The Everything Guide to Buying Your First Home

How to find exactly what you want, and how to work with the experts who’ll help you get it.

Image: HouseLogic

So you’re thinking about buying your first home. Your very own house (and mortgage). A place to call — and make — your own.

It’s a big move, literally and figuratively. Buying a house requires a serious amount of money and time. The journey isn’t always easy. It isn’t always intuitive. But when you get the keys to your new home — that, friend, can be one of the most rewarding feelings pretty much ever. 

The key to getting there? Knowing the home-buying journey. Knowing what tools are at your disposal. And most importantly? Creating relationships with experts who can help you get the job done.

That’s where this guide comes in. We’ll show you not only the major steps you’ll take during the home-buying process, but also explain the relationships and experts you’ll need along the way. We’ve even made a handy infographic that outlines the home-buying process from start to finish. 

You ready to live the dream? Here we go. 

Do Your Homework

Oh sure, everybody wants to jump right into open houses. But before you even set foot into a foyer, you should identify your list of “musts” and “wants.” This list is an inventory of priorities for your search. And there’s so much to decide: Price, housing type, neighborhood, and school district — just to name a few.

To get yourself grounded, we recommend filling out this brief worksheet.

Start Shopping

Once you know what you’re looking for, the next step is to start looking at listings and housing information online. (This part? You’re going to crush it.)

Find a Great Agent

Your relationship with your real estate agent is the foundation of the home-buying process. (And your agent = your rock.) He or she is the first expert you’ll meet on your journey, and the one you’ll rely on most. That’s why it’s important to interview agents and find the agent who’s right for your specific needs.

Choose a Lender

Once you’ve found your agent (AKA, your new best friend), ask him or her to recommend at least three mortgage lenders that meet your financial needs. This is another big step, as you’ll be working with your lender closely throughout the home-buying process.

Pick a Loan (It’s Not So Bad)

Once you’ve decided on a lender (or mortgage broker), you’ll work with your loan agent to determine which mortgage is right for you. You’ll consider the percentage of your income you want to spend on your new house, and you’ll provide the lender with paperwork showing proof of income, employment status, and other important financials. If all goes well (fingers crossed) you’ll be pre-approved for a loan at a certain amount. (Sweet.)

Visit Open Houses, and Look Around

Now that you have both an agent who knows your housing preferences and a budget — and a lender to finance a house within that budget — it’s time to get serious about viewing homes. Your agent will provide listings you may like based on your parameters (price range, ZIP codes, features), and will also help you determine the quality of listings you find online. Then comes the fun part: Open houses and private showings, which give you the unique opportunity to evaluate properties in a way you can’t online.

Make an Offer

Once you find the home you want to buy, you’ll work with your agent to craft an offer that not only specifies the price you’re willing to pay but also the proposed settlement date and contingencies — other conditions that must be agreed upon by both parties, such as giving you the ability to do a home inspection and request repairs.

Negotiate, Negotiate, Negotiate

Making an offer can feel like an emotional precipice, almost like asking someone out on a date. Do they like me? Am I good enough? Will they say yes? It’s stressful! Some home sellers simply accept the best offer they receive, but many sellers make a counteroffer. If that happens, it’s up to you to decide whether you want your agent to negotiate with the seller or walk away. This is an area where your agent can provide real value by using their expert negotiating skills to haggle on your behalf and nab you the best deal.

Get the Place Inspected

If your offer is accepted, then you’ll sign a contract. Most sales contracts include a home inspection contingency, which means you’ll hire a licensed or certified home inspector to inspect the home for needed repairs, and then ask the seller to have those repairs made. This mitigates your risk of buying a house that has major issues lurking beneath the surface, like mold or cracks in the foundation. (No one wants that.) Here’s what to expect.

Ace the Appraisal

When you offer to buy a home, your lender will need to have the home appraised to make sure the property value is enough to cover the mortgage. If the home appraises close to the agreed-upon purchase price, you’re one step closer to settlement — but a low appraisal can add a wrinkle. Not one you can’t deal with. Here’s how to prepare.

Close the Deal

The last stage of the home-buying process is settlement, or closing. This is when you sign the final ownership and insurance paperwork and make this whole thing official. There’s some prep work you have to take care of first.

When it’s all said and done — break out the rosé. You’ll have the keys to your new home!

Home Buying and Selling During the Pandemic: What You Need to Know

Resources to help you navigate the new real estate normal.

Technology and good-old-fashioned creativity are helping agents, buyers, and sellers abide by COVID-19 health and safety practices while getting deals done.

Some buyers are touring houses virtually. Others visit in person while remaining at least six feet from their agent. Sellers are hosting open houses on Facebook Live. Appraisers are doing drive-by valuations. Buyers are watching inspections via video call. Masked and gloved notaries are getting signatures on doorsteps.

“We have had to make some adjustments, for sure,” says Brian K. Henson, a REALTOR® with Atlanta Fine Homes / Sotheby’s International Realty in Alpharetta, Ga. “Everyone is trying to minimize face-to-face interactions. There have been some delays, but mostly, deals are getting done, just with tweaks.”

Here’s what home buying and selling during the pandemic looks like.

Showings Go Virtual

The rules around in-person showings vary by city, county, and state. Some allow them and some ban them. Check with your state, county, and local government to get the latest on business closures and shut-down rules.

Agents have conducted home tours via FaceTime and other similar tools for years. But these platforms have proven invaluable for home buying and selling during the pandemic. Real estate sites report a surge in the creation of 3D home tours. Redfin, a real estate brokerage, saw a 494% increase in requests for video home tours in March.

“I’ve done several FaceTime showings,” says Henson. He conducted virtual showings before COVID-19, too. He recently closed a deal on a home the buyers only saw on video, he says, but hasn’t yet done so during the pandemic.

In places where in-person showings are allowed, agents wipe down door handles, spray the lockbox with disinfectant, and open up the house, closets, everything for a client. “We leave all the lights on so no one touches switches, and we don’t touch cabinets or doors during showings,” Henson says.

Safe-Showing Guidelines

The NATIONAL ASSOCIATION OF REALTORS®, which produces HouseLogic, recommends only one buyer enter a home at a time, with 6 feet between each guest. NAR also recommends agents have potential buyers wash their hands, or use hand sanitizer when they come in the door. They should also remove their shoes. No children should be present at showings, either.

“We’re living in extraordinary times and unusual circumstances. If you have the ability to work, you have to be creative,” Mabél Guzmán, a Chicago real estate agent, told NBC News. Guzmán, who is also vice president of association affairs for NAR, has put together a video offering tips and strategies for virtual showings during the pandemic.

Down Payment Help

Many organizations offering down payment assistance to first-time home buyers have temporarily suspended the programs or changed the rules. You can check the status of programs in your area at the Down Payment Assistance Resource site.

Desktop, Drive-By Appraisals

Appraisers are essential workers in many areas, so home valuations are continuing. But often remotely. New, temporary rules from the Federal Housing Finance Authority allow drive-by and desktop appraisals for loans backed by the federal government.

In a desktop appraisal, the appraiser comes up with a home estimate based on tax records and multiple listing service information, without an in-person visit. For a drive-by, the appraiser only looks at the home’s exterior, in combination with a desktop appraisal. The Appraisal Foundation has put out guidelines for handling appraisals during the pandemic. Here’s the FAQ.

And here are specific new appraisal guidelines by agency:

• Fannie Mae
• Freddie Mac
• FHA
• Veterans Administration
• USDA Rural Development

On the other hand, some private lenders still require in-person appraisals, which are allowed even in areas with shutdown orders. Private lenders hold about 35% of first-lien mortgages, according to the Urban Institute

When appraisers come to your home, they should adhere to Centers for Disease Control guidelines, including wearing gloves and a face mask, keeping at least 6 feet apart from anyone in the home, and asking if the homeowners have been sick or traveled recently to a COVID-19 hotspot.

Inspections Via Live Video

Inspectors are now often working alone, no buyers in tow, and using hand sanitizer and alcohol wipes. The National Association of Certified Home Inspectors advises inspectors to videotape their inspection so clients can watch it at home later, or to use FaceTime or other live video chat apps to take their clients along on the inspection, virtually. They can also call clients with their findings after they’re done.

The American Society of Home Inspectors has also issued guidelines for inspectors so they keep themselves and the homeowners safe while providing an accurate assessment of a home’s condition.

Mortgage Rates and Locks

With mortgage rates fluctuating quickly and closing times taking longer than usual, some lenders are extending mortgage rate lock periods. You can grab a good rate and hang on to it even if your lender takes longer than usual to process your loan.

But the protocol depends on the lender and the loan. Some lenders are offering this for all loans; others for refis. Check with your lender about its policy.

Employment Verification

An important step in getting a mortgage is proving the borrower has a job. In pre-coronavirus days, lenders called the borrower’s employer for a verbal verification.

The Federal Housing Finance Authority, which oversees Fannie Mae, Freddie Mac, and federal home loan banks, has relaxed the rules for loans backed by the federal government because so many businesses are closed.

Lenders for federally backed loans now accept an email from an employer, a recent year-to-date paystub, or a bank statement showing a recent payroll deposit as proof of employment.

Walk-throughs

Home buying and selling during the pandemic means real estate agents can conduct the final walk-through via video with their clients. Or they can just open the home and have buyers walk through on their own. Henson says he still accompanies his clients, but stays six feet away and has them wash their hands when entering and exiting the house. Everyone’s wearing masks, too.

And, of course, when the buyers take possession, they should disinfect.

Remote Notarization Depends On Where You Live

About one-half of states have permanent remote online notarization (RON) policies. These allow a notary and signer in different locations to sign electronic document, usually by use of video apps like Zoom or FaceTime. Notaries will watch you sign either a paper document or do an electronic signature on an e-doc, via camera.

Some states have rolled out temporary rules allowing RON. Here’s a state-by-state list of notary law updates, and the type of remote notarizations allowed. The number of states allowing remote notarization could grow as federal and state pandemic legislation expands.

Closings Get Creative

Traditional closings, where everybody gathered around a big table to sign the final papers, are no longer possible. Title companies and banks are getting super creative in dealing with the limitations.

A Minnesota company, Legacy Title, rolled out a drive-thru closing service at one of its offices in an old bank branch building. The title company rep sits in a bank teller window and handles the closing papers while the customer sits in their car. Legacy completed 14 closings in the first week it offered drive-thru service.

Then there are drive-by closings, where the entire transaction takes place in cars. Masked and gloved notaries meet buyers in parking lots and pass documents through car windows.

“I had a closing where the buyer sat in her car the whole time. The attorney came out to her car, gave her paperwork, had her sign in her car, and my buyer never got out of her car,” Birmingham, Ala., agent Isaac McDow told WBRC television.

Says Georgia-based agent Henson, “I’ve had closings the last three weeks [that] I’ve been asked not to attend. There was one where the seller signed two days before buyer. Then the seller came back two days later and signed.”

Henson, who is also licensed in New York, has had to extend closing dates on two sales there since. Co-op boards won’t let non-residents into buildings ­­­– not even an electrician who needs to make repairs as part of an issue that came up in the inspection. He left the closing with an open-ended date.

“It’s all about being really flexible right now,” he says.

TIP: Find out if your county recording office can complete the deal online.

Student Loan Relief

Finally, if you’re also trying to swing your student loan payments, know that federal student loan borrowers get an automatic six-month break in loan payments from April 10, 2020, through Sept. 3, 2020. Thanks to the Coronavirus Aid, Relief and Economic Security (CARES) Act, they also won’t be charged a dime of interest in that time.

Learn more at the Consumer Finance Protection Bureau’s site.

Keep in mind that payment suspension only applies to federal loans owned by the Department of Education. Some help may be available to borrowers with private student loans and other loans (like Perkins Loans and Federal Family Education Loans) that aren’t covered. But it’s not automatic. Reach out to your student loan servicer for information.

So, Should You Buy or Sell?

The real estate industry is creatively and safely responding to the situation, and mortgage rates remain low. Your agent is a great source of information about home buying and selling during the pandemic to help you feel comfortable. But, ultimately, it’s a question only you can answer

What You Should Really Know About Browsing for Homes Online

It’s fun! It’s exciting! It’s important to take everything with a grain of salt!

Image: HouseLogic

Oh, let’s just admit it, shall we? Browsing for homes online is a window shopper’s Shangri-La. The elegantly decorated rooms, the sculpted gardens, the colorful front doors that just pop with those “come hither” hues.

Browser beware, though: Those listings may be seductive, but they might not be giving you the complete picture.

That perfect split-level ranch? Might be too close to a loud, traffic-choked street. That handsome colonial with the light-filled photos? Might be hiding some super icky plumbing problems. That attractively priced condo? Miiiight not actually be for sale. Imagine your despair when, after driving across town to see your dream home, you realize it was sold. 

So let’s practice some self-care, shall we, and set our expectations appropriately. 

• Step one, fill out our home buyer’s worksheet. The worksheet helps you understand what you’re looking for. 
• Step two, with that worksheet and knowledge in hand, start browsing for homes. As you do, keep in mind exactly what that tool can, and can’t, do. Here’s how.

You Keep Current. Your Property Site Should, Too

First things first: You wouldn’t read last month’s Vanity Fair for the latest cafe society gossip, right? So you shouldn’t browse property sites that show old listings.

Be First Through the Door

Ask your agent to send you automated emails from their MLS with new properties that meet your specs.

Get the latest listings from realtor.com®, which pulls its information every 15 minutes from the Multiple Listing Service (MLS), regional databases where real estate agents post listings for sale. That means that realtor.com®’s listings are more accurate than some others, like Zillow and Trulia, which may update less often. You wouldn’t want to get your heart a flutter for a house that’s already off the market.

BTW, there are other property listing sites as well, including Redfin, which is a brokerage and therefore also relies on relationships with brokers and MLSs for listings.

The Best Properties Aren’t Always the Best Looking

A picture, they say, is worth a thousand words. But what they don’t say is a picture can also hide a thousand cracked floorboards, busted boilers, and leaky pipes. So while it’s natural to focus on photos while browsing, make sure to also consider the property description and other key features.

Each realtor.com® listing, for example, has a “property details” section that may specify important information such as the year the home was built, price per square foot, and how many days the property has been on the market.

Ultimately though, ask your real estate agent to help you interpret what you find. The best agents have hyper-local knowledge of the market and may even know details and histories of some properties. If a listing seems too good to be true, your agent will likely know why.

Treat Your Agent Like Your Bestie

At the end of the day, property sites are like CliffsNotes for a neighborhood: They show you active listings, sold properties, home prices, and sales histories. All that data will give you a working knowledge, but it won’t be exhaustive.

To assess all of this information — and gather facts about any home you’re eyeing, like how far the local elementary school is from the house or where the closest Soul Cycle is — talk to your real estate agent. An agent who can paint a picture of the neighborhood is an asset.

An agent who can go beyond that and deliver the dish on specific properties is a true friend indeed, more likely to guide you away from homes with hidden problems, and more likely to save you the time of visiting a random listing (when you could otherwise be in the park playing with your canine bestie).

Want to go deeper? Consider these sites and sources:

• School ratings: Data from GreatSchools.org and the National Center for Education Statistics, and the school district’s website
• Crime rates and statistics: CrimeReports.com, NeighborhoodScout.com, SpotCrime.com, and the local police station
• Walkability and public transportation: WalkScore.com and APTA.com
• Hospital ratings: HealthInsight.org, LeapfrogGroup.org, and U.S. News and World Report rankings

Just remember: You’re probably not going to find that “perfect home” while browsing listings on your smartphone. Instead, consider the online shopping experience to be an amuse bouche to the home-buying entree — a good way for you to get a taste of the different types of homes that are available and a general idea of what else is out there. 

Once you’ve spent that time online, you’ll be ready to share what you’ve learned with an agent.

How to Hire a Real Estate Agent — and Be Their Best Client Ever

Being a good partner to the agent you pick will make you both happier house hunters.

When you buy a home, your agent is effectively a business partner. You’re both working toward the same goal: Closing a real estate deal. That’s why it’s in your best interest to to know both how to hire a real estate agent and how to build a good relationship with them.

Because the better an ally you are, the better an ally your agent will be. Here’s how to pick a real estate agent and work well with them.

1. Know What You Want

A lot of home buyers dive into the house hunt with no idea what they want, so the first and best way to be a good client is to know exactly what you’re looking for in a house.

Ask yourself a couple of basic questions. What’s my budget? What type of house do I want, single family or town home? Is there a design style I must have? A neighborhood I need to be in?  

Knowing these specifics – and telling them to your agent – will help him find homes that match your criteria. Because neither you nor your agent wants to waste time looking at dozens of houses that aren’t even close to what you have in mind.

“Over-communicating your intentions and goals is a really good idea,” says Ashton Gustafson, an agent with the Bishop Group in Wichita Falls, Texas. 

Knowing exactly what you want can help you know how to pick a real estate agent, too. Some agents specialize in certain neighborhoods, and some specialize in old houses or particular architectural styles.

2. Meet Agents In Person

It’s fine to start off your relationship with an agent via email, text, and phone, but before you hire him to work with you, set up a meeting. Yep, do a face-to-face interview.

It’s a good idea to interview three agents before picking one. Here are some questions you should ask:

• How long have they been an agent?
• What neighborhoods do they specialize in?
• How many homes they’ve helped people buy in the last year?
• How many clients are they’re currently working with?

Meeting in person can help both sides determine compatibility and establish trust. To the agent, meeting them IRL is a sign you’re serious about buying.

“When I ask a question of a buyer, if I can’t see their face (then) I can’t see their reaction, and I have no idea if I’m really getting the emotions that are behind their answers,” says Jackie Leavenworth, an agent and real estate industry coach in Cleveland, Ohio.

3. Set Up Expectations for Communication

Tell your agent how you’d like to stay in touch during the buying process.  Do you do prefer texts? Facebook messenger? Or do you like old-fashioned phone calls (Telephone calls: Still a thing!)

Tell them how often you expect to hear from them, too. Daily? Weekly? And tell them the best times of day to reach you, too.

“My successful buyers ask what kind of communication they’ll have with me,” says Thai Hung Nguyen, an agent with Better Homes and Gardens Real Estate Premier in Washington, D.C. “My answer to them is always, ‘It’s totally up to you.’” 

4. Be Respectful

Be mindful of an agent’s time. Don’t flake on showings. Be prompt.

If you disagree with your agent, respectfully tell them why. 

Resist the urge to freak out if the agent doesn’t immediately respond to a text or phone call. “People hire me because I jump through hoops, but I also need buyers to know that I have a life, too,” says Leavenworth, the Cleveland agent.

5. Get Organized

We told you communicating your wants to your agent was key. Here’s a good way to do it: Write them down. Give a copy to the agent. He’ll be better able to find homes that match your criteria. 

You should also have your financial records in order. This means getting pre-approved for a loan. Pre-approval for a mortgage says you’re serious about buying a house and not just window shopping.

“Anything we do without a loan approval letter is pure speculation,” says Marki Lemons-Ryhal, an agent and social media strategist for real estate in Chicago. 

6. Admit What You Don’t Know

Real estate transactions are complicated. Don’t be embarrassed if you don’t know what all the terms mean, or what to expect from each step of the process.

If you don’t know what escrow means, ask. If you’re confused about the terms of an offer, say so. It’s totally normal to ask an agent for a little hand-holding — that’s what they’re there for. 

Part of knowing how to hire a real estate agent is finding one you trust enough to tell you things you don’t know.

7. Don’t Play The Field With Other Agents

If you’re working with an agent who is hustling for you, don’t dally around with another agent. In real estate, just as in romance, that’s cheating. It can backfire by damaging your relationship with your agent.

If your agent finds out you’ve got other agents showing you houses, he may prioritize other clients. So a big part of knowing how to pick a real estate agent is knowing that you need to stand by your agent once you hire him.

In fact, it’s in both your interest and the agent’s to sign a buyer’s broker agreement for a set period of time. The agreements spell out the rights and duties of both parties, including exclusivity.

Article written by: LEANNE POTTS

(Leanne Potts is an Atlanta-based journalist and serial home remodeler. She’s tackled five fixer-uppers and is working on a sixth. She’s written about everything from forest fires to dog-friendly decor and spent a decade leading the digital staff of HGTV.)

Five Things You Should Put In Storage While Selling Your Home

When your home Five Things is on the market but you are still living there, you can’t very well make it a model show home.  Still, there are a few things you should think about putting in storage while your home is for sale in order to make it as appealing as possible to buyers.  Here are the top five things you should consider putting out of sight.

Excess Family Photos

Buyers want to picture themselves in the house, and a slew of family photos hung all over the place can make that difficult.  If all they can see is you and your family, they won’t be able to easily envision their own family there.

Your Liquor Cabinet

A nice wine rack or a few bottles displayed near the wet bar are fine, but if you keep a lot of liquor in the house put it somewhere out of sight.  While it may seem illogical, buyers who share different lifestyle views might be put off by it.

Your Pet’s Toys

Chewed up tennis balls, smelly stuffed animals, and half-digested bones are part of life with a dog, but people coming to see your house will find it unattractive.  It will also tell them your pet has the run of the house, and they will wonder what damage might have been done.

Signs Of Repairs

Put away the plunger and similar items when you are selling.  It will prevent buyers from wondering if something is wrong with the plumbing, even if you only keep it around as a precaution.

Anything That Clutters A Room

So the extra bedroom is used as an office/exercise room/guest bedroom?  Versatility is great, but all that stuff in there will just look like there isn’t enough space in the house for everything you—or a buyer—needs.  Get rid of the exercise equipment and the desk, and leave the guest bed.  Extra bedrooms are more of a selling point than an office or exercise room.

It might be annoying to have to put some of your personal items away while you sell your home, but it can mean a faster sale and a larger profit.  Buyers need to see a home as a place where they can live, not the place where you live.

 

Examining A Home Objectively: What Matters And What Doesn’t

Everyone heads out to look at potential homes with a list of the things they want in a house, and a list of the things they definitely do not want.  In addition to that wish list, there are also some other things you will notice about the homes you visit that may strike you as potential problems.

When looking at homes, it is important to know what things are deal breakers and what things are minor issues that you can deal with easily.  Turning down a dream home because of something that is an easy fix seems like a silly thing to do, but it happens surprisingly frequently.

Cosmetic Issues

You walk into a home and it has terrible wallpaper or paint colors you wouldn’t dream of using, and it turns you off immediately.  While the gut reaction is normal, it is important to step back from that instinct and think about it objectively.  Painting is not particularly difficult or expensive, so try to imagine how the home would look with a different color palette, one that is more your style.

The ability to recognize which issues are merely cosmetic and can be easily fixed is an important key to finding a house you will love.  Be prepared to visualize the home as you could make it with a few cosmetic changes.  It will open you up to the possibilities and might allow you to consider homes that aren’t perfect the way they stand now, but could be just right with a little elbow grease and paint.

Major Repairs

In some cases the major repairs that a house needs might be obvious.  In other cases they might only be unearthed during a home inspection.  Either way, you will need to give serious consideration to whether or not you are willing to deal with the problem.

If the home needs expensive repairs, you can either try to get the seller to do the repairs or accept that you will need to do them yourself.  In most cases, the seller will probably not be willing to take on major repair work, but might reduce the price accordingly.  Still, this might be a deal breaker if you are seeking a turnkey home.

Knowing The Difference

A home inspection is the best way to uncover all of the issues, both minor and major, that a house might have.  When you review the inspection, look for things that can be easily fixed as well as those that can’t.  The amount of work you want to do on your home will determine what problems you can personally live with.

 

Show Me the Money: How Much Cash You’ll Need to Bring to the Closing Table.

Let’s start low and then build up. First of all, if you qualify for a VA loan, they allow a zero down payment. If you’re a veteran or an active duty service member, you need to know that. Also, if you’re buying a home in a rural area, ask your REALTOR about the Department of Agriculture program. Yep, the USDA has a zero down home loan program for people buying out in the country.

Now if neither of those programs work for you then you’ll have to come up with some cash when you buy a house. But, you do not need a 20% down payment. If you’re a qualified buyer you can find a good safe mortgage which requires as little as 3% down. And again, this is not some sub-prime back alley mortgage, this is a high quality home loan. So that’s a good starting point.

Now, how do you get the money? Well course people who sell one house and buy another, they just take the profit from the first place and buy the second one. But if you’re a first time home buyer you don’t have that ability. So for you there are basically four ways to get your down payment ready to go.

First, save it. Just sock away all the money you can and try to temporarily stop spending on things you don’t really need. Plenty of people have given up vacations or expensive dinners in order to conserve their down payment money. You can too. It helps by the way to have your money put in your savings account automatically – direct deposit. You never see it so you won’t be apt to dip into it.

Second, plenty of first time home buyers get the down payment from their parents. But it has to be a gift, not a loan. Lenders won’t allow you to barrow the down payment. Your parents will have to give you the money. It happens all the time all across America.

Third, if you have an IRA or a 401K you might be able to withdraw money for a down payment. Talk to your accountant about this one. You need try at least to avoid penalties for early withdraw. So talk to a financial pro about whether that’s a smart move for you or not.

The forth way to come up with a down payment, your city or state might have a program that provides down payment assistance. Again, talk to your REALTOR about what programs are in your area. You might qualify, you might not. Many people are surprised that they can be making a pretty good amount of money and still get down payment assistance.

On last thought. I talked a lot about how to get into a house with a low down payment. But if you can, you should know, it’s almost always better to put down more. Put down as much as you can. Your monthly payments will be less, you’ll walk into the place with more equity. And if prices were to drop, you’ll have more protection against going under water. So more is better. And if you just don’t have more, that’s okay. Remember, you do not need 20%. If all you have is 3%, 3.5%, or 5%, don’t give up. Because the home you want could be within your reach.

 

Things You Need When Applying For A Home Loan

Congratulations!  Now that you have found the perfect home, all that’s left is getting the perfect mortgage.  In order to do that, you will have to know what your lender needs from you in order to get your loan application approved.

Property Description

When applying for a home loan, you will need to provide the lender with detailed information regarding the property that you intend to purchase, including a physical address, what type of loan you are requesting and how you obtained the funds to be used as a down payment.

Borrower & Co-Borrower Information

All persons named on a home loan must be able to provide their name, date of birth, current address, former address (if within the last two years), marital status, current and former employment information, telephone number and social security number.

Most lenders require tax returns for the two years preceding the loan application, along with current paystubs or, if self-employed, a year-to-date profit/loss statement.

Current Mortgage Expenses

An important part of every home loan is affordability, which is why your lender will need to know how much of your income is available to pay for a new home.  If you have a current mortgage, be ready to provide a detailed list of expenses that you pay each month in relation to the property.  This includes a mortgage payment, real estate taxes, mortgage insurance, homeowner’s association dues, utilities, etc.  If you plan to sell the home, let your lender know so that they will understand you are simply replacing one debt with another.

Yes Or No

Almost every loan application asks both the borrower and co-borrower (if applicable) to answer a few simple yes and no questions on the application.  Questions pertaining to outstanding judgments, bankruptcy filings, foreclosures, lawsuits, alimony, child support and citizenship status are standard and should be expected when applying for a home loan.

Statement Of Assets & Liabilities

When applying for a home loan, both the borrower and co-borrower will be required to disclose all of their current assets and liabilities.  An asset is property, either real or personal, that is owned and is of value.  A liability, on the other hand, is a financial obligation for which one is liable.

A loan application will request information relating to assets and their current market value, including automobiles, real estate, stocks, bonds, life insurance (cash value), business net worth, personal property, etc.  If any amount of money is owed on these properties, the lender will request information relating to the unpaid balance in order to determine the actual equity that the borrower has in any given property.

 

Is An Income Property Right For You?

The appeal of income properties and the potential for what may seem like easy money and early retirement have likely crossed the mind of anyone who has heard of this business venture.  There is a lot more to consider before entering the income property game, however, than simply purchasing a property and watching the dollars roll in.  Here are a few things to consider before launching into your new career.

Can You Recognize An Income Property When You See It?

There are a lot of features that make a good income property.  Whether you are considering flipping it for a profit or renting it out to potential tenants, knowing what to look for is more than half the job.  Can you realistically estimate what the cost of renovations to the property will be?  Do you know what the value of the home will be after the renovations, based on its size, location, etc.?  Do you know what the market rent would be for the property?  If you can’t answer any of these questions you either have a lot of work to do, or you may want to reconsider.

Not Scared Off?

So you think you can reasonably identify an income property and are still interested in making your first purchase.  Here are a few tips for making that a success!

Know Your Intent—Whether it’s flipping or renting the property, you should have a clear picture before you make the purchase.  Have an estimate of what the renovations will cost as well as the profit margin of the investment, both in the short and long term.

Consider Splitting The Costs—Many people who enter the income property market reduce the risk by having partners.  Whether it’s a friend, relative, or business partner, this may be the right decision to minimize your risk in your first venture.

Make It Your Business—Whether you plan on doing this as an additional source of income or you are going into it full time, realizing that this is now a business will prevent you from losing a fortune.  You will spend a lot of time getting to know both the real estate and the home renovation industries, and the more you know, the more successful you will be.

Deciding to get into the income property business can be a time consuming, but ultimately very rewarding, venture.  Like any business, the effort you put in and the knowledge you have will determine the success you achieve.

 

Creating Curb Appeal

If you’re selling your home, there are a number of things you can do to improve your property’s potential value and appeal.  Creating curb appeal is one of the most effective and easy ways to accomplish this and to increase the interest of potential buyers in your home.  Here are some simple and inexpensive ways you can increase your home’s curb appeal.

Use Color Effectively

Color can be a power tool in attracting people to your home.  If the exterior of your home could use a fresh coat of paint or a new door, this is a great opportunity to add some points of interest to your property.  Always remember, however, more is less—choose colors that are similar to other homes in the area.  You can infuse more vibrant and interesting colors through accent features and flowers or plants.

Create An Inviting Entrance

Making the entrance to your home attractive and inviting will give potential buyers an instant sense of welcome the moment they walk through the door.  Make the door the focal point of the exterior of your home, and think about elements such as lighting and color to make it as attractive as possible.  Also think about details such as including a nice welcome mat on your front step, some flowers in attractive pots or urns flanking the entrance, and even consider adding a chair with a small table if you have a larger porch area.

Landscaping is A Must!

Is A Must!Making your lawn and yard attractive, free of clutter and debris, and nicely landscaped can really make all the difference in adding curb appeal.  First remove all weeds, fix any areas on your lawn that need repair, and mow it carefully.  If you have any unsightly items or clutter in the yard, remove it and replace it with well-placed flowers and plants.  If you have a large front yard with no trees, consider planting one or two to add interest and value to the property.

These are just a few of the many ways in which, with a little effort and a small amount of money, you can increase interest in your home.