Saving for a house is never easy, but Tim Parker’s article on how to start saving money today makes it seem easier. He gives you six ways to start squirreling away some money now for the house you’ll want to buy down the read, and they’re all simple and effective!
This 20,000 sq. ft., tenant-ready building in the heart of Donora has five store fronts for optimal income potential. The roof was replaced just six years ago and tenants can walk in to ready-to-use storefronts on the ground floor. The second and third floors can be renovated for any purpose, increasing your income potential dramatically. Currently, storefronts can be rented for $700-$800 a month. Newer carpeting and neutral finishes make these units a blank slate for new tenants.
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Sometimes you find the ideal house for you and your family only to find out that there are other parties interested in purchasing it. If this happens, you may become embroiled in a bidding war, which can quickly drive the price of the perfect home up. If you’re worried about being the winning bidder, there are a few steps you can take to ensure your offer is the winning one:
Getting pre-approved for a mortgage at a price higher than the current listing on the house is a great way to get an edge over the competition. Sellers are always wary of buyers with bad credit, and pre-approval takes care of that. It also means you can close more quickly on the house because you won’t have to wait as long to get your mortgage in place.
Keep in mind that pre-approval and pre-qualified are two different things. Pre-qualification isn’t as strong and doesn’t guarantee that the lender will give you the full mortgage amount you want, it just means they will consider making the loan. If you want to be pre-approved, you’ll need to fill out a complete mortgage application and provide extensive documentation.
Offer A Strong Down Payment
The larger your down payment, the more seriously the sellers will take you. If you come in with a lower figure on your down payment, the sellers may assume that you’re struggling financially or they may fear that you won’t be able to come up with the funds when the time comes to close. This can be particularly helpful if the seller needs to close on the house quickly because they are in financial difficulties.
Understand the Sellers and Help the Sellers Understand You
Regardless of whether the seller is putting their home on the market for personal or financial reasons, you can tap into their feelings with the right letter. If you know they’ve raised their children in the house and you have young children of your own, the personal connection can make a real difference. Having a career as a doctor, firefighter, nurse or some other altruistic pursuit may also help.
If money talks, however, skip the warm feelings and aim straight for their wallet. If you find out that the seller is in foreclosure or is behind on their own mortgage payments, they will want to close as quickly as possible so that they can move on with one less debt to worry about. If you have the means to make a cash offer to a homeowner in foreclosure, you could make an offer that’s up to 20% less than other buyers who have to take out a mortgage.
Be Willing to Negotiate on the Details
If you’re in a bidding war for a house, you’ll need to be extremely flexible on the terms of the offer. Don’t put in any clauses that will slow down the sale of the house. Stating that you’ll only close once your own house sells is a recipe for losing your dream home. You may have to carry two mortgages for a short time, but it may be preferable to losing out on the home you’ve dreamed about. Also don’t include a mortgage contingency clause that allows you to back out of the sale if you don’t get the financing you need. (If you’ve been pre-approved, this won’t be a problem.) Sellers hate losing potential home buyers because the current deal falls through.
In the past decade, houses have mostly sold for less than their asking prices, but that’s changing. It’s now a sellers’ market, which means the days of offering a low-ball figure and getting a counter-offer from the seller are over. Make a strong offer from the start. This might mean
It’s usually a good idea to “sleep on it” when you’re buying a house, but if there are multiple bidders or the seller wants to close as soon as possible, respond quickly to any counter-offers. Don’t ask for a few days to think it over; the seller may move on to the next buyer while you’re mulling over your options. Try to respond by the end of the day (or sooner if possible).
Don’t Fester Over Small Details
Five years ago, a home buyer could ask the sellers to do minor repairs before they would sign. This gave buyers a move-in ready home and put the expensive of minor facelifts on the seller. Today if you ask the current owner to cut down a few trees, repaint the exterior or fix the leaky faucet in the sink, the seller will probably move on to a seller who is willing to buy the house “as is.”
Finally, be ready to close as soon as possible and make the closing itself as painless as possible. Have all your documents ready in advance, schedule a time that is convenient to the seller, and make the process as smooth as possible for everyone.
If you’re considering buying a home, you’ve probably evaluated the various costs involved and weighed them against the value of owning your own home. What you should keep in mind is that there are also several Federal tax credits available when you purchase a home that could give you a sizable break on your income tax returns for 2016 and beyond. If you purchased a house in 2015, you may be able to claim some of these credits on your 2015 return. By itemizing your tax return, you can maximize these benefits. Always check with a Federal income tax specialist regarding any of these deductions before filing.
Mortgage Interest Deduction
The majority of your monthly mortgage payments will usually go primarily toward the interest on your loan, and you can deduct this interest when you’re doing your taxes. Your lender will send you a 1098 form that shows how much interest you paid and how much of it you can deduct.
Mortgage Insurance Premiums
If your loan value is greater than 80% of the total value of the home, you will have to carry some kind of mortgage insurance, which protects the lending institution if you default on the loan. Until your equity increases and you can waive the mortgage insurance, you can deduct the cost of the insurance as long as your adjusted gross income is less than $100,000 for a couple or $50,000 for an individual. For higher incomes, the deductible amount will be adjusted down or eliminated.
You can deduct both local and state property taxes if they are based on the assessed value of the property. If your taxes are paid out of an escrow account from your mortgage, you will receive a 1098 form with the total amount of the property taxes you can deduct. If you pay your property taxes yourself, be sure to keep copies of the bills and add them up.
The points you pay at the closing on your house can be deductible if it is your first home mortgage and the house is your primary residence. If you are refinancing an existing mortgage, the points may have to be spread out over the life of the loan.
Energy Efficiency Credits
Installing energy efficient doors, windows and/or skylights can be a great way to save money on your utility bills, but it can also get you a tax credit. You’ll have to install windows, doors or skylights that are Energy Star approved. For more information on EnergyStar, visit the U.S. Environmental Protection Agency, ENERGY STAR program. Keep the receipts and Energy Star labels in case you are audited. If they meet the criteria, you can deduct 10% of their total cost up to a cap of $500 for doors and $200 for windows and skylights.
If you’ve recently purchased a home or will be buying one in 2016, your best bet is to talk to an income tax professional so that you are getting all of the credits allowed without making any costly mistakes.
Today’s smart home buyers and sellers will obtain a “CLUE” report before a sale is finalized. It stands for Comprehensive Loss Underwriting Exchange, after the organization that compiles the information in the report. A CLUE report includes information on the homeowners, including their name, insurance policy number, when and how many losses they’ve sustained, how often they’ve filed claims and whether those claims were denied or paid. In real estate, a CLUE report can be a good idea for both buyers and sellers to have. To learn more about CLUE reports, read the full article “What is a C.L.U.E. Report?” at Mesquite Real Estate Blog.
Any time you buy a home there is the chance that a problem could arise shortly after you’ve purchased the house and moved in, but Pennsylvania Seller Disclosure Laws help protect you if the problem was apparent to the seller before he or she sold you the house. But what does a seller have to reveal to you before you sign on the dotted line?
Pennsylvania’s 68 Pennsylvania Statutes Section 7304 requires all sellers to provide potential buyers with a Seller’s Property Disclosure Statement. This document should including the following information:
Contents of the house (such as dishwashers and other appliances) and their condition, including whether they need to be repaired or replaced
The location and number of working smoke detectors
Whether there is a known problem with sewage lines, septic systems, etc.
Any additional costs the homeowner will incur on a regular basis, such as Home Owners’ Association (HOA) fees or any restrictions on the deed to the property, such as whether mineral rights are included with the sale of the property.
Specifics such as the type of sewer system used on the property
If the house was constructed prior to 1978, the seller will need to provide Title X disclaimer stating whether there is lead-based paint in the home and how it has been treated.
At Look At My Homes, we always strive to give you all the information you need to make the an informed decision about your next home purchase. If you have questions, ask us and we will give you the unvarnished truth. We want your home buying experience to be so good that you will recommend Look At My Homes to your friends and family!
If you’re ready to buy a home in the Ellwood City, PA area, there’s a terrific buyers’ guide available online that can help you through the many steps to home ownership without confusing jargon. It’s got lots of information for anyone buying a home but is especially helpful for first time buyers. New governments rules and banking regulations are both covered in detail to make the process of buying a new house in Ellwood City easier.
The guide outlines the various types of home mortgages available and helps you choose the best home loan for your family, your budget and your lifestyle. You’ll also learn how to prepare for the closing and lots more. Download your copy of the 2016 Home Buying Guide and take those first steps toward owning a home in Ellwood City, PA.