How Can I Get a Down Payment to Buy a Home?

According to Homes Magazine home ownership in America has increased from 25% in the early 1900’s to 69% by 2005.  The major struggle for home ownership has been coming up with the down payment.

Here are a few ideas that may work for today’s want–to-be homeowner.

Save Your Tax Refund

If it’s hard for you to save, you can change your withholding exemptions from 1 to zero.  This will more than likely assure you a fat income tax refund.  If this does not increase your tax refund than your regular tax refund might be enough to help you buy a home.

Borrow From Parents

It’s not unusual for parents to help their children buy a home.  Tax laws will allow each parent to gift a certain amount of money without tax consequences.  Before you decide to use this method I suggest you contact a CPA (Certified Public Account) for more information.

Save X Amount Periodically

My mother taught me that the secret to making a savings account grow is to make deposits into the account at the same time every month and to never withdraw the money unless it is an extreme emergency.  For example, the first Thursday of every month you deposit $200, at the end of 12 months, you will have saved $2400 plus interest. As the balance grows you will be surprised at how disciplined to the saving process you have become. 

Sell Stuff

Everybody has too much stuff.  Some people spend hundreds and even thousands every year on storage units where this stuff is stashed.  Look in your attic, your basement, under your bed and in your closets you will surely find stuff you no longer use.  If you haven’t used it in a year, sell it at a garage sell or on eBay.  You will be surprised how much money you had lying around.

 Check Out Government Programs

If you’ve served in the armed forces, you may qualify for a VA Loan from the Veterans Administration.  The government also offers a slew of down payment assistance programs for home buyers.

Take a Second Job

Some buyers sacrifice evenings to work a part-time second job.  Look at it as a short-term situation, and it might not be so hard to do.

 Ask for a Raise

If you are a dedicated employee that is a benefit to your company then ask you have nothing to lose and a down payment to gain.

 Tap Your Retirement Funds

Certain retirement accounts will allow you to take out the principal balance without paying a penalty.  Before considering this method consult your CPA for current regulations.

Consider 100% Financing

If you have good credit, you may qualify for a 100% loan.  This could be a single mortgage or a combination of mortgages to equal 100%.  Talk to your mortgage lender to receive more information about 100% financing.

Above are only a few of the many ways to obtain a down payment to buy your dream home.  By being creative and hard working, home ownership may be closer than you think.

The above information makes no guarantees and is the personnel opinion of Deborah Burton of Deborah Burton Realty, LLC.



Top Ten Selling Ideas

Sellers often ask how they can sale their homes quickly while still making sure they get all their equity.

Unfortunately, there are no magic rules for selling a home and being able to make a sizable profit.  However, there are the oldie but goody steadfast rules for selling your home.

Here, in no certain order, are the top ten rules that will affect your homes marketing and also get a positive response from Buyers.

1.       Location:  location is still extremely important in the sale of your home.  A Buyer is more likely to purchase your home if it is located on a pleasant street in a desirable area, then if your home is located on a busy, noisy street next to a commercial area.

2.       Price:  you should price your home just below the price of your competition.  If a property is priced right it has a better chance to sell in a shorter length of time.

3.       Condition:  In this day and time most Buyers want a move-in ready home.  Buyers live very busy lives and do not have time to make renovations.  While there are still some Investors and Renovators that buy fixer-uppers it is more likely your Buyer will not want to make renovations.

4.       Curb Appeal:  As you drive up to your home the first impression a Buyer has is your curb appeal.  It will either make the Buyers rush to come in or hesitate coming in at all. 

5.       Staging:  Once your curb appeal gets the Buyer in your front door they need to be wowed.  By staging your home to show its finest amenities will make the Buyer feel right at home.

6.       Kitchens:  By now everyone knows the kitchen sells the home. In today’s busy market Kitchens are for more than cooking, they have become a family gathering place.  Just a few inexpensive remodels can produce a high return.

7.       Competitive Advantage:  Don’t make the mistake of thinking you are the only home on the market, in your price range.  You have to be priced competitively and have more amenities and upgrades than your competition.  This is where your curb appeal and staging as well as pricing, location and condition come into play the most.

8.       Liveability: Today’s Buyer is looking for easy, convenient living.  They want good schools, pleasant neighborhoods and plenty to keep them entertained.

9.       Marketing:  Marketing is now worldwide with the invention of the internet.  Billions of people worldwide can now view your home via hundreds of real estate websites.

10.   Your Agent:  Your agent can be your biggest asset.  Make sure your Agent is experienced in the price range your home is valued, also make sure your Agent is updated on the different types of marketing and is able to assist you with new ideas to sell your home.

The real estate market has made many changes in the past two years.  Being realistic about your home’s value in today’s market will be your greatest selling tool.

12 Real Estate Terms to Know

Buying or selling a home can be confusing.  Knowing the definitions of the following terms will help you better understand what’s going on.

·        Adjustable Rate Mortgage (ARM) – can be also referred to as a Variable Rate Mortgage. A mortgage in which the interest rate is adjusted periodically based on a pre-selected schedule.

·        Buy-Down – A method of lowering a buyer’s monthly payments for a short period of time.  The lender subsidizes the mortgage by lowering the interest rate for the first few years of the loan. At that point the interest rate will go up to an agreed upon rate.

·        Caps – a limit the interest rate or monthly payments can adjust to with and Adjustable Rate Mortgage.

·        Debt-to-Income Ratio – the percentage of your monthly debt versus your monthly income.  This percentage is calculated by dividing a buyer’s monthly long-term debts by a buyer’s gross monthly income.

·        Underwriting – The decision-making process of granting a loan to a potential homebuyer.

·        PITI Payment – Refers to a payment that includes the Principal, Interest, Taxes, and Insurance.

·        Origination Fee – a fee charged by the lender for processing a loan application; usually calculated as a percentage of the loan.

·        Market Value – The price a property could possibly bring in the real estate marketplace.

·        Mortgage Insurance – insurance that protect lenders against loss if a buyer defaults on their loan.  This is required when the loan-to-value ratio is greater than 80 percent.

·        Fixed Rate Mortgage – a mortgage in which the interest remains the same throughout the life of the loan.

·        Earnest Money – money given by a buyer to a seller as a deposit to purchase a property.  Earnest money is subtracted from closing costs.

·        Closing – Also referred to as settlement.  The meeting in which the real estate transaction is completed and when the property and funds are exchanged between the Buyer(s) and Seller(s).

The terms above are used in 99.99% of all real estate transactions.   Whether you’re Realtor®, Lender or closing attorney use these terms you will now know what’s going on.

The above information should be used as an informational tool only and makes no guarantees. 



How REALTORS® Can Help Sellers Increase Their Bottom Line.

Commonly homeowners are not the best judge of the value of their home.  I myself  have fallen into this category.  There are too many emotional ties to the home for some homeowners to be unbiased.  Also they know the amount needed and/or wanted from the sale and may not be objective.

REALTORS® have the most current information about the marketplace and this information allows us to know what properties similar to yours are selling for.

If your estimate is too high some prospective buyers will consider your house out of their reach.  Frequently reductions may cause buyers to think something is wrong with the house or can show desperation on your part.

If the price is to low you will loose money you deserve.  A REALTOR® can aid you in determining the value of your house and can point out certain information to buyers that a buyer may not think of such as how favorable your location is, the fact that your house is priced within the marketable value, and how popular your house design is.

A “For Sale Buy Owner” sign in your yard could have implications you may not have considered.  For instance, your doorbell may ring at anytime of the day or night and if you are not at home you may lose a sale.  Strangers who may or may not be able to purchase your home will want to come in and look, sometimes just out of curiosity. REALTORS® know how to screen buyers; we will ask about their financing, their moving time span and be able to help negotiate things like closing cost and repairs.

Advertising is much more than writing a cute ad, it is an art.  REALTORS® know which words will get a buyers attention and how to pin point the advertising so you will get the highest and fastest results.  

REALTORS® can continue selling your house even if you are at work or out of town.  Techniques like lockboxes, internet websites, and the Multiple Listing Service allows REALTORS® to be prepared in your absence.

To sum it up many times homeowners try to save money by selling without the assistance of a REALTOR®. To a “For Sale By Owner” it often appears to be a good way to save money, but selling your house yourself can cost you time and money.  So, hire a REALTOR® and leave the selling to us.

The information above is the opinion of Deborah Burton of Deborah Burton Realty, LLC and is to be used as an informational tool only.  Deborah Burton does not guarantee that all REALTORS® have the ability to give the services listed above.

Things to Buy After Buying a Home - Figuring Your Home Start-Up Budget

Many first-time home buyers, after weeks of waiting for mortgage approval and then signing piles and piles of documents that nobody reads -- because if you don't sign, you don't get the loan -- might think a major hurdle has passed when closing finally happens. However, that stuff is only the calm before the storm.

So, with keys in your hot little hands, you open the front door to your marvelous new home. This is where you ask, "But where are the window coverings?" Ordinarily, that's when you discover that you still have a lot of shopping to do

Things to Buy After Buying a Home

You probably have not thought about all the items you will need when moving into a house that you did not need in an apartment. This news comes as a shock to many first-time home buyers. So, if you've scraped together your last two nickels to pay closing costs, here are ways you can save a little on some of your new purchases:

·         Keys & Locks

The first thing you should do is re-key or change your door locks. If the previous sellers were like most people, the neighbors, friends and coworkers all might have a set of keys to your house. Even new home builders give out keys to contractors. It's smart to change the locks and / or install deadbolts.

The easiest solution is to remove the locks from your doors and take them to your local hardware store to re-key. You can buy all new locks, but that's expensive, or you can call a locksmith to change the locks for you.

·         Lawnmower

Unless you plan to hire a gardener or your yard is filled with rocks, you will need to buy a lawnmower. Many new homes in California have no lawns. The back yards are dirt, which means new homeowners here are forking out cash to lay sod or growing their own grass from seed.

·         Garden Supplies

Every home needs a garden hose. You can buy those at a low price, plus find adjustable sprayer heads or lawn sprinklers in any gardening department.  Don't forget about weed-whackers, trowels, shovels, rakes or hoes. A push broom comes in handy for sweeping your garage floor, plus the handle unscrews so you can use it as an extension pole with a wall sander. Consider a watering can, and wheelbarrow or wagon.

·         Tools & Repair Items

Every home needs a well-stocked tool box. Essential items are:

1.    Hammers: Ball & Claw

2.    Assorted Screw drivers: Flathead & Phillips

3.    Hacksaw

4.    Pliers

5.    Plumber's Wrench

6.    Basin Wrench

7.    Small Drill & Drill Bits

8.    Nail Driver

9.    Staple Gun

10.  Tape Measure

Useful items to stock up on include:

1.    Paint Brushes: one-inch to four-inches

2.    Paint Scraper with steel brush for cleaning paint brushes

3.    Five-Gallon Container for mixing paint

4.    Paint Screen

5.    Paint Roller & Sleeves

6.    Drop Cloths or plastic sheeting

7.    Electrical Tester

8.    Wire Nuts

9.    Assorted Screws and Nails

10.  Assortment of Sandpaper

Outdoor Entertaining

Lawn chairs, patio furniture and umbrella, and a barbecue grill are among the starter items most people put out back. A nice starter grill is a Weber charcoal grill, and it's very inexpensive.

·         Window Coverings

You can choose from blinds, drapes, Roman shades, scarves, toppers, curtains, honeycombs, sheers or shutters.

If your budget is stretched too thin, check out self-adhesive paper blinds with clips. These attach by peeling off the adhesive covering and sticking the top of the blind to the underside at the top of your window. They are pleated, so you can fold them up and clip them when you want to open the blinds. They cost less than $5, and serve as a good temporary solution.

·         Appliances

Many new homes are equipped with new appliances, but when buying an older home, depending on where you live, it might be customary for the seller to take the appliances.

At the very least, you will need a:

1.       Cooktop / Range

2.       Refrigerator

3.    Washer & Dryer

4.    Dishwasher

5.    Microwave

·         Linens, Towels and Floor Coverings

Now that you can paint your rooms any color you choose, you might also find a need to buy new towels for the bathroom. Newly painted walls call attention to older, worn items, and your towels might be better suited for washing the car than hanging in a fresh, new bathroom. Consider also floor mats for the bath or area rugs for your larger rooms.



Common Mistakes to Avoid When Obtaining a Home Loan!

You are about to make what is most likely the largest purchase of your life: your home.  Unfortunately most homebuyers do not take time to research the importance of a home mortgage.  Researching the process takes little time compared to the tens of thousands of dollars it could save you.

·        Find a reputable lender – This is the most important choice you can make when starting the mortgage process.  If you don’t trust your lender, you are in for a long and stressful home – buying experience.

·        Pricing – Don’t be lured into a mortgage company strictly by promises of low rates.  Make sure there is enough time to close your loan at the low rate you have been quoted.  Make sure you lock-in your rate so it can not adjust.

·        Programs – As you start the process you will find there are many more loan programs than you expected.  Make sure your lender shows you the best program to fit YOUR specific needs.

·        Fixed or Adjustable Rate Mortgage (ARM) – Conventional thinking is that fixed is always better and while this is sometimes true, it is not always the case.  The key is to ask, “How long am I going to live in the property?”  An ARM can actually be a better choice if you are going to be in your new home a short period of time.  The rule of thumb is the longer you plan on staying in your home, the better a fixed rate mortgage will suit your needs.

·        Negotiate problems prior to closing – It’s common for a problem to arise before closing.  Waiting until closing will rarely be in your best interest.  For instance, if the seller has agreed to make a repair do not wait to closing to check to see if the repair has been made.  Taking care of problems prior to closing benefits both parties.

·        Be prepared for closing cost – In addition to the down payment, you be required to pay fees and other closing cost at the time of closing.  Your lender must provide you with a “Good Faith Estimate” which will provide you with a breakdown of all costs so you will know what to expect at closing. 

·        Close at the end of the month – When making a mortgage payment, you will be paying interest that has accrued from the previous month.  At closing however, your lender will charge you prepaid interest for the date the loan is recorded through the end of the month.  Therefore, one way to lower your closing cost is to close at the end of the month.  This will lower the amount of prepaid interest you must pay.

·        Look out for hidden fees – Check for certain miscellaneous fees such as inspection, notary, and document preparation.  Theses fees can total hundreds of dollars in closing cost.  Never be afraid to ask for explanations of fees you are being charged.

The above article is to be used as an information tool only and does not make any guarantees.