The Financial Advantages of Buying vs. Renting

iStock_000052978578_Medium_Buy or rentEven though renting costs far less initially for most people, buying a home has much greater life-time financial benefits.

Consider taxes: Renters pay much more in taxes than homeowners. Homeowners can deduct mortgage interest (which is going to be most of your monthly mortgage payment initially), as well as real estate taxes. This means most of your monthly shelter costs are going to be tax deductible. Read More

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Interest Rate vs. APR: Why You Should Care About APR

Rate vs APRThe annual percentage rate, or APR, is the interest rate a borrower will pay over the life of the loan. It is higher than the interest rate the bank advertises because it includes the simple rate, plus other costs such as prepaid interest (most APR’s are calculated upon an assumption that the loan closes in the middle of the month and include 30 days prepaid interest), points and other costs. Read More

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Good Credit History: It’s Essential

Credit-historyMaintaining a good credit history is essential to your ability to purchase a home, get a car loan, borrow money for other purchases, take out insurance, rent an apartment, even get a job. For all these reasons, it is very important to monitor your credit history on a regular basis. Everyone is entitled to receive a free copy of their credit report each year from the 3 main credit reporting agencies: Experian, TransUnion and Equifax. You can get your free copies at: www.annualcreditreport.com.

Review the report from each of the reporting agencies (they can differ). Do this every year even if you are not in the market for new credit. It can help guard against identity theft and also help you prepare for the day you do need to take out a mortgage, refinance, buy a car, etc. Review the reports for accuracy. Read More

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How To Choose A Lender

iStock_000056690830_choosing a lender_Medium_600x400Once you have figured out which mortgage product – fixed rate or adjustable rate mortgage – is best for you, and whether or not to pay points, you are ready to begin comparison shopping for a lender. Interest rates, of course, are the first point of comparison. Be sure to compare apples-to-apples” — i.e. similar products at different institutions. Keep in mind that the advertised interest rate is only one measure of the cost of the loan. A better point of comparison might be the Annual Percentage Rate (APR) which is a measure of the total cost of credit, expressed as a nominal yearly rate. Read More

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A Smart Offer To Buy Should Include Contingencies

a smart offer to buyYou can include any contingencies you want in your offer to purchase a home. But don’t load up your offer so much that the seller will walk away. You should consult a lawyer to help you draft your offer, and discuss with him or her which contingencies to include.

Here are the most important ones:

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Making An Informed Offer

Making an informed offerHow much you should offer for a home will depend on several factors, including the asking price, recent sale prices for comparable properties in the same neighborhood, how long the property has been on the market, the current market conditions and what you know about the seller and his/her motives for selling. You also need to factor in your own motivations and how much you want a particular property.
In a strong real estate market, buyers often engage in bidding wars for a property, sometimes even paying above the asking price. In that kind of market, you need to make your best offer, or close to it, right off the bat.
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Why Consider A “Buyer’s Agent”

iStock_000056690830_Medium_600x400Unlike sellers who have a contractual relationship with the real estate agent who lists their house, buyers are not tied to the agent who helps them find a home. If you don’t think the agent you are using is doing a good job, talks too much, smokes too much, or just plain rubs you the wrong way, by all means find another agent, and another one after that if you don’t like the second one.

Unless you are working with a buyer’s agent, with whom you do have a formal agreement; you do not owe the agent anything. If an agent introduces you to a home that you eventually purchase, the agent will receive a commission which is paid by the seller out of the proceeds from the sale. Read More

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Selling Your Home? How To Choose The Right Real Estate Agent

How to choose the right agentIf you are planning to sell your home in the near future, you will probably want to enlist the services of a professional real estate agent to market the home for you. To find an agent, compile a list of at least 3 individuals or real estate firms from either referrals or other places, such as ads or online, to interview. Ask each about their experience, how long they’ve worked in the area, recent sales they have brokered, and how they intend to market your property — open houses (how many?), where they plan to advertise your home, Internet and social media platforms they plan to use, personal mailings, etc. Who do they think is the market for your home and how do they plan to reach this market? Ask each for suggestions about your property and different cosmetics, furniture rearranging, other improvements they recommend that might make your home more attractive and saleable. Read More

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Pre-Approval vs. Pre-Qualification: What’s the Difference?

prequalification vs preapprovalBefore you start home shopping, you may want to get pre-approved for a mortgage. Getting pre-approved for a mortgage is not the same as getting pre-qualified, although the terms are often used interchangeably. They are actually very different with implications for both buyers and sellers.

‘Pre-qualified’ means that a prospective borrower has spoken to a lender (often just over the telephone, or via an online application form), and that based on information supplied by the borrower, the lender says that the borrower would probably be approved for a specific loan amount –- provided, of course, that the borrower’s information all checks out. Read More

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