Tag: buying a home

Buying a Home in Today’s Market

Buying a Home in Today’s Market

As a first time homebuyer you probably have many questions. Besides how to get a mortgage and finance your new home, you should consider whether buying in today’s market makes sense for YOU and what price you should pay in order to get to the home of your dreams.

When is the best time to buy?

There are many factors and aspects to consider before anyone can say when is the best time to buy. All in all today, being a buyers market gives you leverage when buying a home. Low home prices result from this excess of supply over demand. What is essential is that you make your decision after having considered both the real estate/housing market and the mortgage market. Currently low home prices combined with low interest rates make purchasing real estate a viable and good decision.

Want to know more about the mortgage market outlook? Then read The Real Estate Report from AMSI Broker, Robb Fleischer for local market trends in San Francisco http://rereport.com/sdc/print/RobbFleischerSF.pdf

Ultimately, the best time to buy is when you are personally ready to settle in, when your finances are in order and when the home prices are low. (…and in today’s market, when interest rates are low, and with the availability of inventory it does make perfect sense).

How to qualify to buy a home?

 

Before you start your search for your home, you should get pre-qualified, to find out if you do qualify to take on such a significant purchase, but also to find out how much you can afford. The first step should be to get your finances in order and get pre-approved for a mortgage, so you know the types of loans, financing and rates extended to you.

Want to know more about how to qualify to buy a home? Then read our article on “How to qualify to buy a home” http://amsires.blog/2011/03/02/699/

 

How to know which price to pay?

 

Buying a home is a process one must learn, whether you are a first time buyer or a savvy investor. Each transaction is unique and differs from another. It is important that you work with a professional expert or good team so the entire process is efficient.

Working with a real estate professional is important; not only he or she will make the process smooth for you but also check all disclosures, and make sure you do not pay more than the current market value of the house of your choice. A real estate agent knows how to evaluate a property but also how to negotiate the best price, which will satisfy both you as the buyer and the seller, and ultimately make you the new homeowner!

Want to know more about real estate sales? Then visit our website www.amsires.com

Benefits of Buying a Home

Benefits of Buying a Home

Great investment

Home values fluctuate over the years, but show a steady increase over time. Statistically home prices have risen constantly in the US and real estate has been a proven investment to build wealth. Most likely home value keep up with the inflation or exceed it to one or two percent (or more depending on the region).

Stable and secure environment

Owning a home means that you and your family can settle in a stable and secure environment.

Independence

It will be your own home and you can remodel and renovate the place whenever you want (subject to zoning and building codes), and have the place you always wanted. As long as you abide with Condo and Building rules, you can make your home the place you always wanted to be.

Building equity

When you are paying rent, that money goes to someone else, without any benefit to you besides the right to live in a space. When you pay into a monthly mortgage for your own home or investment, instead of paying a monthly rent, you are investing into something you will be eventually be yours; you are acquiring an asset and investing in your future or retirement.

In the process of paying back your mortgage you more and more own the home and build equity.

Property taxes

IRS Publication 530 contains tax information home buyers. There are many deductions and benefits that first-time buyers or investors can take advantage of when it comes to property.

In 1978, the passage of Proposition 13 in California established the amount of assessed value after property changes hands and limited property tax increases to 2 % per year or the rate of inflation, whichever is less.

Mortgage interest deduction

A mortgage payment includes the items principal, interest, taxes and insurance (PITI). The largest component of your mortgage payment especially the first years after the purchase is the interests, which is deductible from your taxes.

Capital gain exclusion

If you lived in your house for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains.

For more information about  buying a home read here.

Disclaimer: Please consult with a Tax attorney or specialist. Real estate agents cannot give tax advice.


How to Qualify to Buy a Home – Mortgage Guidelines

How to Qualify to Buy a Home – Mortgage Guidelines


When you are considering buying a home, the first step you should take before looking for your dream house is getting pre-approved for a mortgage. Find out if you qualify for a loan, and for what type of loan and mortgage rate you qualify for.

The variables a lender is examining

A lender will review all your financial data to see if you qualify to buy a house. The variables a lender is examining are your income, debt, credit and savings.

The most important of this is your income. Not only your gross monthly income has to be reviewed but also the type of work and the lengths of employment.

If your income is based on a commission your income will often be examined on a required two-year history.

In case you are self-employed, you must be self-employed for two years. Your income will be determined based on your federal tax return after all the deductions.

How credit scores affect mortgage rates

Your credit score affects your mortgage rate. Most lenders use a credit score designed by Fair Isaac Corporation (FICO). As a borrower you should access your credit report and ensure that your credit score is as strong as possible.

Scores range from 300 – 850. A score below 620 is considered sub-prime and indicates high-risk to lenders and would cause in a charge of higher rates and fewer choices of loans, 620 to 650 is good but you may still be viewed as a high-risk candidate, and above 720 is seen as excellent credit.

To qualify for the best mortgage rates and to have more loan choices you should at least have a score of 720.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to one free credit report from all three major credit reporting bureaus – TransUnion, Equifax, and Experian – for every consumer every 12 months (visit annualcreditreport.com to order your free report). Make sure that your credit history is accurate and request the reports from each company and check if there are any errors.

The ratio a lender uses

There are two calculations a lender uses.

The first or front mortgage ratio, are your total monthly housing expenses to income ratio. Which include principle, interest, taxes, and insurance (PITI).

The second or back mortgage ratio is your total housing expense (PITI) plus all other monthly debt divided by your gross monthly income. Which is your income before taxes are taken out.

Mortgage debt to income is the ratio a lender uses to calculate if you qualify for a mortgage. A house payment should not exceed about 30 % of your gross monthly income for a conventional loan.

How to prepare in advance to get approved?

  1. Since the most important factor is income, you should have a verifiable source of income.
  2. Get your finances in order. Pay your debt on time, which includes all your loans, leases and credit cards. Loans can be paid off to qualify for a mortgage, but credit cards sometimes cannot, depending on the lender.
  3. You should check your credit report for errors and monitor your credit score.

How to find the right lender or bank?

Do you know what you should be looking for in a lender or bank? On of the most common criteria when it comes to choosing the right lender or bank are credibility, dependability, and longevity in the marketplace.

When you are like most people you probably ask someone you trust for a recommendation. But when it comes to your mortgage, you should always consider that your situation might be different from your friend’s situation. Therefore always consider that you should find a lender or a bank that fits your needs the best.

Visit our website for more information about buying a home visit.