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Tips for Landing a House When Prices Continue to Rise
Interest rates have been at all time lows for quite some time now and
home prices keep going up as the competition for good properties also
rises. If you have been looking to purchase a home do not let this trend
deter you. If you are persistent, do your homework and allow yourself
some latitude you can still find good properties for a reasonable price
The competition for homes has increased but if you follow these guidelines
you will have a better chance to get the home that you desire:
1. The Most Important Thing You Can Do Is Save as Much as You Possibly Can
for the Down Payment and Closing Costs.
If need be, ask your parents to present you with a "gift" to help increase
this amount. Under current tax law they are allowed to present you with a gift
of up to $11,000 that is tax free to all parties concerned. This means you can
actually get up to $44,000 dollars in assistance if everyone is willing and able
to participate. By using this strategy you will be able to put more down, lower
your monthly payments and possibly get better terms, too.
2. Before You Saddle Yourself With a Mortgage, for the First Time, Why Not
Try This Experiment?
Every month, for six months, put aside the money that would be going towards your
mortgage, insurance and taxes, as if you currently owned your own home. If you
have difficulty doing this you then know that you are not quite ready to enter
the housing market. If you do accomplish this, without too much of a burden, then
you have not only tested the waters, you have also saved a bit more to contribute
to your down payment. During this six-month period you should also keep an eye
on the rates, and determine if they are fluctuating or rising too much, and whether
or not you would be able to handle that eventuality as well.
3. The Time That You
Choose to Go House Shopping Can Also Be of Benefit to a first Time Home Buyer.
The later part of the year, fall through December, is much less active and sellers
will be more eager to deal with you when they are not being inundated with buyers
making offers. The rules of supply and demand will be on your side.
4. If You Are in a High-cost
Market Consider a Condo or a Townhouse for Your First Property.
The initial funds needed to purchase can be much less, as well as the
ongoing monthly payments and costs. Then, after you have been paying in
for a year or so, built up equity and a good track record, you can refinance
and move into a larger home or better neighborhood.
5. Do Not Fixate on One
or Two Aspects of Your Prospective Home.
If it has a good floor plan, and is on a good property, in a decent neighborhood
a little flexibility on your part will go a long way. After you are in and have
saved a bit more, or accumulated some equity in your home, you can then think
about fixing it up. You can then remodel the kitchen or bathrooms or finish off the basement.
These things, if done correctly, will not only make your home a nicer place
for you to live in, but will also increase the value and the selling price when
that time comes.
6. Do Not Blind Yourself to a Good Deal Because of a Few Cosmetic Detractors.
There are many aspects of a home that can bring down the selling price but on
the other hand are easy to correct once you are in. Flooring, paint and appliances
are not big investments if taken individually and these improvements can be
made without too much disruption or cost.
7. One of the Easiest Ways to Increase Your Options is to Consider Other
Areas or Neighborhoods Then Where You Have Been Looking.
The farther away from the center of town or a major job center you go the cheaper
the homes will be. Consider a longer commute to work for a few years in order
to get into a good home, start building equity and improve your investment position.
8. If the Area That You Have Chosen Is One That Is Popular and You
Find Yourself Bidding on Properties, Make Good Solid Offers and Be Pre-approved
for Your Mortgage.
In this way the seller will not discount you from the beginning and they will
consider you to be a worthy and earnest buyer.