HOME: Owning or Renting?

Posted on December 10, 2010. Filed under: Homebuyers, Ideas & Information, US Housing News | Tags: , , , , , , |

In everyone’s life there comes a time where they have to make the ultimate decision and decide whether to buy and own their own home or continue to rent. It’s a huge decision as both have notable benefits and disadvantages and it is not one to be taken lightly. Well, if you’re renting an apartment, chances are that you’ve had somebody tell you you’re just “throwing your money away.” In most cases, that’s the truth. But renting is something most of us start out doing and many people are comfortable doing it all their lives. In the contrary, owning your own home is the traditional dream that practically everyone has, especially when it comes to starting a family. It gives you a feeling that you have accomplished one of your goals and that you are both financially and emotionally secure as well as giving you a great sense of community.

To sum up, there are many advantages and disadvantages to owning your own home and renting. Some have advantages and disadvantages the other doesn’t have, but both can be a comfortable way to live. When it really comes down to it you have to choose the one that suits you’re financial, emotional and lifestyle needs at this time. Also, you have to take your future into account as well, will you want to be tied down and take responsibility for a huge investment or will you prefer the freedom of being able to move whenever you please?


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Essential Tips for First Time Home Buyers

Posted on March 22, 2010. Filed under: Homebuyers | Tags: , , , , , , , , , , , , , , , , |

Before purchasing a new home, there are few things you need to keep in mind. Here is a check list for home buying.

– One of the essential factors that affect your home buying decision is price. Yet most forget to check if they are purchasing at a rate at par with current real estate trends. Hence, people especially first time home buyers much check prevailing rates in your area. You can get all the information on websites like Zillow and Homegain. If these don’t sound quite reliable, you can check the official website of National Association of Realtors.

– It becomes very difficult for first time home buyers to repay the mortgage, research says. This happens because of inadequate research and planning. Hence, it’s wise to calculate the monthly amount they will be able to repay. There are various mortgage calculators on the web available today.

– Another thing people often fail to consider is the total cost involved in buying a new home. Along with the cost of home, buyer has to pay many types of taxes and insurance to own the house. This may sound quite insignificant, but these things can cost you dearly. In few areas, taxes are twice the mortgage amount. You don’t want to fall into such traps, do you?

To avoid such consequences, you can call up the local insurer and check how much insurance will be required for your property. However, finding information on taxes is quite simpler. Log on to Zillow and check how much you will be taxed and where to find a place with comparatively lower prices.

– However, the above costs are just a part of the whole. You will incur many other expenses, which can be summed up as settling costs. There are lender fees, home owner association fees, settlement, and title fees. So, make sure you have included all these costs in your budget. A First-time home buyer must keep this in mind.

– Fannie Mae suggests you must plan a budget before you plan to relocate. This is because there are lolls of other costs incurred when you first move to your new place. And approximately 30% of you income is spent on it, which can ultimately earn you a title of ‘house poor’.

– Spend some time researching on the local information. It’s advisable to know about the local weather, change in temperatures, movement of real estate prices, etc.

– People believe house is a long term investment. It essentially is till the time you maintain your costs effectively. However, if you fail to manage these expenses, you will end up paying more than you will earn, in long term.

So, buying a home is certainly good news. But not considering these points can transform it into a bad news and eventually, a bad deal. These are must-follow tips for first time home buyers.

by stephanie johns

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Government Announces $1.5 billion Housing Fund to Five States

Posted on February 22, 2010. Filed under: Homeowners, Real Estate News & Updates, US Housing News | Tags: , , , , , , , , , , , , , , , |

President Barack Obama announced a new housing fund that would be given to five states hit by the housing crisis. The total corpus involved is $1.5 billion which would be spilt amongst these states based on their demands and requirements. The five states are Michigan, Arizona, California, Florida and Nevada.

They are the ones that have been the hardest hit by the recent foreclosures during the financial recession. They have seen the house prices fall by as much as 20 per cent. Out of the 5 states, Michigan is the least hurt.

The money is allotted to stop the number of foreclosures being filed on those states. The money will be given to the unemployed homeowners, who would then be able to pay to the banks. It would also help the struggling borrowers.

A year ago, president Obama declared a $75 billion Home Affordable Modification Program, to solve the same problem. A research shows that it has helped only 116,000 homeowners across US. Another 830,000 are still under trial.

The move is the administration’s latest attempt to fix its signature foreclosure-prevention effort, the Home Affordable Modification Program, which has been widely panned for not doing enough. A senior Obama official cautioned that the new program is just another tool in the White House arsenal, not a full solution to the housing woes facing the unemployed and borrowers.  “As important as $1.5 billion will be to these five states, it’s not going to solve what is a catastrophically large problem,” said the senior official, speaking to reporters on a conference call. “It’s going to help as many of the other programs do.”  The senior administration official was vague about how the money would help the target audiences, saying mainly that these groups are intimately involved in their local housing markets.

The current amount will come from the $700 billion Troubled Assets Relief Program (TARP), which too has faced its share of critics.

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Make money in 2010: Your home

Posted on February 22, 2010. Filed under: Homebuyers, Homeowners, Ideas & Information, Real Estate News & Updates, Tips, US Housing News | Tags: , , , , , , , , , , , , , |

After three years of slumping house prices, the end of the real estate bust may finally be in sight. Home sales are rising, inventories are shrinking, and most economists believe values nationwide will hit bottom in the second half of the year — but not before falling another 5% to 10% first.

Prices after that should stay mostly flat until 2012. “Next year will clearly be better than this year,” says Mike Larson, a real estate analyst at Weiss Research. “Prices may drop a little more, but the lion’s share of the damage is behind us.”

One positive byproduct of the 30% plunge in prices since the 2006 peak: Houses are now more affordable than at any time in the past two decades, according to the National Association of Home Builders — good news for anyone looking to buy.

Then too, mortgage rates, now at 5.15%, should stay low for the first few months, thanks in part to the Federal Reserve’s ongoing purchase of mortgage-backed securities. But if the economy really picks up steam and inflation fears resurface in the second half of the year, rates could rise as high as 5.25% to 6.5%.

If you hope to sell your home or rebuild lost equity, there’s new hope. One plus is that Congress has recently extended the first-time homebuyer credit, and even expanded it to include those with higher incomes and current homeowners.

But with layoffs high, defaults should remain problematic, hitting wealthy areas even harder next year, says Joshua Shapiro, chief U.S. economist at MFR, a consulting firm. In fact, 30% of recent foreclosures were on higher-priced homes — nearly double the 2006 rate.

Wild card: If the Fed stops buying mortgage securities in March as planned and private investors don’t step up, rates could spike to 6% or higher sooner and faster than expected, slowing demand and pushing prices down.

Signs to watch: Steady growth in single-family housing permits (track it at census.gov) indicates that builders believe buyers are returning to the market.
The action plan

Buyers: Make your move now. Have you been on the sidelines waiting for prices to go lower before house shopping and bidding in earnest? Don’t hold off much longer.

“The market will remain tilted in favor of the buyer over the next year, but that power will gradually be reduced as conditions in the housing market improve,” says Larson at Weiss Research. You’ll have plenty of homes to choose from as foreclosures continue to pile up and more homeowners list their houses in an improving market. Be sure to keep a close eye on mortgage rates. If they rise sharply as the Fed’s mortgage buyback program draws to a close, act quickly to lock in a low fixed rate.

Anyone looking to buy or invest in a lower-priced, entry-level home should expect competition. Put down as much cash as possible (many investors are offering to make all-cash deals); come in below the listing price and there’s a good chance you’ll lose to another bidder.

But demand is much softer for middle- to top-tier homes, particularly those priced above $500,000. The supply is greater too, so you’ll be in a stronger bargaining position. Offer at least 10% below what comparable homes have sold for lately (your realtor can supply this info). That way you won’t take a hit if prices of higher-end homes fall another 10% or more, which is very likely, Shapiro says.

Sellers: Postpone listing your home, if possible. Sellers next year will be unloading property at what’s likely to be the very bottom. Ouch. Hold out for a few more years, so you’ll compete against fewer foreclosures, increasing the chances your home will fetch a higher price.

Delaying your sale isn’t an option? Act fast before prices drop further. To expedite a sale, don’t try to compete on price with foreclosures and short sales (when the bank allows owners to sell for less than they owe on their mortgage); most of the time, you can’t win. Instead play up your home’s strengths. Foreclosures typically need a lot of work, and short sales can take months. So make necessary repairs, throw in a paint job and new carpeting since buyers may be short on cash after the down payment, and offer a fast and flexible closing date. That will attract people willing to pay more for a home that’s in move-in condition and a deal they can close quickly.

Owners: Look into refinancing, and rein in spending on home improvements. You’re a prime candidate for refinancing if you have an adjustable-rate mortgage and will be in your home for at least five years. There’s no reason to wait; you won’t get a better deal than you will now.

As for fixing up the place, now’s not the time to spend serious money; since prices aren’t likely to snap back soon, you won’t see much of a return on your investment. Focus on lower-cost cosmetic fixes, like painting and landscaping, and basic projects that improve functionality and design, such as adding molding or doing a basic bathroom remodel.

Source article: Amanda Gengler, Money magazine writer

This is brought to you by Janard Capital LLC

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