Section One - Purchasing a Home
Purchasing a home is one of the biggest decisions you will make in your lifetime. In today’s current market it is even more challenging. Has the market bottomed out or will prices go even lower. No one has a crystal ball and can answer that question with 100 percent accuracy. Today’s market does have some pros and some con’s. If you do your research and be thorough you can make a decision that you will be pleased with. Here are some pointers you should follow during the process.
a. Have good credit, if your credit score is in the low 600 hundreds you are wasting your time. The day’s of no doc loans and low credit score and no down payment are history.
b. Be realistic, even if you pre qualify for a certain amount add up all your monthly expenses and then see if the math works.
c. Remember you will be paying real estate taxes and homeowners insurance and private mortgage insurance above and beyond your mortgage payment.
d. If you plan on living in you home for over 5 years pay points on the loan to lower your interest rate. Points are interest paid up front at the beginning of the loan. One point is 1 percent of the amount borrowed and is tax deductible the year of the purchase.
e. If possible put down the largest down payment you can to lower your interest rate.
f. If your credit score teeters on the line between good and not so good and you have a 401k plan from work borrow against that plan to pay down some debt. When you borrow against your 401k it doesn’t show up on your credit report, you are only borrowing money from yourself. Most financial advisors will tell you not to borrow from your 401k but if your losing 20 percent on you money you’re better off using this way.
g. Look at a lot of houses, the time and effort is worth it. There currently is a huge inventory on the market no matter where you live.
h. The home inspection is one of the most important tools when purchasing a home. During the inspection be aware of everything that is being done. Take notes, ask questions. This is when a deal can be made or broken so make sure it is a thorough inspection and if there is something you still doubt after the inspection ask that a second inspection done by some one else.
i. Have 2 years tax returns ready at a moment notice.
j. Shop around for your mortgage. It a buyers market and that also goes for loans.
k. Make sure you still have your job at close, if the entire process takes from initial offer to close a couple of months your employment will be verified again.
l. Keep your cool, it can be an extremely frustrating process purchasing a home.
m. When you are shopping for a loan get a good faith estimate, closing costs can be dramatically different from one lender to an other. Use this as a tool to compare loans and get the best loan with the least amount of closing costs.
n. Roll your closing costs into the loan. Better yet negotiate with the seller to cover the cost.
o. Get your friends and family involved in the process. They can be very helpful and more times than not inform you about something you didn’t know about the process of purchasing a home.
p. Once you have purchased your home follow some of the tips further down the page, which will help you save money, live better, and be happy.
Section Two – Maintaining a Home
You now own a home and maintaining it threw the years will not only add value to your home but also will expand your knowledge and be a personal accomplishment by learning along the way. Following are some pointers that will help you with these goals.
a. Spending the most money on an item or a for a renovation or an update is not always the best value. Do you research; gold plated toilets seats make no sense at all. Neither does spending more for something that just doesn’t fit with your property.
b. Have the best yard in the neighborhood. Your neighbors will love you.
c. Don’t have the worst yard. No broken down cars left in the yard, grass not cut etc,etc, you will only bring down the value of your property and your neighbors will hate you.
d. Watch HGTV and DIY Network these are no doubt the best home improvement networks, learn more then do more.
e. Never spend more on major renovations that will price your house higher than anyone else in the neighborhood.
f. Depending on the region you live have a yearly termite inspection done on your property.
g. If you become courageous and decide to restore an older home to its original condition or maybe a couple of rooms, don’t even attempt it if it can’t be completed in less than 6 months. These renovations mean you are paying for living space your not living in so consider this before you even start.
h. Prep work 50% minimum for any maintenance project. Skimp on this and whatever your are trying to do will end up being dissapointing.
i. If you are power washing the exterior of you house always make sure you are level with the area you are powerwashing, if you are not you are only pushing water up and back where it should not be.
j. Ladders are dangerous, if you are not comfortable being on one hire some one to do the job that requires it.
k. This one is easy but some people just don’t get this one, keep your home clean.
l. Do you research when hiring a plumber or an electrician and ask your friends and relatives who they have used in the past.
m. Plan on replacing your hot water heater at least once, these things are made so cheaply that they only last sometimes a couple of years.
n. Put some extra money away every month in a house fund to cover unexpected repairs, like that hot water heater.
o. If you have natural gas in your home always have a licensed plumber do any kind of maintenance tide to a gas line.
p. If you are doing a major renovation contact you local town to see if you are required to pull a permit to do so.
q. If you have a problem with something you have purchased to improve your property give the manufacturer a call. It is amazing how helpful they can be.
r. Always contact your local utilities before digging.
s . Get flood insurance and if you in an earthquake prone area get earthquake coverage. Your homeowner policy will not cover either one of these events.
t. Have your home declared a homestead. Check your state laws to see if this is applicable.
u. Enjoy your home. Invite your friends and family often, and take pride in what you have accomplished.
Section Three – If you Rent
This area of housing pretty much most people have experienced. Unless you lived with your parents your entire life you have rented a place to live. But there are still something’s you may have overlooked so follow these tips if you rent.
a. Get renters insurance for you belongings, the landlord does not insure your stuff, only his dwelling.
b. Even if you have smoke detectors get a fire extinguisher.
c. Make sure your fire and co2 detectors work.
d. Be a responsible tenant. That means having respect for your neighbors.
e. Keep your apartment clean, this will not only make it more enjoyable, but will also make it easy when you move out.
f. If you are having a problem with heat or hot water and your landlord doesn’t resolve this problem in a timely fashion call your local town hall and find out about code enforcement laws and your rights as tenant.
g. Pay your rent on time. This is very helpful if you plan on renting again.
h. Check your state government website to see what your rights are as a tenant.
i. Save your money so you can own a home someday.
Section Four – If you want to be a Landlord
This area of housing is uniquely different from all three previous sections. If you are able to accept that the following may happen to you as a landlord then follow the page further for some helpful tips.
a. You may have a tenant that will not pay their rent.
b. You may have a tenant that willfully destroys your property.
c. You may have a tenant that will drive other tenants out.
d. You may lose a considerable amount of money from all of the above.
So you made it this far. Here are some tips that can help you along the way.
a. Being a landlord in not a hobby. It is a business, treat it that way.
b. Screen your prospective tenants thoroughly. If you don’t do this you are only asking for trouble. If you don’t have the resources to do this hire some one who does.
c. If you rent to a relative don’t be surprised if the take advantage of you.
d. If your tenant is chronically late with the rent don’t wait 6 months to do something about it. The situation will only get worse. At the first sign of trouble serve them with what ever your state requirement is for eviction due to not payment.
e. Be careful with what ever you say to a tenant. The last thing you need is having them sue you.
f. Always keep the dwelling up to code.
g. Make a visit to the apartment at minimum every 3 months and give the legal notice to inspect the dwelling.
h. Offer a senior citizens discount. Check with your states law to see if this is applicable.
i. Don’t rent to people with pets. If You do charge a monthly fee.
j. Keep up the property’s exterior and landscaping. This will always help to retain quality tenants.
k. Use leverage when buying rental property. Use as much of the banks money and the least of your own.
l. Keep meticulous records of your expenditures and your incoming rent.
m. Consider a professional management company to oversee the maintenance and the tenants.
n. Check with your state and local government to see if they offer financing for the purchase of rental property.
o. Don't waist your time with Hud, Fannie Mae, and Freddi Mac for financing for your rental property. They only support very large projects.
p. Join your local landlords association.
q. Form a L.L.C. and separate your personal assets from your
r. If you have gotten in over your head being a landlord get out, it will not get better.
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