Frequently Asked Questions

How do I Figure out how much I can really afford on a mortgage?

This answer to this question lies in your income vs. your existing debt. The more you have coming in, the more you can afford on a mortgage. However, your credit rating will come into play too. Even if you have money coming in, if your credit is bad, then you might end up paying a higher interest rate on your mortgage loan.

What's the best way to calculate just how much a mortgage will cost me each month?

When you're trying to figure out how much your monthly mortgage payments will be, you need to first figure out how much you're going to put down. This will adjust your monthly payments. The more you pay down, the less the total sum is and the less your monthly mortgage payments will amount. The interest rate of the home loan also adjusts the overall price, so be sure to factor in those details as well.

What's the reason why I need to get a credit check to buy a home?

Your credit score tells a lot about it. It states whether or not you have a positive credit history. A low credit score reflects previous issues with your credit, such as delinquent payments or defaults. Lenders want to see a strong and positive credit history. Even if you have a steady, significant income, your credit check will show how you are at paying back loans.

Home Buying Tips

Buying a home can be a rather confusing and complex process, especially for first time home buyers, but also for repeat buyers. There are many steps to go through to successfully buy a house, so it's understandable that a large majority of home-seekers find it difficult. This section will focus on providing useful advice and home buying tips. We will constantly add more information on every aspect of home buying, from the initial search for a property to sourcing a mortgage, making an offer and closing the deal. We also like to offer practical tips for homeowners so that when you've struck a deal for your dream home, you will be in a good position to be happy with your purchase.

Purchasing a home is one of the most important financial investments anyone can make. It costs most of us hundreds of thousands of dollars, even before interest, so you don't want to make the investment unless you're positive about the condition of the property. That's where the home inspection comes in.

Although home inspection is not required by law in every state, most lenders require an inspection before they will approve a mortgage. Furthermore, repeat and first time home buyers will want to ensure they know of any faults before buying a home. The bank must protect its financial interest before making the loan, so you should protect your interest before taking it. In order to help you, here are four home inspection tips you can use.

Choose Your Home Inspector Wisely

If you plan to hire a company on your own to perform a home inspection, make sure you choose one with a reputation for reliable work. Check with your local Better Business Bureau and the Chamber of Commerce for any recommendations they might have. Also, ask friends and relatives who they used, and get their reactions to the service they received. Generally, a home inspection company that's been around for a long time may be more reliable than someone who's only been in business for a year or two.

For added peace of mind you might want to ask the home inspection company for a list of qualifications they look for when hiring inspectors. Inspectors with a history in home construction are a good choice, as are those with architectural, engineering, and construction-related degrees. Also, ask for a home inspection checklist of things the inspector will be looking at when he goes through the home. If there are things you want inspected that are not on the list feel free to request that the inspector include them. If he refuses, you can always hire a different home inspection company.

Accompany the Home Inspector on his Tour of the Home

Another one of our home buying tips is to actually accompany the inspector. Potential home buyers have the legal right to accompany the home inspector as he tours the home. It is in your best interests to do so if at all possible. As you follow the inspector around the home, take copious notes and don't be afraid to ask questions. The more you know about the house you're buying the better off you will be. You should also be sure to take your own flashlight with you so that you can peek into dark areas without having to look over the inspector's shoulder.

Make sure to temper your emotions and not panic if the inspector says something unpleasant. For instance, just because he mentions that a chimney is missing some grout, that doesn't mean the entire structure is about to collapse and you shouldn't buy the home. Take into account that the inspector is a disinterested third party who is there simply to provide you with information.

At the end of the day, as long as the inspection does not reveal any structural problems that are unacceptable to the bank, you will have the final say regarding any other issues that are found. Along these same lines, be careful to avoid arguments with the current homeowners as a result of the inspection process. Any concerns you have should be addressed through your real estate agents in order to make closing the deal as smooth as possible. You don't want the current homeowner to be your enemy.

Combine the Pest Inspection if you can

Some lenders require a pest inspection in addition to the home inspection. Even if your lender does not require it, a pest inspection is a good idea. The pest inspector will be checking for termites and other insects that cannot be seen with the naked eye. If the home inspection company you choose offers pest inspections, it's a good idea to have them combined into a single inspection. You will get a better rate and you will be dealing with the same company for both issues. If you need to find a separate pest inspector, use the same due diligence you employed in looking for your home inspector.

The home inspection is one of the most important parts of buying a new house. If you skip the home inspection, and you later discover problems that would've prevented you from purchasing the home had you known earlier, your home buying experience can quickly turn into one of regret. Home inspections may cost a significant amount of money out of pocket, but over the long run they are well worth the cost.

Home Appraisal Tips to Keep in Mind

A home appraisal is a method that is used to determine the value of a particular home. These home appraisals are obtained from an unbiased third party known as an appraiser. The appraiser's job is to inspect the home and come up with a total estimated idea of what it is worth. This system helps to ensure that home buyers do not end up purchasing property at a much higher price than what it is actually worth, and also protects the bank offering to lend money. Here are some home appraisal tips to keep in mind:

There are Several Ways to Value Property

There are two basic methods of home appraisal: cost approach and sales comparison approach. With a cost approach appraisal, the appraiser considers whether or not a particular property and its surrounding land will continue to be developed as time progresses. With sales comparison (the most common appraisal method), the appraiser will visit your home and make an assessment of your property's size, condition, and number of rooms. Afterwards, your home will be compared to several or more houses in the general location and an average value will be assigned to your property.

Tidiness does not Necessarily Affect the Outcome of an Appraisal

It is a common myth that the general cleanliness of your home will somehow end up influencing the decision of the appraiser on assigning a value to your property, despite some claiming this to be true. However, appraisers are more concerned about damages, leaks, and maintenance issues than they are about an untidy front yard. This, of course, should not disillusion you from keeping your property as tidy as possible when it comes time to make an appraisal, but realize that it is unlikely to have an effect on how much your property is valued at.

The Price of a Home Appraisal

Home appraisals typically cost around $300, but prices will vary according to a number of factors and the difficulty level of the appraisal itself. Among the factors your home appraisal quote will take into account include:

• The location of the property.
• How the property is being used.
• The type of property.
• The type of appraisal you require.

Legalities

Getting a certified appraisal of your home is a requirement in the event that you are going to be selling your home. On the other hand, if you are a buyer, then ensuring that you get a copy of the appraisal report for the property you are interested in is important if you want to ensure that you are not being overcharged.

What to do Before Getting an Appraisal for your Property

It would be a good idea to repair any damages that your property might have. Be on the lookout for water leaks, broken pipes, and rust. You do not necessarily have to let the appraiser know every last detail regarding the condition of your property, but if your property contains something worth mentioning (something that could project a higher value) do not hesitate to let the appraiser know.

Tax Tips for Joint Homeownership

Filing taxes can often be a complicated process that requires patience, time, and research. When it comes to filing taxes for joint homeownership, figuring out what needs to be done is particularly important, as this will decide which partner gets the greater share of tax deductions. There are a number of factors to take into consideration before filing your taxes, and these are primarily related to the type of joint ownership you have. In this article, you will be provided with some useful tax tips for joint homeownership.

Joint Homeownership Type

There are 3 types of joint homeownership. These are joint tenants with the right of survivorship (JTWROS), tenancy by the entirety (TBE), and tenants in common (TIC). Each status will affect the sort of tax deductions you can expect to receive, as well as which owner receives them.

In a typical JTWROS situation, each of the property's owners is considered to own the property in full. This means that if one of them passes away, the property remains under the ownership of the remaining owner. TBE is what applies specifically to married couples. TIC refers to a situation where both owners of the property own a specific percentage. Each owner's percentage is determined by the amount of money they have paid towards the purchase of the property. Once you have figured out which type of joint ownership you have, you can move on to filing your taxes.

Tax Tips

1. Under JTWROS, the person who pays the home's tax in full is the one who will be able to keep any tax deductions. If you pay the real estate tax, you will need to provide proof of payment to tax authorities.
2. A good tip for joint homeownership is to allow the individual with higher income to pay the taxes, while the other owner focuses on paying the utility bills.
3. Under TBE, married couples will need to deduct tax interest from the total of their combined earnings.
4. Under TIC, each owner will need to pay taxes according to the percentage of ownership they have.

Filing taxes can be made easier if you hire a professional to prepare your taxes for you. This can relieve a lot of the hassles associated with determining the amount of tax deductions you are entitled to.

Attending an Open House

Buying a house could easily be among one of the most important decisions you will face within your lifetime. Chances are that you will want to look through a variety of different options before making any decisions. Although there is usually no rush to find a new house, time is certainly a deciding factor in the process of house buying. Attending open houses can drain time if you are unaware of the key details to look out for. If you are spending too much time in the hunt for a new home or if the search is a little complicated, here are 5 valuable tips for attending an open house that can help to streamline the process.

Research Well in Advance of Attending

Your first step is before you even think of showing up at an open house set aside some time to study the real estate market within the area. Figure out what the average price for new property is within the neighborhood. Look for other information such as the proximity of the property to school districts and your current place of employment, and find out the possible resell value of the property. This will help you to save on time by sifting out the open house events that are not what you are looking for in a new home.

Create a List of Expectations

Most people tend to develop a distinct idea of the type of home they would ultimately want to live in. However, during an open house you might overlook some of these things. Create a list of all of the features you would expect the home of your dreams to have (within the realm of reason). This way, when you walk through an open house you can get a good idea of whether or not it conforms to your expectations in a short amount of time.

Budget your Time

Most open house events take place during weekends. In these cases, make sure to set aside plenty of time for attendance. This will also provide you with the ability to check out other homes that might be selling in the area. When attending an open house, take your time and try not to feel rushed. Get a good look at all of the homes rooms and areas. However, there is no need to go to the opposite extreme and spend an exorbitant amount of time looking at a particular property; budget your time.

Try not to Always Trust your First Impression

Sometimes buyers walk into an open house and make up their minds almost immediately. If a house looks really good, it can sometimes be easy to fall in love with it and be tempted to make a quick decision. However, it is important to not let yourself be influenced by your emotions. Pay attention to detail and remain observant. Keep in mind that most properties have their defects, and these tend to appear long after you have settled into them.

Don't be Afraid to ask Questions

If you are interested in the property, do not hesitate to ask your Realtor any questions that you might have regarding the cost of the home's utilities, the taxes you would need to pay, how old the roof is, etc. Having firsthand knowledge of what to look for can help you make a well-informed decision should you eventually choose to purchase the property.