Patricia White's Blog
If you've been dreaming of buying a home or have started looking at houses and mortgages, you've likely seen ads and information that directly targets the first time home buyer. Buying your first home is a significant milestone and one of the most financially beneficial things you'll ever do, and there are some mortgage programs designed to help first time buyers succeed in this life changing endeavor. If you're buying a home for the first time, you should know what programs and perks are available to you so you can strike the best possible deal. Even someone who has purchased a home in the past (but is now a renter) may be able to qualify for some of these plans.
What is a First Time Home Buyer?
On the surface, its simple -- a first time buyer is one who has never owned a home or had a mortgage. For some programs, though, a first time buyer can also be someone who has not owned a primary residence in the past three years. If you fit either of these categories, you should check out the programs offered for this increasingly large group of buyers.
Programs for First Time Buyers
First Time Buyer Mortgage Perks: Just about every mortgage company now offers some kind of perk or benefit for first time buyers; talk to your real estate agent to learn more about your options as you shop for your home. FHA, VA and USDA loans are particularly good for first time buyers, since they offer low down payments and more relaxed credit requirements.
Grants: The Federal government and both state and local governments offer first time buyers assistance in the form of grants. The idea behind these grants is to bolster the buyer's ability to make a purchase, often by helping them out with a downpayment. Grants vary by location and do not have to be paid back; they are designed to help first time buyers get past one of the big barriers to ownership -- that 10 or even 20% downpayment. New Jersey has a grant program for first time home buyers; this plan is replicated by most other states as well. Search your state or city name and "first time home buyer grants" to learn more -- or better yet, work with an experienced real estate agent and get the scoop directly from them.
Good Neighbor Next Door: This plan can help you save up to 50% of the purchase price of a home if you are a civil servant - police officers, firefighters, teachers and others who serve the community can benefit from this national program, with details seen here. Because of the nature of the loan, most borrowers are first timers and can purchase homes they would otherwise be unable to afford.
HomePath: Fannie Mae offers this program for first time buyers; it can save you up to 3% on your closing costs. You'll need to attend a class, must be a true first time buyer and purchase a qualifying property to save. Other perks include a first look at foreclosed properties as they arrive on the market, making this an ideal program for areas with a lot of competition for buyers.
First Time Buyers Can Find Big Savings
The time to learn about first time home buyer benefits is now -- before you make a purchase. Once you have a mortgage, you no longer qualify and you could miss out on some substantial savings. Get in touch today if you are buying your first home -- we can help ensure you know about all the ways you can benefit and help walk you through the ownership process, every step of the way.
As a home seller, it is crucial to do everything possible to get your residence "buyer-ready." In fact, if your house dazzles a buyer, you may be better equipped than ever before to optimize your home sale earnings.
Ultimately, it can be quick and easy to get a house buyer-ready – here are three tips to help you prepare your residence for prospective buyers:
1. Bolster Your House's Curb Appeal
When a potential buyer goes past your home, you'll want your residence to make a great first impression. And if your residence has outstanding curb appeal, a prospective buyer may choose to set up a property showing right away.
To improve your house's curb appeal, you should mow the front lawn, trim the hedges and do whatever it takes to make your residence attractive to potential buyers. Of course, if you need extra help to bolster your home's curb appeal, you may want to employ professional contractors as well.
2. Remove Clutter
Antiques, paintings and other décor may help you transform your house into a home. However, these items may do more harm than good when you try to show your residence to prospective buyers. And in some instances, various personal belongings may make it tough for you to show off the true size and beauty of your residence.
It generally is a good idea to remove as much clutter as you can from your residence. Remember, your goal as a home seller is to make it simple for a buyer to envision what life may be like if he or she purchases your house. If you eliminate clutter from your residence, a buyer should have no trouble imagining what life may be like as the owner of your home.
3. Clean Each Room of Your Home
A neat, tidy home is sure to impress prospective buyers. Thus, if you allocate time and resources to clean each room of your house, you could boost the likelihood of a fast, profitable home sale.
Oftentimes, it helps to hire a professional home cleaning company. With this company at your disposal, you can get the help you need to improve the appearance of each room of your home.
As you get ready to add your house to the real estate market, you also may want to hire a real estate agent. This housing market professional is happy to help you get your house buyer-ready, as well as prepare for each stage of the property selling cycle.
A real estate agent will offer expert guidance throughout the home selling journey. He or she will provide recommendations and tips to help you showcase your residence to the right groups of prospective buyers. In addition, if you ever have concerns or questions during the home selling journey, a real estate agent is ready to address them.
Get your house buyer-ready – use the aforementioned tips, and you can improve your home's appearance and increase your chances of enjoying a seamless property selling experience.
The homebuying journey may require many weeks or months to complete. As you approach the finish line of this journey, there are lots of things you can do to ensure a seamless conclusion.
Now, let's take a look at three tips to help you quickly finalize a home purchase.
1. Conduct a Home Inspection
A home inspection generally is performed after a seller approves your offer to purchase his or her residence. At this time, a home inspector will walk through a house and identify any underlying problems. Next, a home inspector will provide you with a report that details his or her findings.
For homebuyers, it is important to review a home inspection report closely. If a home inspector identifies major problems with a residence, you may want to modify your initial offer to purchase or rescind your homebuying proposal.
You also should attend a home inspection. Although you are not required to attend an inspection, doing so may enable you to gain insights into a home that are not included in a house inspector's report. Then, you can use all of the insights at your disposal to determine whether to proceed with a home purchase.
2. Maintain Flexibility
You may want to close on a home by a specific date, yet the homebuying process offers no guarantees. Delays may happen without notice, and you need to be able to adjust your homebuying timeline accordingly. As such, you should maintain flexibility as you try to finalize your transaction.
Remember, both you and a home seller share a common goal – to complete a property transaction as quickly as possible. If you maintain open lines of communication with a seller, you can reduce the risk of miscommunications that otherwise could slow down the homebuying journey.
3. Collaborate with a Real Estate Agent
Navigating the homebuying journey is rarely simple, particularly for individuals who want to acquire a terrific house at a budget-friendly price. Thankfully, you can collaborate with a real estate agent to achieve the best-possible results throughout the homebuying cycle.
A real estate agent will learn about you and your homebuying goals and do everything possible to make your homeownership dream come true. He or she is happy to provide recommendations and suggestions as you conduct a home search. And when you find your dream residence, a real estate agent can help you put together a competitive offer to purchase it.
Of course, a real estate agent provides comprehensive assistance during the final stages of the homebuying journey as well. Reaching a home closing date may seem impossible at times, but a real estate agent helps take the guesswork out of finalizing a house purchase. Therefore, he or she will go above and beyond the call of duty to ensure you can reach your home closing date without delay.
Simplify the process of buying a house – use the aforementioned tips, and you can minimize the risk of encountering homebuying hurdles and streamline the homebuying journey.
Buying property is a long-term investment. If you’re looking to make quick income from property, the only way is to buy low and sell high with minimal input for remodeling, upgrades, or even paint. However, if you intend to keep your property as a rental here are a few of the basics to make it profitable sooner.
Show Me the Numbers
Say you buy a house for $300,000. To get a loan for an investment property you’ll need a minimum of 20% down; so in our scenario, that’s $60,000. Closing costs depend on so many things that even an estimate is difficult, but rule of thumb is three to four percent of the purchase prices. Go with an even $10,000 to keep the numbers easy. You’re out-of-pocket $70,000 by this point.
The mortgage is for the remaining $240,000, so a 30-year fixed rate at 4.5 percent makes your principal and interest payments about $1,200 per month. Add to that property taxes of about $6,000 per year, or $500 per month, and homeowner’s insurance for about $150 gives you a monthly payment of $1,850. If you have an HOA, that might be an additional $50 per month. That’s $1900 for the basics, every month.
These numbers do not factor in upgrades, changes, paint, flooring, appliances or anything else, so remember that those items eat away at your profit too.Say that you rent it for $2,500 per month. That gives you a $600 difference. From that amount comes management fees if you pay someone to manage it for you. It also pays for lawn care unless you turn that over to the renter. Plus, for every month it goes unrented between renters, you carry the entire amount.
Positive Cash Flow
You decide to manage it yourself and have the tenant take care of the lawn. Presuming no major systems require repair during the first year and you rent it within a month, you receive $27,500 ($2,500 x 11) in rent. You pay out $22,800 ($1,900 x 12) leaving you with $4,700 positive cash flow.
Assuming you never have to spend anything on repairs, maintenance, increases in taxes or refurbishing between tenants, it will take you 12 years and nine months to make back your down payment. Of course, if you raise the rent every year or so, you’ll shorten the time to repay the down payment, but you may lose more tenants.
Is It Worth It?
Yes! After year 12, your profits increase. But only if you follow these guidelines:
- Do buy in a nice, livable area where people want to rent.
- Don’t overspend for the property.
- Avoid frivolous upgrades with low R.O.I.
- Vet your tenants.
- Remove tenants that damage property or don’t pay rent.Use a property management and marketing service to reduce unrented months.
- Know the property owner and tenant laws in your municipality.
Some properties are more profitable than others or are profitable sooner. Your investment real estate professional knows the difference and can help you choose the right property for your investment situation. If you want to invest in real estate, let your professional agent guide you.