by admin | Nov 7, 2016 | Homes, Villas and Condos, Investment Property in Florida, Uncategorized
5 Things To Do Prior To Buying A Home To E
nsure Success!
Buying a home is a process that takes time and effort and that if done right ensures many years of happiness and worry free living. When you try to purchase a home without following the correct steps you set yourself up for a frustrating experience. Additionally if you ignore some of the tried and tested home buying advice you might be stuck in a home you hate or worse in one that ends up costing you more money in order to make the house work for your or just to keep it habitable. By following the tips of 5 things to do prior to buying, you can ensure a home shopping process that is less stressful, that you find a house you love, and it is a house that will last you as long as you want to live there.
TIP #1. WORK ON IMPROVING YOUR CREDIT
If you don’t already have excellent credit then you should work on improving your credit prior to buying a home. The earlier you can improve your credit score prior to buying a home the better mortgage options and interest rates there will be available for you. The best ways to improve your credit score include paying down debts (especially short term credits cards, consumer loans, etc.) and to make sure all debts at least receive the minimum payments and that those payments are made on time. Any late payments on debts, even you pay off the debt in full, will knock your credit score down.
Another recommendation is to not close any credit card accounts until after you purchase your home. The credit scoring agencies look at your overall credit usage and by closing accounts down without also paying other debts down results in an increased use of your credit limits. The higher your use of all credit limits combined the lower your credit score can go. In other words by closing an account you reduce your overall credit limit and if your debts are still the same your percent of debt is now a greater portion of your current overall credit limit.
TIP #2. START SAVING UP MONEY FOR A DOWN PAYMENT ASAP!
While there are home loan purchase programs that will get you into a house for 3.5% down (you may even qualify for a home loan grant that makes your net out of pocket result in zero down) there are still other expenses associated with purchasing a home you need to be ready for. Some routine expenses that come up during the home purchase process include the fees to pay for the home appraisal, home inspection, closing costs, and possibly to pay for any contractors to provide second opinions on issues brought up by the home inspector such as pest inspectors, structural engineers, and more.
By having money saved up to pay for the expenses associated with buying a home and the down payment you are sure to close in that transaction, since if you cannot provide the down payment and other closing costs at the closing table you will not be able to buy the home. So the earlier you start saving for your down payment the better position you will be in when it comes time to close on your home. Over the life of owning your home it is also a smart idea to keep extra cash on hand in case you do need to repair something major in order to keep your home livable and usable by you.
TIP #3. GET PRE-APPROVED FOR A MORTGAGE
Why is a pre-approval important you ask, a pre-approval is important since it lets you know the maximum amount you can borrow to buy a home. By knowing the maximum amount you can borrow you can start to narrow down locations and home features that fit within your budget range. Nothing can be more frustrating than shopping for homes only to realize you could afford to borrow more and get something with the features you want or shopping for homes outside of your price range and realizing later you wasted months looking at homes you would not be able to borrow for. Another reason to get pre-approved is many home sellers will not seriously consider your offer to purchase their home without a pre-approval letter. Everything else being equal or close to equal if your offer is submitted with another offer that has a pre-approval letter and yours does not you will lose the chance to buy that home.
You should not pick the first mortgage company you see and ask them to do a pre-approval for you and leave it at that. Instead you need to talk to a number of different mortgage companies to find out what kinds of mortgage loans do they offer and what will work best for you. If you have credit issues ask the mortgage companies you talk to if they have any credit counseling programs that you can use to help improve your credit score. Additionally you should be asking the mortgage companies what will be the closing costs associated with the loan and if there are any points with getting the loan. Closing costs eat up the money you saved up for your down payment and points whether paid up front or financed into the loan can increase the overall cost of your loan. It pays to compare loans and costs to get the best deal possible for you.
TIP #4. DETERMINE HOW MUCH HOUSE YOU CAN AFFORD
While you may have been pre-approved for a certain amount that does not mean over the long term your house payment, along with tax, interest and insurance payment will be affordable for you. You need to look at a home’s affordability based on the paycheck you bring in today and not with the hopes of a possible promotion or pay raise in the future. If you are stretching your budget today to buy a home chances are you will not be able to keep up on maintenance and updates of the home which could lead to your home’s value sliding backwards. The situation then compounds when you need to sell the home due to affordability issues and the value of your home is now less than you paid for it due to lack of updates or other maintenance issues.
Look at your budget accurately and determine how much home payment can you afford the instant you buy the home. Make sure that home payment includes what you have to pay for property taxes and insurance. Since property taxes will depend on the price of the home and the location of the home (high property tax location versus low property tax location) the amount of home you can afford will change based on where you want to buy a home.
Cost to insure a home can vary and is dependent on the age, condition, claims history, and location of the home as well. If you are not already involving your insurance agent in the home purchase process, by the time you get into a contract to purchase a home and run the insurance quotes you may realize you cannot afford the home with the insurance premiums and have to cancel the deal resulting in wasted time. Your insurance agent should know that you are looking to buy a home so that way they are ready to give you insurance quotes prior to making an offer on a particular home. If the combined total of insurance, taxes, interest, and mortgage principal payment stretch your budget too much you may want to reconsider that purchase and instead consider something that fits within your budget more comfortably.
TIP #5. WHAT TO DO WHILE IN CONTRACT TO BUY A HOME
Once you have entered into a contract to purchase a home your tasks do not end there. You may still be required to provide recent bank statements, pay stubs, and other financial information as requested by your lender. The home you want to buy will be appraised to make sure the price you are borrowing to buy the home is supported by the real value of the home. An Appraiser will make sure the home is not valued at less than the amount of money you are borrowing to buy the home.
Additionally you should have a home inspection of the home performed so that way major problems can be identified and you get a general overview of the house’s condition. A good idea prior to making a purchase offer on a home is to interview a number of home inspectors and get an idea of how they do the home inspection and ask them for any suggestions for you as the buyer to look for when you walk through a home for the very first time. Things you notice with a home that may be of concern should be brought to your home inspector’s attention so that they can check it over when they do the actual inspection. Keep in mind this is not a time to try and save money and skimp on a home inspection. You may be in this home for a long time and are investing a significant amount of money into the home. By spending less and getting a great deal on a home inspection you may end up paying for the discount multiple times over when issues are missed and are left for you to repair.
Once you get the inspection report make sure to review it carefully and ask the home inspector if you have any questions. If the home inspector suggests further evaluation by professional contractors in certain areas of the home then you should make arrangements as soon as possible to have those areas inspected. If you need more time to arrange the inspection then involve your Realtor in the matter so that an extension to the inspection repair period can be negotiated if need be. This is another one of those areas where if you have to spend money to hire a structural engineer, HVAC contractor or another contractor for further evaluation of a problem area you should spend the relatively small amount of money now versus the large amount of money to fix a problem later when you own the home. If there are problems in the house discovered before you close on the home you can either request to have them repaired at the seller’s expense or walk away from the deal saving you some major expenses.
Here’s the Bottom Line..
Buying a home is a major undertaking that should not be taken lightly and without the proper preparation. With the long term investment involved in owning a home by taking the time to go into the process properly prepared you can help ensure success. If you skip any of the tips noted above, be forewarned that your home purchase and home ownership dreams may be more bumpy than desired.
So if your thinking of buying a home be sure to contact one of our experienced agents to get the process started and to make it a smooth process for everyone!
– Source: cincinkyrealestate.com
by admin | Oct 24, 2016 | News, Retirement / 55+, Uncategorized
Tips For Buying Into a 55 and Over Retirement Community
What is a 55 and Older Community?
A retirement community is a particular neighborhood that has been built for adults who are at least 55 years of age. The agent limit, however, is not always set in stone and can be as young as 50 and as old as 60 for a starting point. Most seniors living in retirement communities are in fact retired from their nine to five jobs. Retirement communities can be single family homes, condos or even apartment living. Sometimes these neighborhoods can be gated for additional security.
Retirement communities are an attractive option for older home buyers, and for a good reason. These communities offer a broad range of choices (the more expensive the community, the more it generally has to offer), all of which are designed to make retirement more attractive, healthier and more enjoyable than it would be if you were to buy and live in the average neighborhood. Quite often 55 and older housing offers amenities that other places might not have much like living in a hotel.
If you are considering buying a home or a condo in a retirement community, there are some things you should know before you get started. Buying what may be your last home is considerably different than buying your first, and you will need to account for some factors that are unique to later life and the communities that cater to older buyers.
Take a look at some of the best tips for buying into a 55 and over retirement community.
Weigh the positives and negatives of each housing type.
One of the first steps before looking at retirement communities is to decide on what kind of housing that’s most desirable. You want to buy a property that you can be happy with, whether it is a single-family home or a condo. Single-family homes offer more privacy, but a usually harder to maintain (although many communities provide maintenance and upkeep services – for a price), while condos are generally easier, but offer less privacy. The bigger space, generally the costlier the utilities, maintenance, etc. Have a look at the pros and cons of a house vs a condominium to get an understanding of which housing choice may be the best fit for your financial and lifestyle choices.
Visit during the off-season.
It is important to visit the 55 plus communities you are considering at different times of the year. Many times buyers fall in love with an area while visiting on vacation. But just because you liked Florida in the spring does not mean you will like it in the summer. It may be a good idea to rent temporarily in the area you are thinking about buying to see what the off-season is like, just to verify that you can be happy living there.
If you are a retiree and have not committed yet to where you want to purchase a retirement home, have a look at some of the top 55 and older communities throughout the country. If you are not staying local, it might be worth checking out one of these hot spots.
Find out what the management is like.
Competent, reliable management is a necessity if you want to live in a community where things work as they should. While some management teams may be great at what they do – and dedicated to the satisfaction of residents – others may not.
Make sure to meet the management and talk to residents to get a clear picture of what you will be dealing with. There is nothing worse that getting stuck living in an area with a horrible management company or association. Be sure you know the advantages and disadvantages of a homeowners association. You will find an excellent explanation in the reference.
Know what will be required of you.
When you enter into a retirement community, you will sign an agreement that states what you can expect from the community, and what the community will expect from you. If you have never lived in a home or condo with a community organization, like a homeowners association (HOA), you may be surprised to discover yourself limited in more ways than you anticipated. Rules for parking, decorating your home, lawn maintenance and more may be in place.
Some 55 and over communities have rules in place restricting who can live in the property. For example, you may find out that both a husband and wife need to be at least fifty-five years old. Some retirement communities do not allow kids to be residing in the property at all. Often people ask if they can purchase into a 55 and over community if one of the spouses is less than 55. These are questions that should be researched before buying.
You may be wondering how it is lawful for a community to be able to discriminate based on age. There is an exception in the fair housing act called The “Housing For Older Persons Exemption.” You can read more about this on HUD.GOV website.
Make sure you are OK with the answers before you buy. Additionally here are some tips for dealing with a homeowners association which you may eventually need.
Learn about what life is like in the neighborhood.
Another important tip for buying into a 55 and over community is finding out the programs offered. Many retirement communities offer activities for residents. One of the main benefits of living in such a community is that there is always something to do, often with other residents. Some communities have a focus, like golf, while others are more varied in what is available. You should review the calendar of activities to see if there are events that you will want to participate in.
If you are not excited about what is offered, you may find another community is better suited to your lifestyle. Some people know without a doubt they want amenities like a gym, swimming pool or tennis courts. Other folks may want to look for things such as daily activities whether it is a knitting or painting class or even something as simple as Bingo or other such games. These are things to think about before buying into an over 55 retirement community.
Clarify the costs of living in the community.
Some adult living communities require you to purchase a membership to live there, which can be expensive. There will usually be costs associated with community management, upkeep for your home and landscape and possibly other expenses. The more services offered, or the more exclusive the community, the more costly it is to live there. You should choose a community that works with your budget.
Consider several different locations.
When you know what you want to spend your time doing in retirement, it is easier to choose a place that offers what you need at a price you can afford. If golf is your obsession, obviously a community near a country club would be ideal. But if you want to spend your time exploring museums and cultural offerings, a city-based community might be better.
Although the real estate can be pricier, the city makes getting around easy and puts you close to so many different things. The closer you can be to the things that you want, the less time wasted commuting and the less stress you will deal with. Maybe being close enough to family and friends is important? If that’s the case, then it probably would not be wise to purchase a retirement home out in the boonies somewhere.
Understand the local surroundings.
While you may have discovered what feels like the best retirement community around, don’t forget about your surroundings. Many buyers forget to research the amenities they are accustomed to having elsewhere. Here is an excellent resource that explains how to pick a neighborhood. Take a look at many of the things you should be thinking about when choosing a neighborhood such as:
- How is the crime and safety rating of the town or city?
- What is the accessibility to major highways and commuting routes?
- Are there major conveniences nearby like grocery shopping, a bank, the post office and restaurants?
- How far away is the nearest hospital?
- Is there a commuter rail nearby that will take you to major cities?
- Are there things nearby which you might not want like high tension lines, railroad tracks, etc?
- Is there any highway noise that may end up becoming a nuance?
- How is the walk-ability of the area both inside and out of the retirement community?
- Are there churches or synagogues nearby that suit your religious needs?
- If you have a dog is there a park nearby?
These are all things worth finding out about when you are purchasing into an over 55 retirement community. You only have one shot at getting this right. Selling again in a couple of years is probably not on your radar. Here are even more neighborhood details to be thinking about. Knowing the neighborhood is important!
Understand the homes amenities.
While choosing the 55 and over community, you will be happy with could depend largely on your surroundings, don’t underestimate the importance of the home or condominium you choose to live in! Over 55 housing often has different features and perks than you would find in traditional housing.
For example, are the doorways in the home set up for easy access with a wheelchair? While nobody wants to think about this kind of things, it could become necessary somewhere down the line. Maybe due to health or injury concerns you need a first-floor master bedroom, so you are not going up and down stairs? Are the baths handicap accessible? These are the kinds of things to think about when purchasing 55 and over housing. Handicap accessibility may not be an issue now, but it could be sometime in the future.
Research the approval process.
Most retirement communities will want to verify that you are a good fit before you are allowed to join. The more exclusive the community, the more thoroughly it will scrutinize you. Management may ask for your financial records and references. You can talk to your real estate agent and the residents of the community to find out what kind of questions you will be asked.
You can also ask management directly. Find out what they are looking for before you apply, so you can prepare and increase your odds of acceptance.
Make sure to talk to your future neighbors.
The people currently living in the community will be your future friends – or your future enemies. You are moving to the town to start a new chapter of your life, to take advantage of your freedom and to spend time with other people in a similar stage of life. While you can’t expect to like every person living there, you should try to talk to quite a few of them to see if you think you will like being around them.
Understand your financing options.
If you are a senior purchasing a retirement home, it is certainly possible you are paying cash. If that’s not the case, it is important to understand your financial options. Some seniors may even consider getting a reverse mortgage if they are no longer working and looking for an income stream.
Reverse mortgages can be a great loan product under those circumstances. Make sure, however, that you understand reverse mortgage pros and cons. If you are over 62 years of age, it’s a financing option worth looking into. Reverse mortgages are not for everyone. Be sure you speak to someone reputable when looking for this kind of financing.
Check re-sale values.
Most seniors who are opting for 55 and older housing are probably not thinking about selling anytime soon. This, however, is a weak reason not to check on the local re-sale value of this type of housing. There have been periods of time where this kind of housing flooded the market, causing market values to drop. Make sure you speak to a top local real estate professional who can guide you on the projected re-sale value. Is purchasing an over 55 property a good idea in the location you are thinking about? Doing your homework is wise.
One last important point worth mentioning – there is a big difference between assisted living and traditional over fifty-five housing. When people hear the words “retirement community” different things can come to mind. This is a great article that explains the various types of senior housing choices. Assisted and residential care homes are not the same things as an over 55 development.
Trust your intuition.
You are going to have a lot of options for retirement communities, and you may have trouble finding a clear winner. Once you have considered all the relevant factors – cost, location, activities, current residents, management, etc. – you are going to have to make a decision. Trust your intuition and go with what feels right.
Just be sure to ask all these important questions when you are buying into a 55 and older community. Finding out the answers will help ensure you are happy with your decision.
Thinking about Buying in a 55+ Community? Contact one of our experienced agent’s who specialize in the popular retirement communities around Florida to get your buying process started today!
Source – maxrealestateexposure.com
