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Lots of people are asking this question lately. I thought it would be a good time to clarify what I said a few weeks ago “Last but not least, don’t confuse buying your own personal residence with an investment. If you have more than just a personal residence and you use that for rental income, then you have an investment. My definition of an investment is anything which puts money into your pocket, and your personal residence will take money out of your pocket until you sell it. That’s not “conventional wisdom”, but lots of conventional wisdom isn’t wisdom at all.” about not looking at your primary residence as an asset. They thought I mean that they should continue to be renters as opposed to buying it. That couldn’t be further from the truth, so let me explain in more detail.

Real estate, along with many other investments such as stocks, bonds and mutual funds, can be found right now at prices lower than in recent years. Some would say it’s the best opportunity we’ve seen so far in our lifetime. Couple that with the $8,000 first-time home buyer credit available if you close on a property and take title before December 1st, 2009, and you have a potentially winning combination.

When you buy a abode, you are admittedly taking on a huge duty, but one which can pay off handsomely down the road. In 1964 my parents took out a 30 year fixed mortgage. In 1964 they were very careful about their budget to make sure the mortgage got paid, at 6 a month by 1984 they were very happy.they were stoked then!

When you buy a abode you should get a residence that you can qualify for, buy for as much as you qualify for, be careful not to overbuy. Doing that is part of what got us into the huge mess we’re seeing right now, with record foreclosures. Not to worry about all of that, keep in mind it is big duty though. Buy what you can afford trading up is easy when the market is right.

Now, what was I saying about that not being an investment? Just remember, even though it is likely to go up in value over time, that money is tied up unless and until you sell the abode, but if you do that, you have to buy something else or rent, because you still need a place to live. The other important consideration is that if you live there for five, ten or more years, you will probably have to replace carpet, paint, perhaps some appliances, maybe even the roof! This is not a representation of money being paid to you directly, which is what an asset is supposed to do.

Take a rental residence for example where your mortgage is 00 a month, but you can rent it for 00 a month. If you are putting two hundred dollars a month into you pocket, you will always consider that an asset.

So, bottom line, buy a home if you can, because the alternative is to pay rent, which is exactly the same thing as paying someone else’s mortgage for them. After you buy real-estate be sure to allocate some of your free money into interest earning accounts as well, i.e. Stocks and Bonds.

Maintenance fees and costs vary across different types of houses. These costs must be known by first time homebuyers and factored into their buying decision.

Certain types of MN homes for sale incur neighborhood association fees or extra taxes and fees imposed by the town or city government; knowing what these fees are in the early stages of your new home search can help you make the best decision given your budget requirements or limitations. Here is a basic breakdown of maintenance costs associated with different types of homes:

Condominiums: Condos or flats are increasingly becoming popular for first time house buyers. Condominiums are a form of real property wherein individual units in a multi-unit complex or building may be owned but each owner has access to common facilities such as hallways, main entrances, stairs and elevators. As such, you’ll need to pay fees depending on your stake in the building.

Ilyce Glink, author of the book ’100 Questions Every First-Time Home Buyer Should Ask’ explains that condo fees are calculated by taking the total building’s expense and dividing that by the percentage of ownership. The total building expenses include the building’s emergency reserve account, and the final cost may fluctuate over the course of the year.

Row houses: The maintenance fees of a townhouse will not go beyond what you would expect of a regular, exclusively owned home. However, some MN townhomes are part of a homeowner’s association, in which case you will need to pay a monthly fee for maintenance. Being part of an association requires an owner to pay monthly association fees for the overall maintenance expense of the association including taking care of common yards and shared areas.

Mobile houses: Normally, mobile home owners are solely responsible for their own maintenance expenses. These fees are comprised of, but not limited to, water, sewage and garbage, electricity, cable and other services. But some mobile home parks do charge a fee for renting land space. In addition, each park has specific requirements and rules that a homeowner must first agree to.

Single-Family Home: Maintenance costs of these houses are solely the responsibility of the homeowners. Even if the home is within a community setting, the homeowner will be responsible for maintenance and upkeep, landscaping, lawn services and other fees associated with maintaining a home. You will also be responsible for all real estate taxes and government fees.

If you are considering to get a loan, remember that some lenders might package some of these maintenance fees into your loan. Give all the information you got from your realtor to your loan officer and inform him/her of your budget to acquire a loan that will fit your needs.

Whether you’re interested in a townhome or a single-family house, there will be several costs involved with home ownership and maintenance. It is better to know more about these costs while you are still searching rather than be surprised by every fee you have to pay after you bought the house. Compare the total costs for each house you are interested in next to each other by using simple spreadsheets or checklists. In this way, you are making an informed choice that you are less likely to regret.

If you have not bought a home in the last three years you should take note of the following 10 home buying questions below. Actually, any potential home buyer should take note of this list of questions and avoid them if possible while you are buying a home – or even considering it. Always keep in mind – if you have questions make sure you ask them. The last thing you want to have happen is that you have questions and you do not ask them until it is too late. If you wait to ask your questions, you could stand to lose money, time, your credit, and the home of your dreams.

Top 10 Questions To Consider And Ask About Before You Sign On The Dotted Line

• Does it matter that not all of my debt is on my credit?
• After I’m approved for my home loan, will it be okay for me if I apply for some credit cards that I want to use to buy furniture after settlement?
• Can I use my money in the bank to buy some furniture before settlement?
• Versus using my savings and checking account money, can I use a cash advance to cover my down payment and points?
• I just financed a car loan for my kid who still lives at home. Is this a problem when getting a home loan?
• Does it matter if I leave my old job for a new one when applying for a mortgage?
• Do my credit scores go down everytime someone looks at my FICO scores?
• I recently financed a car but I do not think it is on my credit report will that impact my mortgage qualification?
• Now that I am qualified, will it matter if I was late on my last credit card statement?
• Will the lender get my credit after they pull it the first time?

The number one rule of these questions is that you need to speak with your mortgage loan officer before you extend more debt, or spend money that you used to qualify. Even if you do not ask your mortgage loan officer – it is a good idea to not mess with your credit, income and finances until you go to your mortgage settlement. This means keep your current job until after just before settlement. The key to getting through the home buying process is to think about your income, finances, and credit first before you do anything.

Buying a brand new home as a first time home buyer in Minnesota is an attractive proposition for most; you get to move into a completely new living space with brand new amenities and don’t have to worry about maintenance and renovations for at least the first year. 

Nevertheless, brand new properties are more expensive than existing ones and you’re not always sure what awaits you in the new neighborhood you will be living in. 

Yet, you can gain and learn from this situation with sufficient know-how on the pros and cons of homebuying; below are some significant steps to follow as you begin scouting for your new home

1. Are you willing to spend extra for a new home’s purchase? Because of its newness, all brand new homes in Minnesota are priced at a premium; this means that you will be the one to get a taste of everything it offers, from the moment you entered your new property. 

2. Does resale value matter to you? Acording to Ilyce Glink, author of ’100 Questions Every First-Time Home Buyer Should Ask’, Minnesota homes for sale that are newly constructed do have faster appreciation than existing ones. When you have plans of selling your home in the near future, it may be a good idea to have a brand new home because it’s market value is higher and you can profit at a larger scale from it.

3. Can you easily adapt to a new neighborhood? The construction of new homes rapidly increases at a certain time, thus, being a new homeowner in an area may require knowing more people in the neighborhood before having a full knowledge about the whole area.  You may need to consider safety and security if you have small children or elderly residents living in your home, and find out what options you have to make sure your home is as safe and secure as possible.

4. Would you be willing to spend your resources in a home renovation? Homes that are existing can appreciate tremendously in value if you have the time and resources to invest in renovations and maintenance. You may opt for a ‘fixer upper’ if your plan is to have a long-term investment to give you a high profit at a short time.

5. Are you looking for an investment or a primary residence? Many younger first time home buyers are looking for investment properties that they can fix up and sell quickly to turn a profit. Mature home buyers are more likely to be in the market for a primary residence since they want to settle down and establish themselves in the neighborhood. Identify your goals beforehand and decide what you think will give you more benefits.

Deciding whether to buy a new or existing home will largely depend on your short and long-term goals, and the amount of money you are willing or able to spend right away. Consider all of the above questions when you’re deciding between the two options so you can make the best investment with your resources.

Getting a home inspection completed on a property you are interested in buying has become increasingly popular.  Many buyers cannot picture buying a property without having it properly inspected.  The job of the home inspector is to determine its general condition and it all begins with a good look at the roof.  Even though you are relying on the advise of an expert it is important to obtain an working knowledge of what is being inspected and why.

It is very important that the roof is in good condition because it protects the home from the elements.  Depending on what area you reside in roofs will be constructed to withstand the different conditions that are common to the area.  That’s the reason it is not only important to inspect the roof but to also get it inspected by a person that is familiar with local building codes. For example a Toronto home inspector will look at a roof’s ability to protect the house from heavy rains in the summer and ice and snow in the winter.  A home inspector from Florida will want to make sure that it is properly constructed with hurricane ties to protect it from high winds.

There are many types of roofs that can be found on buildings but the most common is called a pitched roof.  There are basically four parts that are used in its building.  Support for the roof is supplied by the framing.  On top of the framing plywood is attached that makes what is referred to as the deck.  Older houses can have boards that attach to the frame but they both serve one purpose and that is to provide a base for the waterproof layer such as shingles. Having a suitable waterproof barrier is critical in keeping the interior of the home dry and free from mold and rot.

As part of the roof inspection procedure a certified home inspector will be reviewing a number of factors.  The foremost is the condition of the shingles.  Shingles can have a lifespan of about 25-50 years but no two parts of the house age at the same rate.  The south facing side of the roof will usually age quicker since it is exposed to more sun.  With asphalt shingles, that are the most used, they will begin to curl, peal and crack.  This may allow moisture to get in and damage the deck and structure of the roof.

Many people only think of a roof stopping water from getting in however it also has to breath.  This is accomplished through adequate ventilation by using roof vents and the soffit. Since the roof is the tallest point on the house warm air will rise and collect in the attic.  Moist air that is collects in the attic can cause mold to grow and begin to rot the wooden structure.  The aftermath is that the roof will decay from the inside out.  Mold in the attic of the roof can spread spores all over the house and be a health danger.

Problems that could be found in the roof can be remedied.  It could be something as easy as putting in extra vents or having new shingles installed.  Even damaged parts of the deck can be fixed quite easily.  A home inspector will be able to guide you as to level of the problem and how to rectify it.

Purchasing a dream house is one of the major milestones of any individual’s life. Real estate prices are witnessing an unprecedented rise. The designer and flashy homes, which appeal us the most, are beyond the financial capabilities of a lot of individuals. However, this fact should not deter us from fulfilling such a dream. Wide availability of low interest mortgages has enabled even the common man to own a home of his choice.  

Starting with the basics, mortgage is a type of loan that any individual can take, in order to buy a home or a property. The property being bought is used as collateral to the loan, this often means that if the repayments schedule of the mortgage is not complied with fully, the lender can take the possession of your property, and sell it to recover his amount.

Any mortgage deal whether it is the first one, or a remortgaging effort, requires a lot of hard work. The best advice given by any lender is cleverly disguised to suit his interest the most. So, the first thing that any borrower should do is to take a closer look at any lender’s advice and compare it with other offers floating in the market.
Selecting the mortgage that is just right for you and gets you the best deal involves taking a lot of decisions. The two main things that require the greatest attention are the interest rates charged for the mortgage and the repayment method of the mortgage.
The rate of interest to be paid for mortgages are determined by the base rates prevailing in the loan market. A low interest mortgage is what the borrower should go for, since the lower the interest rate; lower will be the monthly repayment. At any given point of time the borrower might get hundreds of offer for mortgage. Every lender has their own set of conditions and charges.  The borrower is advised not to succumb to any offer with cheap initial interest rates; instead he or she should look at all the features of mortgage before accepting any deal.

As for the repayment method the borrower has two options – a repayment mortgage or an interest only mortgage.
In a repayment Mortgage, the borrower has to pay off the amount in equally spaced installments. The installments gradually recover the principal amount coupled with the interest from the borrower. Thus, the mortgage is fully paid by the end of agreed term.
In an interest only mortgage only the interest is charged in the installments. The monthly repayments does not include the principal amount. The arrangement to repay the principal amount is made by other means, usually at the end of the mortgage term or as agreed between the two parties. Some investment in shares, or stock is made use of in order to guarantee the mortgage amount. The borrower has to make sure that his investment grows, so as to pay the mortgage by the end of agreed term.
Most lenders will offer mortgage up to 95% of the property’s value under consideration, but the borrower might have to pay a higher lending charge if he borrows more than 75% of his property value. There are other costs also, which are essentially involved with a mortgage. The lender might ask you to deposit an amount upto 3-10% of the asking price of the property. Motgage price also gets escalated due to valuation fees, solicitor’s fees and higher lending charges.

After deciding on a mortgage, the borrower has to apply formally to the lender. While filling in the details, he has to be careful nothing is left out. If he feels confused at any stage he should take the help of a financial advisor, instead of making wrong assumptions.The borrower will soon receive a mortgage offer, provided everything goes smoothly.

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Getting a house of your own is a lifetime achievement and a home mortgage helps you in achieving this milestone much earlier than it would otherwise have been possible. In fact, the first home mortgage is also filled with a lot of emotion. A home mortgage is something that can actually make your dreams come true. So we can start off by discovering what a home mortgage actually is?

Home mortgage makes it possible for you to buy a house even if you do not have the required amount to pay for it right away. This is made possible by borrowing money from someone and paying it back in monthly installments. The person who lends you money is called the home mortgage lender. The home mortgage lender lends you money for a specific period (up to 30 years) during which you are expected to pay back the money in monthly installments. There are certain terms and conditions associated with the home mortgage agreement and these terms and conditions govern the home mortgage throughout its tenure.

Apart from others, the interest rate charged by the home mortgage lender is of the highest degree of importance. Interest charges are the means through which the mortgage lenders earns on this financial transaction called home mortgage. Virtually all home mortgage lenders provide a wide variety of home mortgage schemes/options. The most important variation in these schemes is in terms of the interest rate and the calculations related to it. In fact, a common way of naming home mortgage options is to name them after the type of interest rate used for that option.

Broadly speaking, there are two types of home mortgage interest rates – FRM (fixed rate mortgage) and ARM (adjustable rate mortgage). For FRM, the interest rate is fixed for the entire tenure of the home mortgage loan. For ARM, as the name suggests the home mortgage rate changes or adjusts throughout the tenure of the home mortgage. This change or adjustment of mortgage rates is based on a pre-selected financial index like treasury security (and on the terms and conditions agreed between you and the mortgage lender). That is how mortgage works.

It does not matter what type of home mortgage you have opted for, there’s no escaping the paying back of the entire home mortgage loan, with interest, to the mortgage lender. Failing to pay back the mortgage lender can result in foreclosure on your home and the mortgage lender can even auction it off to recover the remaining debt.

Therefore, home mortgage is a wonderful means of getting into your dream home much earlier in your life. It would have taken a long time for you to get into your dream home if this concept did not exist. Really, a home mortgage is one of the best concepts from the world of finance.

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Should you buy or rent? All depending on the neighborhood and your financial situation. Years ago, I sold a home for a young couple who owed almost as much as the sales price on their house. They needed to take money from savings to pay the closing costs and sales commission. You can bet that they wished they had rented for the couple years they lived there.

So, before thinking of renting or buying, you must ask yourself if you want to live in this house forever or just a few years. Buying and later selling a home will usually cost about 10% or more of the value of the home. These costs mean that if the home only went up in value 10% or so in the year or two you lived there, you won’t be gaining anything (equity gain from principal pay-down is very little in the first years). Normally, if you only intend to be in the neighborhood for a couple of years, it is best to rent.

What about towns with faster rates of appreciation? Have you done some serious homework? If not, to assume appreciation will be more than the rate of inflation is just gambling. Only a couple of years ago, they had bought their house at a cost identical to what they are selling today, regardless of its excellent location. You can’t count on fast appreciation just because it has been that way recently.

To Buy Or Rent – Cost Comparison

Looking at buying versus renting, you have to take into account that in many places it cost much more to buy. In Tucson, Arizona, for example, a small home can cost $200,000. The mortgage payment, taxes, insurance and maintenance will add up to about $1,600 per month, but you can rent the same size home for about $800.

What does that mean? Many real estate fanatics will say you’re at least buying something for your money, and renting is throwing your money away. Of course in this example more than $1,000 of your payment will be going towards interest alone, and that’s not buying you anything.

Suppose you can afford the $1600 per month, but instead you rent for $800 and put the other $800 into a decent safe investment that makes you 5%? In three years you’ll have over $30,000 in this account. If the home appreciated at 6% per year (it has been more like 25% per year recently, but that can’t continue, and assuming so is not planning, but gambling), it would be worth $231,000. The costs of initially buying it and then selling it would be around $13,800 (2% buying and 6% selling), leaving you with a gain of about 19,000 once we include your principal pay-down.

Clearly, renting would have been a more lucrative option. Every market is different, of course, so you have to do the math. Compare the total costs of owning versus renting, and then make safe assumptions about the rate of appreciation for homes.

Usually, you would be advised to purchase rather than rent a house, if your intention is to always stay in the same neighborhood. In the last example, buying becomes a better bet after about four or five years. Also consider that if you get a fixed rate mortgage, your payment will never change, a benefit landlords won’t offer you that on your rent payment.

To sum up, look at the time you’ll be there, the comparison of total monthly costs, whether rents are going up fast, and whether you have good reason to believe home prices will be going up fast. Then look also at all the personal factors. Do you want to be responsible for the maintenance, yard work and unpredictability of ownership problems?

To buy or to rent? Do your own math.

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This article was supported by Kent Swig, the team at Toronto condo for sale

Buying a house is a very serious matter that comes in to people’s lives. It is very risky to invest your money in buying just any house you find. Some guidelines that you can fall back upon in deciding on the right house for you is an absolute must. Here are some:

1.Figure out what your rights are

When you are ready to buy your own house, be sure you understand your rights as a homebuyer. Knowing the process of buying a house prevents you from getting scammed. You yourself can do your home work or take help of knowledgeable persons like a real estate agent or a broker. Make sure that the agent you hire is licensed and have a wide knowledge regarding the area.

2.Be sure you can bear the cost of it

Your budget is really a big deal in buying your own house. What you want is different from what you need, so be practical. A big house won’t be of much use to you if you happen to be single and travel everyday? Make sure that you make the best for your money. Seek help or ask for suggestions especially for those who have knowledge in real estate prices. If you can’t stay for at least a year, buying a house is inappropriate for you. You may save a whole lot more of money if you sell it urgently.

3.Make sure it is in accordance with your style of living

Make your house a home. Be sure it really fits your way of life and you are comfortable with it. A good example of this is if you’re working in an office, a good place to find is near or in the vicinity of your office. If you love nature, a good place to find is outside the city with clean air, near parks, has a mountain view or near at the beach. Your personality really matters in finding a good house. Make sure to look at its suburbs first and try to gather some information about the area and its surroundings. Also think of those you will have as your neighbors and of what type they are likely to be.

4.    Consider your future plan

If you’re newly married, you might to consider how many kids you want to have. You can figure out the amount of home space or the number of rooms you need. It is better if you can afford a house that is close to a school of repute. School districts are more important to home buyers, therefore, it will increase your property values.

5.    Be organized

It is very important to make your document files organized and safe. Because it will prove that you own the house. It will help you a lot especially when it comes in paying your house payments (taxes and amortization).

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The first thing you should look for – or look forward to – is weeks and even months of diligent research.  The opportunities in foreclosed homes often fall into the old adage, “If something sounds too good to be true, it usually is.The reality is that it is 30% to 40% below market rate that some foreclosed homes will sell at.  But according to the editor of one real estate investor’s publication, “Most foreclosed homes sell at 5% below market.”

Location

If the foreclosure opportunity you’re looking for is an investment opportunity, then you would be wise to review five years or more of real estate sales history in the area.  Have the homes appreciated sufficiently to make your investment risk worthwhile?It is not an absolute necessity for the property to be in an exclusive neighborhood, but it should be in an economically stable area.   This is not an issue of who is moving in and who is moving out, but rather how much is being paid for the homes changing hands.

One recently introduced factor that you have to think carefully about is the coverage for windstorms and cost of homeowner’s insurance if it’s the Southeast that you are looking at.Chances are that you might find some real bargains in Hurricane Lane there, but you are also faced with the situation of buying a house that you can’t afford to insure.You will also find areas where flood insurance has ceased to be available any more.

Physical Condition

Do bear in mind the circumstances of a foreclosure.  Most people lose their grip on their homes after struggling to meet mortgage payments for an extended period of time.  That probably means the home has received little or no maintenance, and the property you’re inspecting may appear to be in poor shape.  If it’s in a quality location however, ignore the condition for the moment, take note of the obvious signs of deterioration, and incorporate rehab costs into your calculations.

Go through the competition

What you have to be aware of is that it is professionals that you are bidding against, just as in any commercial real estate market.  There are people in most areas who make a living from buying foreclosed properties, cleaning them up and putting them right back on the market.  Professionals operating in that fashion may not be willing to bid up near market price for the neighborhood, but with any well located property you’re not going to walk away with a “steal.”  Take a look at recent foreclosure sales in the area and see if you can find a pattern in the successful bids – how far below market are they?

Clean Title

For any foreclosed property, the condition of the building’s title deserves a thorough check.Enquire if someone else has any liens on it apart from the lender who is selling it.  If you can, determine if the former owner is embroiled in any lawsuits that could conceivably lead to a challenge of the sale and tying up the property.The theory is that if a property has reached the foreclosure stage, it is going to the market unabated.  That means nothing to an attorney who sees opportunity in attempting to delay disbursement of the former owner’s principal asset.  Delay is the operative word here; if you’re going to invest in a property you need to be able to put it to work for you with dispatch.

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