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Friday, 1 November 2013

Tips for First Time Home Buyers

Isa TK+ (Photo credit: Wikipedia)

Tips for First Time Home Buyers

Editor's note: This is a guest post from Darrell Rigley

Now that you are ready to buy your first home, where do you start- How do you make sure that you are getting a good deal on your home and that you haven-t missed anything when choosing the home and making the deal.

Here is a checklist to get you started:

1. Run your credit report and fix any problems found

2. Shop around for your mortgage in order to get the best rate available

3. Get pre-approved for your mortgage - This will tell you how much home you can afford and show potential sellers that you are serious

4. Crunch the numbers - Determine how much each $1000 in price affects your monthly payment

5. Determine your comfort zone - This most likely will be less than you are approved for

6. Check out neighborhoods you wish to live in

7. Determine your must haves vs. your like to haves for you new home - Be realistic

8. Check out the property taxes in your target areas

9. Check with your insurance agent to see how much your homeowner's insurance will be

10. Make sure that your finances are in good order

11. Find a real estate agent that you feel that you can trust and you feel comfortable working with

12. Find a reputable home inspector - Do not let your agent, your lender, or the home seller recommend one. Remember, the home inspector should tell you what you need to know about the home so that you can make an informed decision about buying the home and what to offer

Now that you have the preliminaries out of the way, now is the time to start looking homes for sale. Keep these things in mind while looking:

1. Take a checklist of your must haves and want to haves with you

2. Take a camera so that you can take pictures - After a while, the homes will blur in your memory

3. Remember that cosmetic problems are easily fixed - Do not get hung up on the wall colors or the counter top material

4. Ignore the homeowner's belongings - You are buying the home, not the furniture

5. Pay close attention to cracks in the walls and ceilings, water stains, etc. - These could indicate deferred maintenance

6. Pull up area rugs to make sure that they are not hiding floor or carpet problems

7. Make sure that all of the faucets work

8. Make sure that the home has not been over improved for the area

9. Ask which appliances and window treatments are included with the home

10. Make note of what changes you will have to make such as fencing in the yard for your dog or children

11. Ask about any deed restrictions that could keep you for using the land the way you want - Some homeowners associations will not allow fencing or will restrict which kinds of fencing you can install

After looking a multiple homes, you have finally chosen your new home. Now the fun part starts.

1. Have your agent check to see what comparable homes in the area are selling for or have recently sold for - This will tell you if the asking price is reasonable or not and aid you in deciding what to offer

2. Make a reasonable offer (it can be less than the asking price)

3. Make sure that the final selling price is within your comfort zone

4. Remember that you can ask for the seller to pay some or all of your closing costs

5. Remember that home buying is a negotiation process. Do not be afraid to negotiate with the seller

6. There are times when there are multiple bids on a house. Decide on your top price going in so that you do not get carried away and spend more than you want

7. Go with the home inspector when he does the inspection. Ask questions. Make sure that you know what you are getting with the home.

8. Make sure that your offer has contingency clauses covering financing and home inspection - This will allow you to walk away from the deal should your financing fall through or the home inspection reveal problems that the seller refuses to fix prior to the sale

9. Do not be afraid to walk away - There are always other homes for sale

About the Author: Darrell Rigley is the owner of Loan Reduction Hero. His company performs forensic loan reviews on potentially fraudulent mortgages in an attempt to help families avoid home foreclosures. For more information on loan reduction , please visit www.LoanReductionHero.com

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Simple and perfect Wealth Building Strategies

Building wealth is a long term process through saving money in a proper proportion to proper investment instruments. You can have great wealth saving your money in a disciplinary way using determination, passion to reach your goal. Below are some strategies a person required while deciding to build wealth for a long term rum.

1. Pay your bills properly. To build wealth, it is a must requirement that you should be free from all the debt by properly paying your bills. If you do not set aside money before you start paying your bills, chances are you will never save any many after you pay these same bills. Maximize your contribution to 401k if you are able, especially if your employer matches your contribution.

2. Save as early as possible. The first step for those who are in process of wealth creation is the early saving. Start saving and investing as early as possible. The power of compounding is enormous and each and every day passing without any savings are really reducing your wealth. Of course, if you aren’t able to save much until after your children are grown, you can step up your savings until you retire and still have a decent nest egg.

3. Free from Debt. Debt are the major bottle neck and obstacle in front of a person to stop from building enough wealth. The major cause of debt is it will eat your investments and savings at the end with increasing interests in a compounding manner. I is best to get rid of your debt first before starting a wealth building campaign. If your credit card rate is 14% you will find it difficult to find any investment that gives you a return that exceeds that rate. It would be better for you to pay down your debt first and then implement an investment strategy.

4. Pick The Right Mortgage. If you plan on holding onto your home for a short period of time, select an adjustable rate mortgage as your rate will be lower than a fixed rate mortgage. Use the amount saved to pay down your mortgage quicker; refinance your home if rates begin to climb.

5. Build An Emergency Fund. Emergency fund is a simple term but it can help you till a great extend if emergencies occurring. A best practice is, keep the amount equal to your 9 or 12 months salary in an account where you have access whenever required. Do not withdraw or touch this money unless if there is any emergency and that cost you money from all angles. Without an emergency fund, you will be tempted to take on debt, cash in your retirement accounts, and sell valuable investments. Try recovering quickly from this sort of hit to your wealth without an effective back up plan!

6. Protect Your Assets. Insurance is a must require part to one who is in the wealth creation process. Self protection from any bad situations, medi-claim to self and family, protection against home loan, home and vehicle insurances, all are required in a proper proportion to avoid all the bad situations that cost you money. You can have a healthy portfolio and see it disappear quickly if you are not properly insured.

Instance riches come to a few, but most riches are realized after careful planning and effective management of your resources. You can properly prepare for the days ahead by implementing these six proven wealth building strategies today.

Your valuable feed back or comments on the article shall be highly appreciated.

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Reasons Why a Home Isn't an Investment

Isa TK+ (Photo credit: Wikipedia)

Editor's Note: This is a guest post by Go Banking Rates

Is a Home a Good Investment - Is a House a Good Investment

By definition, an investment is "the act of laying out money or capital in an enterprise or asset with the expectation of profit." So by definition, is a home really an investment? With mortgage rates at a historical low and depressed home prices, it really depends on who you ask.

The self-made, multi-millionaire real estate investor who bought in when homes were cheap would answer with an emphatic yes. But times are different now, and many of those same home flippers and amateur investors are declaring bankruptcy while banks are seizing their assets.

In the wake of one of the worst economic catastrophes ever (and caused by overzealous home purchases), people are finally starting to realize that the era of easy money is gone when it comes to housing. While most people still believe a home is a great investment, there are several good reasons why you should reconsider thinking like most people.

1. Homes Don't Always Appreciate.

Take a look at the major decline that the housing market has suffered from lately. Things are not looking good for millions of homeowners who are now late on their mortgage payments or are already in foreclosure. Try telling them that housing is a good investment.

This recent development only shows how volatile housing can be. Unlike stocks or smaller investments, you cannot sell a home quickly if you needed to.

2. Investment Properties Often Lose Money.

It sounds great to own a second home or investment property. You get the title of landlord, get to brag to people that you own property, and you're finally in charge.

Guess again.

Many people have no clue how difficult managing a property can be, especially in states that often favor tenants over landlords. You could have periods of vacancy, vandalism from horrible tenants and a host of other regulation issues on your hands.

On top of that, maintenance fees and property taxes can cripple you. Have you checked on the price of a new roof or a set of new pipes? It's definitely not the dream many expect.

By the time investment property owners are ready to call it quits, they've either lost money or broke even after years of stress.

3. Returns are Minimal.

Using data from the Case Shiller Index of 10 major cities, The Wall Street Journal ran an article showing that home prices produced a real return of just 1.15 percent a year over inflation.

If you bought a home in one of the 10 major cities in 1994, almost the lowest historical trough for home prices, you would still only come out 2.5 percent ahead of inflation. Compared to stocks and inflation proof government bonds, that's a pretty low return. Factor in other things like maintenance and property taxes and you could have actually lost money.

So the next time you're at a party and someone brings up the abundance of opportunity being presented by the weak housing market, you'll be able to provide them with some facts.

You can definitely come out ahead in housing if you're buying for the long term (about 10 years), but then, isn't that more of a home than an investment?

This guest post was written by Go Banking Rates, bringing you the best interest rates on financial services nationwide, as well as informative content and helpful tools. Subscribe to RSS

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This post was written by a guest writer. If you'd like to add a guest post in Money Hacker, please check out Write for Us page for details about how YOU can share your knowledge with our community.

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Anonymous said...: please back all your statements with data. if the population is increasing at such a fast pace - how can real estate value not increase - especially in the big cities which are coveted by one and all. If real estate is not a premium in big cities why are so may apartment complexes coming up and not individual houses.
I think you statements are valid only for the short term of a few years and not for a period of 5 yrs are later.; May 25, 2010 at 7:08 PM
Sherin@Money Hacker said...: I too agree with your statement in an extend and may able to give an answer. Though, I feel the writer would be the best person to better explain this and already contacted to provide an answer to your query.

Sherin Dev (Money Hacker blogger); May 25, 2010 at 11:22 PM
Phi said...: @anonymous

I am the writer of the article.

You're making generalized assumptions about population increases and resources that just aren't correct. First, although the population is increasing, most of the land in the U.S. is sparsely populated outside of concentrated metropolitan areas. Secondly, home values will not increase because they were massively inflated from 2000-2006. To get an accurate estimate, you should be looking at 1995 levels for homes and increasing it by 5% each year until you get to today.

On top of this, there are other economic forces at work that will prevent housing from recovering. The U.S. has lost millions upon millions of jobs to overseas competitors that will never come back, our manufacturing base has eroded, no one is buying our debt (read: China) and the only companies that make money are technology-based. Our financial services sector has lost its credibility and jobs have also been shed. I'm well aware that Goldman Sachs and their ilk continue to dole out record bonuses, but it's a shill game and no one should take that as a sign that things are going in the right direction.

Lastly, do a search for shadow inventory and foreclosure rates across the country. Aside from the homebuyer tax credit giving a little boost to housing in April, things are going straight down. Finally, read about Japan's lost decade where the government intervened to keep housing prices high. Their stock market still hasn't recovered due to the fraud and faulty government actions. Sound familiar?; May 26, 2010 at 12:51 PM
Edwin | Finantage said...: Anon, you have to realize that the true value of homes has stayed the same while their prices have inflated dramatically. If you want data just look at the price to rent ratio (https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhA6Q3eKDfItyd1CkCLKwJgXCXoyixNK0m5gywoObcS2jPUxbdK6VPRH8QSKEAiu9isTNv9T22_I-RqyfiUHPf7RhTgozCrTBf9UyC8al6fdBMMAd6_fUarbIOMEpt5Sll1FIAkCJ377JM/s1600-h/PriceRentQ42008.jpg) or compare the price of homes compared to incomes (http://www.nytimes.com/2009/04/22/business/economy/22leonhardt.html?_r=1).

Both of these measures show that homes were inflated dramatically. A house as an investment is also very simple to find the data for. The increase in value comes from an increase in the cost of the house (the difference between your buy and sell price). Expenses come from the mortgage, property taxes, insurance, maintenance and repairs, closing costs, etc.

The only way you can really make money from "investing" in housing is by avoiding the mortgage costs and getting closing costs on the cheap. This means you need a huge chunk of change to start with and good connections in real estate (such as being an agent yourself). None of this is attainable by the standard family.; May 26, 2010 at 7:07 PM

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Car Finance – How to Lessen the Financial Impact of Buying a Car

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Car-Finance–How-to-Lessen-the-Financial-Impact-of-Buying-a-Car

Some time ago, an article appeared on the internet suggesting that the average price of British car ownership, when you factor in things like maintenance and fuel, is more than £100 pounds per week – or over £5k per year. No wonder car finance is so popular.

A car is one of the two guaranteed massive expenses in most people’s lives. The other is a house – and it’s no coincidence that in both cases, the most common way of buying them is through a finance package. In the case of houses, you get a mortgage. With a vehicle, you get a car finance package, which is basically the motoring equivalent of a mortgage.

Let’s look at some of the costs associated with car ownership. First, the car. A new car, which is the most reliable type of vehicle (and which has much better environmental and fuel usage figures, so it is also cheaper to run) costs a minimum of just under £10k, with an average of between £15k and £30k for something suitable for a family. If you haven’t got that kind of money sitting around in the bank – or if you can’t afford to have it all leave the bank at once – then a car finance package is the only way to put a new vehicle on your driveway or in your garage.

Servicing and MOT costs go up annually. Maintenance costs get more frequent and more expensive as a vehicle gets older. My own car is currently costing between £100 and £500 per month just to stop it falling to pieces. That’s appalling financing – which is why at some point I’m going to have to get around to getting my own car finance package.

When you run a car on finance, you pay a single monthly figure to own the vehicle. If you do it from new, you are likely to be able to refinance regularly to trade in for more recent models. That will keep your fuel costs as low as possible, and may completely avoid servicing costs – because many new cars are offered with a couple of years’ free servicing as part of the price.

Basically, what you need to look at is not the total cost of the car, or the full amount you borrow on a car finance package – but the monthly figure you will be paying to own and run your vehicle. Budget first, then shop for car loans: otherwise you will always end up tempted to go that extra bit over what you can really afford.

Bear in mind, when you budget for your finance package, that you also have to factor in the cost of fuel, oil and general running (road tax, MOT, services). So if you’ve arrived at a monthly figure you can support for running a vehicle, that is not the amount you can afford to spend on your car finance payments. The payments on your finance package are a part of that figure: you have to come in under it, or level with it, when you have also accounted for your basic running costs.

In the modern world, lease hire is probably the most popular method of car ownership. In effect, a leased car is owned by the dealership rather than you. You pay a monthly fee for it (which often entitles you to some servicing and maintenance too) and are able to exchange it for a newer model every two or three years. That means you get reliable cost effective motoring for the whole life of your car finance package.

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Exchange Traded Funds (ETF) - Is it The Right Option for Wary Investors?

Editor's Note: This is a guest article sent by Sachin

Exchange Traded Funds- The easy option for wary investors?

To say that the current global investment market has given investors pause for thought would be a major understatement. They want out of the nuthouse, and they want some security for their money, for once. The 2008 crash did one useful thing, if nothing else- It redefined the relationship between investors and the investment market more than anything since 1929. The US market went from the biggest market of all time to a testimony to the powers of debt collection, and took its professional credibility with it.

Exchange Traded Funds (ETFs) started in the 90s, largely as an alternative to mutual funds. They were like the small mammals among the dinosaurs, and were “boutique” investments with high unit prices for investing in baskets of stocks which were usually based on specific indices. Unlike mutuals, they could also be traded in real time on the markets, so they gained some popularity as low risk, high value investments.

ETFs are managed funds, (small percentile fees) and they’re generally managed by major leaguers like Vanguard, Deutsche Bank and other heavyweights. That level of management helped separate the wheat from the chaff when the mortgage securities disaster happened. There were several ETFs specializing in mortgage securities, and they, like anything and everything connected with those securities, were hammered by the markets.

The markets were wrong. Further investigation of the ETFs discovered they were holding bulletproof, AA rated mortgage securities, not the unspeakable garbage which destroyed that market. A very sharp V in the prices of these ETFs was the result. (Interestingly, Citigroup, when it received its TARP money, cherry picked as many of these types of mortgage security as it could find, and was very nearly back in the black within 12 months.)

ETFs as an investment option

ETFs offer a degree of remove from direct exposure to the market’s neuroses. Investing in portfolios and indices means not having to deal with the moves of a few stocks on a daily basis, which saves both nervous systems and valuable time and money. ETFs are now major traders in their own right, thanks to the 2008 crash. The high value ETFs generally went out of favor, but were reinvented by traders as high volume trading materials. Institutional and other buyers also contributed a lot to volumes. Some ETFs even give excellent day trading margins, an outcome clearly not foreseen by the original ETF concept.

The ability to invest in indices has also evolved. ETFs now invest in currencies, bonds, commodities, and other less accessible areas for private investors. This level of flexibility, and the ability of fund managers to isolate specific investment modes far outstrips the mutuals. The mutuals, in fact are now setting up their own ETFs, largely because the ETFs have been busily making obsolete the traditional mutual investment mixes which are comparatively vague, like “income, capital growth, etc.,” which don’t compare well to “aerospace, oil, mining” as investment options.

As the “best and brightest” wade through the various legal possibilities of debt recovery in its most literal senses, it’s no great surprise to find the ETFs have got a grip on the global market. There’s now more than a trillion dollars under management in ETFs around the world. Investors have voted with their money, and the market is now having to listen, whether it likes it or not.

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financeninvestments said...: Well this is really very useful site and the tips that sachin has provide was excellent, and very useful for all of us. Well its tell you all on etf.
Etf are considered as the safest option if you consider gold investment because for that you don't have to hold physical gold. Well I would invite sachin too to write for my blog on finance and investment related issues.

With Regards,
Sandra Bullock
site: financeninvestments[dot]com; October 25, 2010 at 9:17 AM
Sherin@Money Hacker said...: I have read your comment and sent a personal note to Sachin on this comment. It is nice to hear such good words and happy to know that you are visitor. Hope, Sachin would consider writing an article for your blog too..

Not only gold, right ETF investment provide you the facility of growing your invested capital along with the growth of your nation...! and it is very simple to follow and can done by experienced and beginner investors...; October 25, 2010 at 11:45 PM

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Friday, 1 November 2013

Tips for First Time Home Buyers

Tips for First Time Home Buyers

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Simple and perfect Wealth Building Strategies

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Reasons Why a Home Isn't an Investment

1. Homes Don't Always Appreciate.

2. Investment Properties Often Lose Money.

3. Returns are Minimal.

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Car Finance – How to Lessen the Financial Impact of Buying a Car

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