« July 2009 »
S M T W T F S
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31
You are not logged in. Log in
Mortgage Articles
Monday, 1 January 2007
The Facts About Mortgage Payment Protection Insurance
Topic: Mort Protection Insurance

Mortgage payment protection insurance is designed to do for your mortgage what disability insurance does for your pay check. Your disability insurance means you get paid even if you can't work; your mortgage payment protection insurance will make sure that your mortgage will get paid, again in the case that you can't work.

The difference between disability insurance and mortgage payment protection insurance is that the mortgage payment insurance will also cover you in the case of being laid off because of "redundancy", as well as accident, sickness or disability.

You need to get the level of coverage that properly covers you. Your mortgage payment insurance should provide enough income to cover all your monthly mortgage expenses. If you have a repayment mortgage, this should be your capital and interest repayment. If you happen to have an interest-only mortgage, the Mortgage Payment Protection Insurance should cover your interest payment as well as your normal monthly contribution to the investment vehicle that will repay your loan. It's that simple.

What are some of the reasons that some people are starting to take an interest in this kind of policy? Well, let's face it: our mortgage is likely our largest debt. Some two-income families could survive quite well on a single income if not for their mortgage payment. In the case when you or your spouse does not have disability insurance either through an employer or privately, a mortgage payment protection policy may be all that you need in order to ensure your family's financial stability.

Don't confuse mortgage payment protection insurance with mortgage protection insurance. In the US insurance market, these are two different products. Mortgage protection insurance is actually a kind of life insurance on your mortgage. For a flat monthly fee, if you or your spouse dies (assuming that there are two of you on the mortgage and deed to the home) then the mortgage will be paid off by the insurance company. In fact, it is really just a kind of life insurance, but the benefit is limited to the amount of your mortgage.

Since your mortgage is a declining balance and you pay a flat monthly fee based on the original amount, it can be very overpriced insurance. Also, it doesn't address any of your family's other financial needs in case of a death. So, you could end up needing both life insurance and mortgage protection insurance.

In most cases, you would be better off buying term life insurance for each spouse that covers the amount of the mortgage and whatever additional financial requirements that you have. As the mortgage balance declines, you can reduce your term life coverage and potentially save money. If only one spouse works, you may even find that it is sufficient to insure only the primary breadwinner with one policy that will address the family's total needs.

 


Posted by TheBlogMachine.com at 12:28 PM EST
Updated: Monday, 1 January 2007 12:28 PM EST
Friday, 2 June 2006
Get Pre-Approval Before You Shop
Topic: Get Pre-Approved

We've said this on other pages for this site and we'll say it again; the best way to start home shopping is buy getting pre-approved for a mortgage. While most of us would prefer to start by looking at houses, it can set you up for disappointment. How can you really shop effectively if you don't know what your budget will be? Getting pre-approved tells you what size of mortgage you can qualify for, and let's you start to do some of the math for yourself.

Frankly, you may also find that you can qualify for a mortgage amount that you really don't want or need. We've seen people who have qualified for up to 6 times their annual salary! While it's nice to know that the lender trusts you to be able to handle that amount, do you feel able to handle that amount? If not, take some time to figure out payments and interest costs and such, and then reduce your house-shopping budget accordingly. (We did. When buying our last home, we decided the size of mortgage we wanted FIRST. Then we went house hunting. Our mortgage payments are easy for us to meet, and we haven't had to give up our yearly vacations.)

The pre-approval process will give you a lot of information, if you ask the right questions. You'll be able to get your own credit score, and see how that translates into a good or better interest rate. As a prospective buyer, you should go to a reputable broker, lender or banker, who understands such things as credit, credit scores, mortgage funding and debt-to-income ratios, in order to get the best information possible. That lending professional can help you figure out very closely the interest rate your credit score entitles you to, how much you are likely to be able to borrow and how much cash you may need for a down payment and closing costs.

All this work up front can save you from some nasty surprises later.

Another really good reason to secure financing before beginning your home search is you may find out you are qualified for special programs! This can help you to have more budget for your home than you would have expected, and also save you money. For instance, a high credit score can qualify you for low down-payment loans or even no down-payment loans through programs such as the FHA. If you are short on cash, you might find that lower down-payment requirements allow you up to buy more house than you thought you could. Always keep in mind that a lower down payment is likely to translate into a higher interest rate.

A final good reason to set up financing first: what if the home of your current dreams comes up on the market, and you aren't prepared to make an offer? In such cases, you can lose a property to another buyer who is ready to make an offer.


Posted by TheBlogMachine.com at 1:39 PM EDT
Grab a Clue - (CLUE is the Comprehensive Loss Underwriting Exchange)
Topic: Grab a Clue

What the heck is CLUE? No, it's not the board game you played as a kid; CLUE is the Comprehensive Loss Underwriting Exchange and it tracks insurance claim histories of both people and properties. As a result, it can be a roadblock to you and your dream of home ownership.

How can CLUE work against you? Well, even if you've never claimed on a homeowner policy before, you could find yourself being denied coverage on your new home because the home has a bad CLUE record! What this means for you is that you'll likely be denied a mortgage, as home insurance is a prerequisite for most lenders to give you a mortgage.

What if you don't need a mortgage? You can still have problems with a poor CLUE record on a home. If you are denied coverage, you have one of two options: you can pay excessively high premiums to get your property protected or you can go without insurance coverage at all. Either option can be expensive and risky.

This can be a real shock to people who have a good insurance history. Most of us who have had insurance assume that insurance on our new home will be routine. CLUE means that you can't depend on that. In fact, you may even have an insurance certificate issued and in hand, and find that the insurance is denied after you have closed. Then, you could be in breach of your mortgage contract, which generally requires home insurance.

So how does CLUE work? CLUE keeps record of a homeowner's insurance claim for 5 years. They actually report on claims for about 30 kinds of losses, from wind damage to dog bites. So, the database not only covers problems with the home itself, but liability claims too. More than 600 US insurers, or 9 out of every 10, provide and share data via CLUE.

An insurer will request a CLUE report just before issuing a policy. The timing causes a serious problem for the buyer. The insurer might be unwilling to issue a policy, or the premium might go up, substantially.

So, you can just ask the seller if any claims have been made, right? Wrong. If the seller has owned the home for less than 5 years, the claim may have been made previous to that person owning the property. Further, since CLUE is relatively new on the insurance market, it may not have affected that person's insurance. But it can still affect yours as the new buyer.

What can you do about this? At the present time, your best bet is to have your purchase contract written properly. It should say that you have the right to receive and review the CLUE report on the property to be purchased before closing the deal. A similar technique is to require in the contract that the owner provide a CLUE report well ahead of closing and that closing will be conditional on your review of the CLUE report.

What about if you are the seller of the home, and you've found out that your property has a negative CLUE report? The only thing that will fix this is time. It will be 5 years from when the claim is made until it ages off the report. You may have to hold onto your property for this time, in order to be able to sell.


Posted by TheBlogMachine.com at 1:36 PM EDT
Thursday, 1 June 2006
Your Credit Score Will Affect How Much House You'll Be Able To Buy...
Topic: Effects of Credit Scoring

Here's How Your Credit
Score Will Affect How
Much House You'll Be Able
To Buy...

There is a new "buzzword" in the mortgage industry.

Actually, it's two buzzwords: Credit Scoring.

In their never ending search to find an easier way to rate a person's financial ability, mortgage companies are using a new system called credit scoring (Also called "FICO" scores - I won't even tell you what that means).

When lenders pull up your credit report, they can look at
all of the debts that you have, how much you owe, how well you make your payments, and many other things like if you've had any bankruptcies within the last several years.

With your credit report, lenders now get a "credit score" which takes all of this information and creates a "credit score" for you. This credit score is a number that lenders use to decide which types of loans that you will be able to get and be eligible for.

As with all new things, there is controversy over these credit scores.

Some types of loans require that you have a certain credit score to get the loan - no exceptions. And credit scores change over time. As a matter of fact, just applying for credit can lower your credit score.

Now that you know what a
credit score is, here's how
to make sure you have the
best one possible.

First of all, don't apply for any new credit cards or consumer loans.

Don't go down to the furniture store and take them up on the "No interest, no payments, no nothin' for one year" financing program -- and of all things, don't go out and finance a car!

You can do all of these things after you buy your house and get your mortgage, but for your own sake, don't do it before. Buying things on credit not only hurts your credit score, but it also leaves less money for you to use as a house payment.

And lenders look at this figure also to determine how much money they will lend you, and how much they will charge you to lend it.

So wait until after you've bought your home and moved in to get that new couch or big screen TV-- And there is another reason to wait.

After you buy your home, you can get a loan for up to 125% of your home's value to buy whatever you want.

And when you get a loan against your home, all of the interest you pay is tax-deductible!


Posted by TheBlogMachine.com at 11:35 AM EDT
Save Thousands Of Dollars In Interest
Topic: Save Thousands

Here's A Way You Can
Save Thousands Of Dollars
In Interest and Pay Your
Mortgage Off Years Sooner!

Most people think when you get a mortgage you're stuck with it for 30 years, but what they don't realize is by using a couple of easy and painless ways to make some extra principle payments you can cut years off the life of your mortgage and save thousands of dollars in needless interest costs.Here are a couple of easy strategies you can use:

1. Round up to the nearest hundred


This is an easy strategy to take advantage of, and the results are dramatic!

Let's say you have a mortgage of $100,000 over 30 years at 8% interest. The monthly payments would be about $734 dollars a month. Now, let's see what would happen if you rounded that payment to the next $100 by increasing your payment by $66 extra each month.

Just this one simple strategy will save you over $48,000 in interest payments over the life of your mortgage, but it will also shorten the length of your mortgage by 7 1/2 years!


2. Use Your Income Tax Refund To Make One Time Pre-Payments

Let's say you have that same $100,000 mortgage, and you have a $1000 tax refund this year. [very possible with your new homeowner deductions] If you take that $1000 and apply it to your mortgage. You'll save over $8600 and shorten your mortgage by 1 year and 1 month! Not bad for a simple one time pre-payment.

3. Start Out With a 15 Year Mortgage

One of the best things you can do -- if you can afford it -- is to start out with a 15 year mortgage instead of 30. It's actually not that much more expensive, and the interest you save is incredible.

With the same $100,000 mortgage at 8% over 15 years, your payment would be about $200 more ($955) and you would be paying $72,017 in interest over the life of your mortgage instead of $164,160!

That's worth considering.


Posted by TheBlogMachine.com at 11:30 AM EDT
How to Make Your Home Show Like a Model Home
Topic: Making Model Homes

Why Buyers Love Model
Homes And How To Make
Your House Show Like One

One of the major factors in getting your house to sell quickly is simply put; make it attractive.

Most buyers select their home based on emotion and then justify the decision with facts, so it's important to make the house inviting and pleasant.

Yours is not the only property the prospective buyer will see. You are competing with model homes, homes that have been professionally decorated and homes that have no children, not pets and Mr. and Mrs. Perfection as owners.

Start with the outside.

Are shrubs overgrown? Oil in the driveway? How does the grass look? Do the flower beds need weeding and mulching? Try very hard to see your grounds through an independent observer's eyes. Trim the shrubs or plant new ones if they are lacking. Houses with no landscaping in the front lose thousands of dollars of value in the mind of the buyer. Adding a few well-placed blooming flowers also adds appeal.

If the grass in the front yard is particularly non-existent, consider sodding. Do some price shopping on this; sod is not cheap but there are some good prices available. Let's say it cost $600 to sod the front yard, but your house payment is $800 per month. If you save one month of selling time, you are $200 ahead. (By the way, you can probably get away without sodding the back yard.)

Kitty litter in the driveway will absorb the oil and grease stains. (Then remove the kitty litter.)

Next, go around and clean up the yard. Remove any toys, tools and/or building supplies. Here's the acid test: if you don't see it in a model home yard, don't have it in yours. That goes for the bag of charcoal by the grill, too; however, the (non-rusty) grill can stay. If your grill has rusted, remove the rust spots by scrubbing with a wire brush or with coarse steel wool dipped in kerosene. After the rust is removed, clean the entire piece with mineral spirits. When the grill is completely dry, paint with a brush or spray paint.

Now look at the exterior.

Is the paint fading or chipping? Is the color outdated or too personal? Is mildew or mold growing?

If the house needs painting, choose a neutral color. White, cream (not yellow) and light gray are good colors for appealing to most people. If you want some ideas for paint combinations, go look at 3 or 4 model home communities that cost $20,000-$50,000 more than your neighborhood and copy one of them.

One last note on painting: always give the front door and door trim a fresh coat of paint or stain even if you paint nothing else. Buyers stand at the front door waiting to get in; give them a good first impression.

Now let's go inside.

Go through room by room and pack up 30% of the accessories. If you doubt the wisdom of this, go back to those model homes and compare their countertops with yours, their coffee tables and end tables with yours. See what I mean?

The cardinal rule is this: "The way you live in a home and the way you sell a home are two different things." I know this will take some time and may seem like a nuisance, but remember you are in competition with other properties. He who wins the Good Housekeeping Award probably sells his house first... and for the highest dollar. Also look at it this way, you are going to be moving anyway, so just consider this advance packing. By the way, label the moving boxes and stack them easily in the garage - floor to ceiling.

Specifically, pack any collections and family photos you have displayed. Too much of your personality in evidence does not allow for the potential buyer to "mentally move in."

Pack everything from the cabinets and all closets that you do not need on a routine basis. You want to create the perception of roominess. In the linen closet, remove everything but a week's worth of linens. Fold them neatly and color coordinate them. I'm not kidding; this is the stuff sales are made of.

In the clothes closets, remove out-of-season clothes. Pack them away and put them in the garage. Arrange your shoes neatly. Hang your clothes by category: all blouses together, all shirts together and so on.

Now take another walk around the house. Are there rooms that are cluttered with too much furniture? Remove extra chairs, side tables and maybe even the 100" sofa which is really too big for the room. (Notice how decorators use small pieces of furniture.)

Minor redecorating is recommended. If your carpet and vinyl are outdated colors or style, change them. Off-white carpet and vinyl are best; this makes the rooms look larger and cleaner. If the existing carpet padding is 5/8" thick or more and is not worn down, reuse it (unless the pets have done a number of it). If replacing the pad, select a very thick one and then install just a modest grade of carpeting. The feel will be plush and expensive but it's not.

If carpeting is in good condition and neutral in color, have it cleaned.

If your vinyl flooring is worn or outdated, replace it with off-white vinyl. If the vinyl is in good condition and light colored, scrub it thoroughly paying special attention to buildup of dirt or wax around the baseboards and in corners.

Off-white painted walls are best.

If painting is required, use flat latex except in kitchens and baths where you will use semi-gloss latex. If walls are dirty, experiment to see if scrubbing them is easier than painting.

If you have wallpaper, make sure it is clean and up to date. If not, strip it. (Hint: some wallpaper is easy to strip if first sprayed with window cleaner.) After stripping it, either paint or re-wallpaper, depending on the condition of the walls. Sponge painting is also an easy, attractive alternative.

Repair badly cracked plaster, loose door knobs and crooked light fixtures. Correct faulty plumbing. Leaky faucets can discolor porcelain and call attention to plumbing defects. To remove mineral stains from such leaks, pour hydrogen peroxide on the stain, then sprinkle with cream of tartar. Leave this for 30 minutes before scrubbing. Bad stains may require 2 or 3 applications.

Next, make your house sparkle.

If you do not have time for the inclination, hire someone to thoroughly clean the house. Clean windows inside and out. Clean with white vinegar using newspaper. Clean mini-blinds, curtains and drapes.

In the kitchen, clean appliances inside and out. Remove grease and grime by scrubbing with undiluted vinegar. Scrub the inside of the refrigerator with baking soda; not only does it not scratch, but it removes odors. Get rid of kitchen odors by pouring hot salt water down the drain twice a week. Grind citrus peelings or apple cores in the garbage disposal. Leave a small uncovered container of vinegar in the corner of your kitchen counter.

Have bathrooms scrubbed to pass a white glove inspection. If tubs or sinks are rusting, have them reglazed. Clean grouting of the tiles with Tilex. Recaulk the tub and shower. Clean fixtures with white vinegar. If you are at home, light a small candle for atmosphere and pleasant (not overpowering) aroma. Hang a set of designer bath towels on the most prominent rack complete with verbal instructions to your family not to use them! (Remember, you're in show biz now.)

Pets should be out of sight and out of smell.

If you have pets, you need to get rid of pet odors and it is recommended that the pets themselves be kept out of the way and out of the house during showings, if possible. Some people are uneasy around animals and they may detract from the prospect's attention. Getting pets out of the way is, unfortunately, much easier than getting pet odors out of the way.

If flooring has been repeatedly stained with animal urine, you'll probably have to replace it to get rid of the smell. And that means the carpet, the pad, the carpet strips and the baseboard trim, the sub flooring will need to be treated to kill the odor. Put a small uncovered dish of vinegar in the room where your pet sleeps; this will remove "doggy" smells. Of course, put the dish off the floor so the dog doesn't drink the vinegar! To absorb odors in the cat litter box, add a cup of baking soda to the litter.

Food smells can work for you or against you. Baking bread, cookies and pies all smell good. Spaghetti sauce is a delicious smell. Frying fish or liver and onions is objectionable. And of course, now days the smell of cigarette smoke is offensive to many. If your house has an unpleasant smell, use scented candles or fragrant fresh flowers.

Finally, tackle that thing called the garage.

This area is the catch-all where everything goes that has no place to go, so it is usually a mess. Therefore, if your storage area is neat, one would surmise that you must really take good care of the whole house. Now you are going to say I am becoming extreme, but believe me, this works every time. Empty everything out of your garage. Hose down the floor, if

there are stains remaining, paint it porch gray. Paint the garage walls off-white using a flat latex paint. If the hot water heater is in the garage, wipe it down so it looks brand new. Polish the copper pipes.

Now - after the paint is dry - put everything back in the garage piece by piece. Throw out what you will not be taking with you. Pack what you can and add to the stack of neatly labeled boxes. Then organize what's left. If you have a storage shed, organize it the same way and if needs a coat of paint or stain, do it. An open bag of charcoal will absorb moisture in the storage shed.

If you have too much "stuff" for the shed, rent a small storage unit. Un-cluttering can make all the difference in the world.

Lighting plays an important part.

During the day have all your curtains and blinds open. If the day is cloudy, turn on all lamps as well.

At dusk, put blinds down but leave them open. Leave drapes open. Turn on all lamps and Overhead lights.

At night, use the same lighting formula as above but close all the blinds, curtains and drapes. Adding candlelight is very effective.

Turn off the television during all showings of your house as they are distracting. Put on soft background music. Once you have "set the stage", leave the house for the agent to show it. Prospects can more easily look at the house with no distractions. They will also feel freer to ask questions of the agent. Finally, buyers can mentally move in better without the current owners around.


Posted by TheBlogMachine.com at 11:24 AM EDT
5 Expensive Mistakes Home Sellers Make...
Topic: 5 Expensive Mistakes

Here are 5 Expensive
Mistakes Home Sellers
Make...

Mistake #1:
Basing price on needs or emotion rather than market value.

Many times, people make their pricing decisions based on how much they paid for or invested into their home. This can be an expensive mistake. Overpriced homes take longer to sell and eventually net the seller less money. Consult with a professional real estate agent. They can assist you in pricing your home correctly from the beginning.

Mistake #2:
Failing to "Show-Case" their home.

First impressions are the most important. Experience shows that for every $100 in repairs that your home needs, a buyer will deduct $300-$500 from their offer. Thoroughly clean and prepare your home before you put it on the market if you want top dollar.

Mistake #3:
Signing a listing contract with no way out.

Most traditional real estate agents want you to sign a listing contract with no way out. When you list your home with me, you can cancel your listing agreement at any time, no questions asked.

Mistake #4:
Choosing the wrong agent for the wrong reasons.

Many homeowners list their home with the agent who tells them the highest price. Or they list with the agent who works for the biggest company. You need to choose the agent with the best marketing plan and track record to sell your home.

Mistake #5:
Not knowing all of their legal rights and obligations.

Real estate law is complex. The contract that you will sign when selling your home is legally binding. Small items that are neglected in a contract can wind up costing you thousands of dollars. You need to consult a knowledgeable professional who understands the in's and out's of a real estate transaction.

Here are 5 Expensive
Mistakes Home Buyers Make...

Mistake #1:
Not knowing how much mortgage
they can afford before they make an offer.

The easiest way to avoid this mistake is to get pre-approved for a mortgage by a lender so you know in advance exactly how much you can afford. Most pre-approvals are free and it will give you a basis to make a more informed purchasing decision when you find the house you like.

Mistake #2:
Not realizing in advance who the real estate agent represents.

Most people think that the agent they are working with is working for them. But unless they are working as your buyer representative, they represent the seller.
There are different types of agency relationships you can have with a Realtor, make sure that you are clear on your options.

Mistake #3:
Not realizing that the wrong mortgage
can cost thousands of dollars in needless interest and taxes.

Check with your accountant before you make your final decision on which mortgage you are going to choose. Your CPA will be able to tell you what the long term effects will be on your income, your taxes and the equity you build in your home over time.

Most people aren't aware that with a standard 30 year mortgage they will be paying two and a half times the amount of the mortgage in payments. With some planning in advance and a simple strategy they can cut the amount of interest they pay dramatically and own their homes sooner.

Mistake #4:
Not discovering hidden defects before they buy a home.

One of the most expensive mistakes is also one of the easiest to avoid, by having a professional pre-purchase home inspection. Don't get stuck with a money pit. The cost of a professional home inspection is usually a few hundred dollars, but the peace of mind it can give you and the expense you can avoid needlessly is in the thousands of dollars.

Mistake #5:
Not knowing how much their credit
can affect their ability to buy or refinance a home.

Before you buy a home, many of the clouds on your credit history can be cleared up or even eliminated. Your mortgage professional can help you review and prepare your credit file in advance.


Posted by TheBlogMachine.com at 11:21 AM EDT
Sell Your House in 24 hours
Topic: Sell Your House in 24hour

Here's How You Can Sell
Your House In As Little As
24hrs -- Without Ever
Putting It On The Market!

There is a principle in psychology called scarcity -- it's the desire that's in all of us to want something that we can't have.

There are some strategic ways that this principle can be applied to a real estate situation.

That's right I said applied -- you can actually control it..

Often, the illusion of scarcity can be orchestrated and often appears in real estate situations without people even knowing that it's there.

Have you ever heard of a situation where a home was on the market and more than one person was interested in it?

In most cases like this, the house will sell for more than the owners are even asking for the house -- and the buyers feel great about it because they won. Someone else wanted the house, but they got it.

Situations like this are called the auction effect.

To create this powerful situation requires creating an environment where as many buyers as possible are made aware of the property at the same time and under the right circumstances.

As you know now, most of the time when a property is advertised in a traditional way, it's almost impossible to create this kind of environment, because your property is just another property on the market.

You need to be able to reach buyers in a way that you are presented as "new information"...

One of the things I do to create this situation is profiling your house in my MarketWatch database before you even put it on the market.

I started looking for the buyer for your house about 180 days ago and I keep in touch with these buyers through an exclusive bi-weekly report that I send them to keep them up-to-date on all the new houses that come on the market -- and new houses that will be coming on the market soon that they would have no other way of finding out about.

We may be able to find the buyer for your house without ever having to put it "on the market"!

By the way, Scarcity is just one of the six weapons of influence that can be skillfully applied to the marketing of your home.

I'll tell you about the others when we get together...


Posted by TheBlogMachine.com at 11:12 AM EDT
Wednesday, 31 May 2006
The Most Common Mistakes Home buyers Make
Topic: Most Common Mistakes

The Most Common Mistakes Home buyers Make

Home buying mistakes are most people's nightmare. After all, your home is most likely to be your one biggest purchase in your lifetime. If you make a mistake, it can be costly.

Here is a list of 10 common home buyer mistakes

  1. You didn't do your homework!

    You need to have some knowledge on your side before you go house hunting, otherwise an unscrupulous person in the process can take you. There are many places to find good information (including this site!) A little time spent becoming knowledgeable can save you a lot of heartache (and potentially money) later.
  2. You were more focused on making a shrewd investment than buying the right house for you and your family.

    Here's one that's easy to fall into. However, the bottom line is that you should be buying something to live in. The housing market is tough to anticipate, just like the stock market. If you buy to stay for a long time, you'll win over the longer term.
  3. You've forgotten to keep good location in mind.

    Let's face it; one of the most important things for you and your family is a good location. Your home should reflect your needs. However, no one needs to have a home on the busiest street or with a shopping center in your back yard. Pay attention to good access to services that you need, while also keeping in mind that you are likely to see a better return on your purchase with a good location.
  4. You overlooked an inferior floor plan for an attractive exterior.

    While you want your home to look good on the outside, the most important space is inside. You want a livable home that gives you the space and amenities that your family needs.
  5. You overlooked how the house will function for your family.

    Let's take an example: you've purchased a home with a large formal dining room, but no other eating area, and you've got 2 children under the age of 5. Clearly, this house isn't going to work for your family unless you have children that are much cleaner eaters than the average. Keep in mind how you really live. Would you be happier with an eat-in kitchen? Do you need a home office? Pick your home accordingly.
  6. You didn't have your resale home inspected before you bought.

    Oh, oh. What if you just got a lemon? In the same way that you should have a second-hand car checked over by a mechanic, you should have your "new to you" home inspected. You don't want surprises when you are moving into a home. The cost of the inspection is a fraction of what a major repair could cost you.
  7. You didn't check the builder's reputation when purchasing your new home.

    The quality of your home is completely dependent on that builder. Get the wrong one and you can end up with serious problems. In our own file of builder problems is one woman who spent over 10 years trying to get a bad builder to fix all the problems in her home. Don't lose time and money. Talk to people who have purchased from the same builder. Check on the Internet for consumer sites that deal with homebuilders. Speak with your local Better Business Bureau. A bad builder can be a very costly mistake.
  8. You've lost out because you lost your patience.

    Buying a house is a big decision. Spend all the time you need. Many people spend weeks and months researching the latest digital gadget they've fallen in love with, and want to buy a house in a week! If you jump into the market because of impatience, you can make a bad decision.
  9. You're waiting for a better market, or interest rates.

    While this can be a good strategy in some situations, if you can get into the market, it's usually better to get in. Just buy within your means. Don't end up remorseful because you didn't buy when you had the chance.
  10. You decided not to buy at all.

    Really? If you can afford a home and you don't make the purchase, you'll lose the benefit of tax deductions, building home equity and appreciation. If you can buy, do!


Posted by TheBlogMachine.com at 10:03 PM EDT
When You Shouldn't Buy a House
Topic: When You Shouldn't Buy

When You Shouldn't Buy a House

There are times when you shouldn't buy a house, no matter what your real estate agent or mortgage lender might think. It can be a good decision to continue renting and then buy, depending on your financial situation.

So, how do you know you should wait?

If your financial situation is at all shaky, don't buy. You should really be thinking twice if you work in a job that is not secure. It's true that most of us can't count on job security, but if you are on unstable ground with your employer or if there is a chance that your employer could be filing for bankruptcy soon, you aren't in the market.

You should even think twice about buying if you are planning on changing jobs soon. If you have your resume on the street and head-hunters calling, you could be half way through the home buying process and suddenly have another job. Lenders don't like this much. In general, lenders tend to treat a new job within the previous six months as a credit risk factor.

If you are buying a house solely for an investment, you might also want to think twice. If you need your money out quickly, you could end up taking a considerable loss, particularly if you have paid for points and other expenses in buying the property. If you are speculating and properties take a substantial drop in value, you could be ruined financially. If you buy a property for investment purposes, you should have reasonable expectations, and generally it's much safer if you are in it for the long haul. This means that any money you put into an investment property should be able to stay there for at least 10 years. Otherwise, don't buy.

If you are looking for the house of your dreams, and will have to sink every cent into it in order to buy it, don't buy. If every spare nickel you have is going into your house, you are unlikely to have money left over for needed repairs and emergency savings for you and your family. Unfortunately, when families get into trouble, often the first thing to go is the house. If you are renting, you can downsize into a smaller apartment fairly easily. If you own your home, you can get caught, especially if the market is not good for selling. Think twice if you will be stretched to your limit financially.

Have you just emerged from bankruptcy? Again, this is not the right time to buy. Taking even a couple of years to re-establish a good payment history and a solid credit footing is time well spent. You will end up with much better interest rates on your loan when you do buy; keep in mind that rates and terms on sub prime mortgages run considerable higher than they do on a "conventional" mortgage for a person with a better credit rating.

While you are re-establishing your credit history, be sure to check your credit report on a regular basis; it should be at least once a year. Make sure that your good payment history is documented. Also be sure that any credit problems are removed in a timely fashion. You want to ensure that you can finance a mortgage later at a good rate.

Another reason to wait? In 2005, many experts are saying that the US housing market is overheated and due for a major correction. While you are making sure your financial house is in order, you might just find that the house of your dreams has become more affordable.


Posted by TheBlogMachine.com at 10:01 PM EDT
The Most Frequently Asked Questions About Title Insurance
Topic: FAQ's on Title Insurane

The Most Frequently Asked Questions About Title Insurance

Many people don't know what title insurance is or what it can do for you. We've got a list of frequently asked questions about Title insurance that should help you decide if it's something you need to have.

  1. What protection does Title insurance give me?

    The primary purpose of Title insurance is that it insures that the "record" title is good. That means that the title is accurate, and the rightful owner is on that title. Title insurance does cover for a number of other problems with a title, including forgery, identity of parties, incompetence of former owners, interest of missing heirs, and status of individuals not having the "right" to sell property.
  2. What risks aren't covered?

    The standard owner's policy and standard mortgage policy are based on public records of the recording district in which the land is located. It won't protect you from problems that would only be revealed by an inspection of the property. This is only about problems that could be presented in the public records. Therefore, it does not insure against unrecorded easements, liens or money obligations, unrecorded utility rights of way, public or private roads, community driveways and other types of encumbrances, or against the rights or claims of persons in possession of the property which are not shown by the public records.
  3. Can I get protection against matters not of record?

    Yes, you can but it will be "extended coverage" and at additional cost. However, at your application the issuing company may specially cover matters that are disclosed by a physical inspection and/or a survey of the property, subject to any exceptions that the inspection will determine to be proper.
  4. Can I get different kinds of policies?
    Yes. Owners' Policies are issued to you as the owner. Purchasers' Policies are issued to you as the buyer of real estate under contract. Mortgage Policies are issued to mortgage companies. However, you can expect that if your mortgage company takes out Title insurance on your new purchase that this will be part of the fees that they pass on to you.
    It may make sense for you to buy both the mortgage and owner's policy, especially if your lender will require it. You may find a better rate for the insurance. Also, special rates are available when both Owner's and Mortgage policies are applied at the same time.
  5. When is my policy issued?

    The Owners Policy is usually issued after the deed to the buyer is 'delivered' and recorded. A Purchasers Policy is usually issued after the signed contract has been recorded. The mortgage policy of title insurance is usually issued after the mortgage or deed of trust has been recorded.
  6. How are my premiums determined?

    Title insurance premiums are determined by the amount and type of coverage provided. Unlike other insurance premiums, however, the title insurance premium is paid only once. At that point, the policy is effective for as long as title or "ownership" remains in the name of the insured, or his heirs or devises. If you have a question about rates, you can get more information. Rates are filed with the insurance commissioner who regulates the activities of title insurers.


Posted by TheBlogMachine.com at 9:44 PM EDT

Newer | Latest | Older

Open Community
Post to this Blog