First-Timer Friday: 6 Creative Ways to Afford a Home

 Following last weeks theme of affording a home, here are some ways to purchase a home that you may not have considered. Remember to visit my website or swing by my office for a complete version of my First Time Home Buyer Packet.

1. Investigate local, state, and national down payment assistance programs.  These programs give qualified applicants loans or grants to cover all or part of your required down payment. National programs include the Nehemiah program, www.getdownpayment.com, and the American Dream Down Payment Fund from the Department of Housing and Urban Development.

 2.  Explore seller financing.   In cases, sellers may be willing to finance all or part of the purchase  price of the home and let you repay them gradually, just as you would do with a mortgage.

3.  Consider a shared-appreciation or shared-equity arrangement.  Under this arrangement, your family, friends, or even a third-party may buy a home and share in any appreciation when the home is sold.  The owner/occupant usually pays the mortgage, property taxes, and maintenance costs, but all the investors’ name are usually on the mortgage.  Companies are available that can help you find such an investor, if your family can’t participate.

4.  Ask your family for help.  Perhaps a family member will loan you money for the down payment or act as a co-signer for the mortgage.  Lenders often like to have a co-signer if you have little credit history.

5.  Lease with option to buy.  Renting the home for a year or more will give you the chance to save more toward your payment.  And in many cases, owners will apply some of the rental amount toward the purchase price.  You usually have to pay a small, nonrefundable option fee to the owner.

6.  Consider a short-term second mortgage.  If you can qualify for a short-term second mortgage, this  would give you money to make a larger down payment.  This may be possible if you’re in good financial standing, with a strong income and little other debt.

If you are ready to start the home buying process, give me a call at 509-882-2001.

First-Timer Friday: Get your Finances in Order: To-Do List

This is my second installment of a weekly blog post I'm calling "First-Timer Friday". I have a packet compiled for First Time Home Buyers that come into my office to give them everything they need to know to purchase their first homes. If you are a first time buyer, feel free to visit my website to view the whole packet or come into my office to get a copy of it.

Let's face it, times are tough for pretty much everyone, as far as finances go. But that doesn't mean you need to give up on your dreams of home ownership. Here are some tips for getting everything in order so you can afford to purchase a home.

1.  Develop a household budget.  Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will include unexpected expenses, such as car repairs, as well as

     predictable cost such as rent, bills, and groceries.

2.  Reduced your debt.  Lenders generally look for a total debt load of no more than 36 percent of income.  This figure includes your mortgage, which typically ranges between 25 and 28 percent of your house hold income.  So you need to get monthly payments on the rest of your installment debt—car loans, student loans, and revolving balances on credit cards—down to between 8 to 10 percent of your monthly income.

3. Look for ways to save.  You probably know how much you spend on rent and utilities, but little expense add up too.  Try writing down everything you spend for one month.  You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at home more often. 

4. Increase your income.  Now’s the time to ask for a raise!  If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want.

 

5. Save for a down payment.  Designate a certain amount of money each month to put away in your savings account.  Although it’s possible to get a mortgage with only 5 percent down, or even less, you can usually get a better rate if you put down a larger percentage of the total

     purchase.  Aim for a 20 percent down payment

6. Keep your job.  While you don’t need to be in the same job forever to qualify for a loan,

    having  a job for less than two years may mean you have to pay a higher interest rate.

7. Establish a good credit history.  Get a credit card and make payments by the due date.  Do the same for all your other bills, too.  Pay off the entire balance promptly.

Why You Should Work With a REALTOR®

Not all real estate practitioners are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. Here are five reasons why it pays to work with a REALTOR®.

1. You’ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Get objective information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

3. Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.

4. Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

 

6. Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.

7. REALTORS® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.

8. Buying and selling is emotional. A home often symbolizes family, rest, and security—it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.

9. Ethical treatment. Every member of the NATIONAL ASSOCIATION of REALTORS® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a REALTOR®, you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for REALTORS® to take the Code of Ethics orientation and they are also required to complete a refresher course every four years.

If you are looking to buy or sell a home or property give me a call at 509-882-2001 or visit my website.

Grandview Gains Credit Union and Beautification!

The Lower Valley Credit Union (LVCU) opened its brand new Grandview branch last Monday, December 26^th, 2010. While according to branch manager, Phil Robillard, LVCU doesn’t do much in the way of home mortgages, they are the go to place for member service. “When people come in, they’re people,” Phil says, “not just numbers”. LVCU is a great place to head if you are looking to finance a new car, start saving for the future, or just looking for some free checking and a debit card. As far as loans go, they work a lot with consumer lending and home improvement or home equity loans. Not only does the credit union bring another option for banking to Grandview, but the beautiful new building helps spruce up the Northwest side of town as well.

Branch hours are 9:00am-5:00pm, Monday-Thursday and 9:00am-6:00pm on Fridays. It is conveniently located between Marchant Home Furnishings and Café Grande Vue on Wine Country Road.