In most cases, the first home buying transaction is the biggest spending in people’s life. Even a small misjudgment could cost you a fortune. Here are some great tips for those who consider buying their
first home.
Get the numbers right. Calculate and determine what you can afford. It’s said that your monthly housing cost should not exceed 28% of your monthly gross income. Monthly housing cost includes monthly mortgage, property taxes and insurance. Also, the better the ratio of monthly housing cost to monthly gross income is, the better deal you can find in mortgage loan.
Shop around for the best loan and get prequalification if possible. It’s not surprising that it has become more difficult for home buyers to get a mortgage loan. Arrange your financing before shopping. This helps you shop for homes that you can afford. You’ll be also a more attractive buyer and negotiation to lower the price will be easier.
Know your credit standing. The earlier you check your credit, the better you can improve it. Many people find that their credit needs corrections either from their own faults or from someone else’s. When a person’s credit history needs fixes, it usually takes time. Even without any error on their credit, many people want to improve it to get a better mortgage loan. If you need to, find out issues earlier and start to change your spending habits.
Examine housing priorities. Differentiate your “needs” from your “wants”. When you consider your needs, think about how long you will live in your new home. Take that into consideration because having/raising kids or changing a career will definitely affect your life style.
Gather housing information. Read home buying advice, research market information, especially about the location where you’re interested in buying, and real estate policies that may affect your purchase.
Keep it mind that buying home is not the same as buying stocks. Don’t consider your home as a stock investment. Appreciation and depreciation of real estate properties is even harder to predict than stock market. Buying home shouldn’t be for a quick profit.
Read the market, but don’t try to time the market. When you notice the bottom of the market, most likely the market has started to head up.
Washington Report: $15 Billion Housing Market Relief Plan
by Kenneth R. Harney
Capitol Hill was buzzing late last week about what was included — and what got left out — of a sweeping $15 billion housing market relief plan.
Though the final details won’t be nailed down until both the House and the White House weigh in with their own changes, the odds now look good that some sort of bipartisan legislative package will move forward.
Among the key components in the Senate’s initial plan:
Upgrading the FHA mortgage program with permanent new loan limits. The statutory maximum would be increased to $550,000 in high cost markets. That limit would kick in after Dec. 31, when the temporary “super jumbo” limits up to $730,000 authorized by the economic stimulus legislation expire.
A $4 billion fix-up fund to be shared by communities experiencing high rates of foreclosure and vacant, deteriorating houses. The money could be used by local governments to acquire, rehab, and resell the properties to private or nonprofit owners.
One hundred million dollars in additional funding to support housing counseling services that work with delinquent homeowners to avoid foreclosure.
Tougher financial penalties - up to $4,000 per violation - for lenders who do not provide timely truth-in-lending disclosures about loan terms to borrowers.
New federal tax deductions for an estimated 28 million homeowners who do not itemize on their income tax filings. They’d be eligible to take a standardized writeoff of between $500 for single taxpayers, and $1,000 for married owners filing jointly, in lieu of local and state property tax deductions.
Up to $10 billion in new tax-exempt bond authority for local and state housing agencies to refinance subprime borrowers facing payment increases they can’t afford.
A $6 billion tax benefit for home builders, allowing them to write off net operating losses that extend back four years, double the current two year limit.
And finally: A non-refundable $7,000 tax credit for buyers of foreclosed homes. This is intended to be an incentive to get these properties off the market, and into productive use, quickly.
The bipartisan relief effort announced last week drew lots of critics, who were mainly upset by what got left out. Consumer groups were particularly angry that Republicans blocked a Democratic plan allowing bankruptcy judges to reduce borrowers’ mortgage debts to lenders. They also complained that too much relief is going to builders, and not enough to ordinary homeowners struggling to make payments.
However this all finally gets straightened out, Congress clearly is trying to send a message to the voters back home: Hey, we’re really doing something about the housing crisis out here . So please - please — don’t punish us this November.
When I heard about Apartment Real Estate Investment Trusts, I thought this could be possibly a good investment option for my family.
More people are losing their houses, therefore there are more people who are looking for a rent. Those who have been waiting for buying a house step back further and are going to wait more. Some of them might think this is a good time to buy a small rental property, probably a 4 or lesser unit apartment. But a major amount of money is still needed for down payment. There is always maintenance to be done and prospective rental property owners don’t look forward to this.
Apartment Real Estate Investment Trusts could be a good solution for those who don’t have quite that much down payment or those who don’t want to get involved into daily apartment maintenance.
Real Estate Investment Trusts (REITs) are stocks of publiy-traded companies that own and manage rental properties. According to the National Multi Housing Council, these days vacancy rates are going down and monthly rental rates are up. Not surprising.
While the major stock indexes are swinging widely back and forth, it is said that some REIT funds have been scoring better than other regular funds. Real Estate Investment Trusts are considered value-style stocks. Maybe it’s a good time to look into more for undervalued apartment REITs as my 401K or other funds have been losing money anyway.
I need to google more about ‘REITs’ in general and study more about apartment Real Estate Investment Trusts.
