of the lease agreement, this money is returned to the buyer, to put towards a down payment.
The extra money tacked on to the rent that goes towards your down payment is usually around $200. This doesn’t seem like a lot, but if your lease lasts two years, and you paid $3,000 as a deposit, you will have almost $8,000 towards buying the home. Depending on the price of the home you are buying, this may be half of the recommended 20% down payment, a significant amount.
During the time that the home is being leased, the buyer has the opportunity to get ready to buy the home. This is the time to concentrate on saving a down payment and fixing up any negative marks on your credit. This is also the time to “test drive” the home, making sure that it is what you really want.
You will have the option to buy the home at any point during your lease period. If, at the end of that time, you decide not to buy, you forfeit the deposit you originally paid, along with all of the extra rent that you have been paying towards the down payment. That is part of the risk associated with a lease-to-own agreement. What this means, however, is that you do still have the chance to back out of the agreement if you decide that you don’t want the home, even if you do lose your investment
When considering a lease-to-own agreement, one of the most important things that you can do is to very carefully read the contract before you sign. If you have any questions or concerns, have a lawyer read it over for you. Although it is rare, there have been times when sellers add clauses that allow them to evict hopeful buyers over minor issues, making a profit before selling to someone else.
If you get the chance at a lease-to-own option on the house you like, take advantage of it. Work hard to save up the money you need for the down payment, and get your credit in order. Especially if you are a first time buyer, a lease-to-own agreement can be one of the best ways to get into a new home.
Buyers, what would be some more reasons to consider buying through a lease-to-own program?
Sellers, would you consider selling your home this way?
Views: 40