buying a house http://www.wisebread.com/taxonomy/term/821/all en-US The 7 Most Important Financial Moments of Your Life http://www.wisebread.com/the-7-most-important-financial-moments-of-your-life <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-7-most-important-financial-moments-of-your-life" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/parents_new_baby_000061550566.jpg" alt="Parents learning the most important financial moments of their life" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We all have turning points in our life. They are moments when it seems like our future rests on what happens next. Perhaps it's when we met our spouse, or decided on what college to attend.</p> <p>There are a number of moments like these that could have major impacts on our finances, depending on how we react and whether we are prepared. Consider these seven key moments or decisions and how they affect your financial future.</p> <h2>1. You Get Your First Credit Card</h2> <p>Right around the time you graduated high school, you probably got solicitations for credit cards in the mail. If you went to college, credit card companies may have stopped by your dorm or had a booth set up on campus. Credit card companies wanted you when you were young, and once they got you, they wouldn't let go. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-for-college-students?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Best Credit Cards for College Students</a>)</p> <p>For those who haven't gotten a credit card yet, there's a lot you <a href="http://www.wisebread.com/ask-these-7-questions-to-help-choose-the-perfect-credit-card?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">need to know before signing up</a>. Yes, you will want to get a credit card or two in order to <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">build a credit history</a>. But learn to use them with caution. Do your own research and find the credit card that is best for you. (Look for the <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">lowest interest rates</a> and the <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">best rewards</a>.) When you use a credit card, pay your balance in full each time. Get an understanding of how high interest on credit card debt can pile up. If you start off with bad credit card habits, you may enter a debt spiral that will be hard to escape from, and it may have a ripple effect on every aspect of your financial life.</p> <h2>2. You Move Out</h2> <p>Everyone reaches a point in their life when they can no longer mooch off Mom and Dad. If you're lucky, your folks have been letting you shack up in their basement and raid their fridge even after you've long been able to support yourself. But at a certain point, it's time to leave the nest. This is when budgeting and watching your expenses becomes key. It's also a time when you may find that your ambitions are bigger than your finances can allow. Can you really afford that apartment in the city? Are you really planning to go clubbing and eating out with your friends every weekend?</p> <p>It's tempting when you go out on your own to want to live it up, but this is a time when young people often find themselves in financial pickles. Learn to budget, spend sensibly, and understand that it's possible to live the fun, single life without going into debt.</p> <h2>3. You Get Your First Salaried Job</h2> <p>It was a great feeling to get that first paycheck as a teenager, but an even bigger moment was when you landed your first job that you consider part of your &quot;career.&quot; This is the type of job that pays a salary rather than a living wage, and may even offer benefits like a 401K plan.</p> <p>These first big jobs are when you start to actually think hard about where your money is going. You'll want to pay attention to your tax withholding to avoid paying too little or too much tax. You'll want to set a certain amount aside to pay down debt. Once that's taken care of, you'll want to invest. And don't forget about health and life insurance. A big job often means some big financial decisions. Are you ready?</p> <h2>4. You Have Your First Big Emergency</h2> <p>Maybe it's a serious illness. Maybe you totaled your car. Or maybe your heat furnace blew out unexpectedly. Whatever it is, it's going to cost you some money. Did you plan for this? Do you have an emergency fund of three to six months' worth of expenses? It's moments like these that test your financial discipline. Those that come through relatively unscathed are much better off in the long run. And even if you're not prepared this time, you learned enough to be prepared for the next emergency, which may be coming sooner than you think.</p> <h2>5. Your Child Is Born</h2> <p>So you have a new bundle of joy in the house. Wonderful news, and congrats! Are you financially prepared for this? Because kids aren't free. It costs <em>at least</em> $11,000 annually to raise a child in the United States, according to the USDA, and that total could be much higher depending on where you live and any child care costs. Having a child also may impact your investment choices. The good news is that there are tax credits for having children &mdash; but the bad news is that they hardly offset the added expenses.</p> <p>Having a child is an amazing, life-altering event. Just be prepared for how those kids impact your finances.</p> <h2>6. You Decide to Buy a Home</h2> <p>Buying a home is one of the most exciting, but stressful decisions you will ever make. Before taking this plunge, there are a number of big financial questions you'll want to answer. How much money do you have saved for a down payment? How much money will you need to borrow? What's the interest rate and terms of the loan? These are key pieces of information that will impact how much you end up spending in housing each month. You'll get some nice tax breaks when you buy a home, but ideally, you want to spend no more than about one-third of your household income on housing. Otherwise, you may find yourself without enough cash to build an emergency fund, invest, or spend on other necessities.</p> <h2>7. It's Time to Retire</h2> <p>It's the moment of truth. All of the hard work, the saving, the investing. Do you have enough money to last another 20, 30, or even 40 years? Are your investments protected in case of a big market downturn? Do you have a plan for when you might not be able to care for yourself any longer?</p> <p>This is a critical moment in your financial life, but it should be one that is free of drama if you made the right financial choices along the way.</p> <p><em>Any key financial life moments we've overlooked? Tell us about them in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/the-7-most-important-financial-moments-of-your-life">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/use-the-8020-rule-to-maximize-your-financial-opportunities">Use the 80/20 Rule to Maximize Your Financial Opportunities</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/where-to-turn-for-help-when-you-dont-have-an-emergency-fund">Where to Turn for Help When You Don&#039;t Have an Emergency Fund</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-lessons-i-learned-from-dad">10 Money Lessons I Learned From Dad</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance adulthood buying a house emergency funds family financial planning mortgages retirement Thu, 23 Jun 2016 10:30:04 +0000 Tim Lemke 1736532 at http://www.wisebread.com What Is Private Mortgage Insurance, Anyway? http://www.wisebread.com/what-is-private-mortgage-insurance-anyway <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-is-private-mortgage-insurance-anyway" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_fence_house_000024946015.jpg" alt="Woman learning what private mortgage insurance is" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Private Mortgage Insurance is one cost that mortgage borrowers hate to pay. And that's not surprising given than this form of insurance &mdash; Private Mortgage Insurance &mdash; doesn't actually protect homeowners. Instead, it protects mortgage lenders from borrowers who don't make their mortgage payments on time.</p> <p>PMI isn't cheap, either: Freddie Mac says that you can expect to pay from $30 to $70 a month in PMI costs for every $100,000 you have borrowed. According to this formula, you'd pay from $60 to $140 a month in PMI for a $200,000 mortgage.</p> <p>There is good news, though: Conventional mortgage borrowers won't need PMI if they have a large enough down payment. And even if you don't, your lender must drop PMI when you build up enough equity.</p> <h2>The PMI Hit</h2> <p>You'll need PMI if you have a conventional mortgage loan &mdash; one not guaranteed by the government &mdash; whenever you borrow with less than a 20% down payment.</p> <p>Fortunately, PMI isn't permanent on a conventional loan. You can ask your lender to drop PMI when the equity in your home reaches 20%. For instance, if your home originally appraised at $200,000 and you owe $160,000 on your mortgage loan, you now have 20% equity in your residence. If you owe $180,000 on your mortgage and your home is worth $200,000, you only have 10% equity in your home and must keep paying your PMI.</p> <p>If the balance of your mortgage drops to 78% of your home's original appraised value, your lender will automatically drop your PMI.</p> <p>If you want to calculate whether you can eliminate PMI, simply divide the balance of <a href="http://www.wisebread.com/4-reasons-why-youre-too-old-or-too-young-for-a-mortgage-loan" target="_blank">your mortgage loan</a> into the original appraised value of your home. Most often, this appraised value will be the same as your home's original selling price.</p> <h2>Dropping PMI</h2> <p>If you want to drop PMI when your loan value reaches 80% of your home's original purchase price &mdash; which is the same as reaching 20% equity &mdash; you must request the cancellation in writing, sending a letter to your lender. You'll need to be current on your mortgage payments, and you might have to pay for a new appraisal to prove that your home hasn't lost value since you purchased it.</p> <p>When you take out your loan, your lender should provide you with the date on which, if you made your monthly mortgage payments as scheduled, your equity would reach the 20% level. You might reach this equity level earlier, though, if you've made additional payments. You might also reach it sooner if your home appreciates in value. But you'll need a new appraisal to prove that your home's value has risen.</p> <h2>FHA Mortgage Insurance</h2> <p>If you take out a mortgage insured by the U.S. Department of Housing and Urban Development's Federal Housing Administration, you must take out a different form of mortgage insurance. And this insurance is required, no matter how much of a down payment you put down.</p> <p>First, you'll need to make an upfront payment of 1.75% of the amount of your loan. If you take out a mortgage for $100,000, you'll have to pay $1,750 for this upfront premium.</p> <p>You'll also have to pay an annual premium, which you'll pay out in monthly installments throughout the year. For a 15-year fixed-rate loan with a down payment or equity of less than 10%, your annual FHA insurance premium will be 0.7%. For a 15-year loan with a down payment or equity of 10% or more, your annual premium will be 0.45%.</p> <p>For a 30-year loan and with a down payment or equity of less than 5%, your annual insurance premium will be 0.85%. For a 30-year loan with a down payment or equity of 5% or more, your annual insurance premium will be 0.80%.</p> <p><em>Did you have to pay PMI? For how long?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/what-is-private-mortgage-insurance-anyway">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-a-first-time-home-buyer-needs-to-buy-a-house">Everything a First-Time Home Buyer Needs to Buy a House</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-tax-deductions-new-homeowners-shouldnt-skip">4 Tax Deductions New Homeowners Shouldn&#039;t Skip</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-should-be-saving-big-with-bi-weekly-mortgage-payments">Why You Should Be Saving Big With Bi-Weekly Mortgage Payments</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-qualify-for-a-mortgage-with-a-small-downpayment">5 Ways to Qualify for a Mortgage With a Small Downpayment</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-you-shouldnt-buy-a-house-yet">5 Reasons You Shouldn&#039;t Buy a House (Yet)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a house down payments equity new homeowners pmi private mortgage insurance Tue, 03 May 2016 09:00:05 +0000 Dan Rafter 1702378 at http://www.wisebread.com Is Buying a Foreclosed Home Ever a Good Idea? http://www.wisebread.com/is-a-buying-a-foreclosed-home-ever-a-good-idea <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/is-a-buying-a-foreclosed-home-ever-a-good-idea" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/home_sold_sign_000007866517.jpg" alt="Learning if buying a foreclosed home is ever a good idea" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Foreclosures are falling across the country. Real estate site RealtyTrac reports that the number of homes in foreclosure dropped 3% in 2015 compared to the previous year. But while foreclosure activity is dropping in most major cities, there are some metropolises where foreclosed properties still account for too large of a percentage of homes on the market.</p> <p>Here's the question for home buyers: Do high-foreclosure markets actually represent an opportunity? Do these cities give buyers a chance to get into city neighborhoods that they otherwise might not be able to afford?</p> <p>Yes, they do. But buyers have to be careful: Purchasing a home that is in foreclosure can lead to big problems.</p> <h2>Foreclosure Numbers</h2> <p>RealtyTrac said that at the end of 2015, 1.08 million U.S. properties had foreclosure filings on them. These filings include default notices, scheduled auctions, and bank repossessions. This figure is down 3% from the end of 2014.</p> <p>Even more impressive, it's down nearly 62% from 2010. That year saw 2.87 million U.S. properties with foreclosure filings on them &mdash; an all-time high.</p> <p>But five U.S. cities in particular are still struggling with too many foreclosures. RealtyTrac reported that as of the end of 2015, 3.43% of the housing units in the Atlantic City, NJ housing market had foreclosure filings. That's the highest percent of any the major U.S. markets that RealtyTrac charts.</p> <p>Other cities in the top five, according to RealtyTrac, are Trenton, NJ, with 2.14% of its housing stock having foreclosure filings; the Tampa Bay-St. Petersburg-Clearwater metropolitan area of Florida with a foreclosure rate of 2.03%; Jacksonville, FL, at 2.02%; and Miami, FL, at 1.98%.</p> <h2>Opportunities for Investors</h2> <p><a href="http://www.wisebread.com/3-terrible-things-foreclosure-does-to-your-credit">Foreclosures are bad news</a> for neighborhoods. That's because they tend to bring down the sales prices of the homes surrounding them, even those residences not in foreclosure.</p> <p>Say a neighborhood has several foreclosure homes that are selling for less than market value. This makes life difficult for other sellers. Sellers listing their homes at $200,000 will struggle to get that listing price if their neighborhood also features eight similar homes that are in foreclosure and all selling near $150,000.</p> <p>The buyers, looking for bargains, will make offers on those homes first. Other sellers can either lower their asking prices to compete more effectively with the foreclosures, or wait out the wave of local foreclosures in the hopes of nabbing a sales price closer to their actual list price.</p> <p>But while foreclosures might be a burden for sellers, they do present opportunities for buyers. A lower-priced foreclosure could help buyers find homes in neighborhoods that they otherwise couldn't afford.</p> <p>But buying foreclosures can also come with big headaches, mostly because these homes are often in terrible condition.</p> <h2>Foreclosure Traps to Avoid</h2> <p>You'll find the lowest prices for foreclosed homes by buying them at auction. But the auction process is also the riskiest way to buy foreclosures. That's because you won't have the chance to inspect a foreclosed home beforehand.</p> <p>Once you get your &quot;bargain&quot; home, you might find that it needs costly repairs that can quickly eat up the savings you thought you'd enjoy. A foreclosed home purchased through auction might also have liens filed against it, such as liens for outstanding tax payments. You might be on the hook for those unpaid taxes, and need to reach a settlement with the IRS.</p> <p>A safer choice is to buy homes that are owned by a bank. These properties, often referred to as REO or real-estate owned homes, have already been through the foreclosure process, with banks having taken them over. Banks will often sell these homes at prices below market value to get rid of them.</p> <p>The best news for buyers is that banks are required to pay off any liens filed against these properties. Buyers can also hire home inspectors to tour the homes before they buy them. These inspectors can help buyers determine how much they'll need to spend in repairs. Buyers can then calculate whether a particular foreclosure is a bargain or a potential money pit.</p> <p>A foreclosed home can present a savvy investment opportunity under the right circumstances. Do your homework, and you might just come away with a diamond in the rough.</p> <p><em>Have you ever purchased a home out of foreclosure?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/is-a-buying-a-foreclosed-home-ever-a-good-idea">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-happens-at-a-foreclosure-auction">What Happens at a Foreclosure Auction?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-housing-market-is-finally-rebounding">The Housing Market Is Finally Rebounding</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate">The Only 5 Rules You Need to Know About Investing in Real Estate</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-you-need-to-know-about-a-home-appraisal">9 Things You Need to Know About a Home Appraisal</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Ask Yourself These 5 Questions Before Buying a Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing bank owned buying a house foreclosure housing market money pits Fri, 18 Mar 2016 11:30:08 +0000 Dan Rafter 1673870 at http://www.wisebread.com 23 Hidden Costs of Buying an Old House http://www.wisebread.com/23-hidden-costs-of-buying-an-old-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/23-hidden-costs-of-buying-an-old-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_money_000021065464.jpg" alt="Learning the hidden costs of buying an old house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Buying an old house may seem like a great way to save some money. The purchase price is typically much lower than a newer house, especially considering the cost per square foot. Older homes tend to be located closer to downtown areas, which can be convenient and reduce transportation expenses. Plus, you may see potential to fix up an old house yourself and sell it for a profit.</p> <p>However, it's easy to overlook hidden costs that can hit you soon after you buy that old house, all of which trump any potential financial gains. Here are some of the hidden costs I learned about the hard way after I bought a 120-year-old farmhouse.</p> <h2>1. Big Energy Bills</h2> <p>The heating bill for our old farmhouse was over $300 per month before we added insulation. Check the utility bill history before buying an older house to see what kind of energy costs you are signing up for!</p> <h2>2. Air Conditioning</h2> <p>Older houses may not have air conditioning at all, or may only have a window unit in one room. Installing central air costs a few thousand dollars.</p> <h2>3. Furnace</h2> <p>Older houses may have older furnaces. Although a furnace can last 50 years or more, at some point the furnace will become unsafe or ineffective and will need to be replaced at a cost of thousands of dollars.</p> <h2>4. Roof</h2> <p>The roof of a house wears out over time and eventually needs to be replaced. Depending on how many layers of shingles have been installed, you may be able to add another layer, or you may need to tear off all of the roofing material and start over. Be prepared to spend a few thousand dollars if you need a new roof.</p> <h2>5. Exterior Painting</h2> <p>Wood siding requires periodic repainting. You can repaint a house yourself, but this is time consuming. It took me five months to repaint my house, working mostly on weekends and evenings. Hiring someone to repaint a house can cost thousands of dollars depending on the size of the house and the condition of the siding.</p> <h2>6. Siding Replacement</h2> <p>If you don't want to paint wood siding, you can upgrade to vinyl. The biggest problem with this is that new siding can cost $30,000 or more.</p> <h2>7. Window Replacement</h2> <p>Older houses often have single pane glass windows. With respect to energy efficiency, single pane glass windows are almost as bad as leaving the window open. Upgrading windows costs around $300 per window. Older houses tend to have a lot of windows, so this can add up quickly.</p> <h2>8. Lack of Storage</h2> <p>Older houses usually have much less closet space than newer homes. This means you may need to buy wardrobes and other furniture for storage, or install cabinets, or build closets yourself.</p> <h2>9. Electrical Services</h2> <p>Older houses may have an undersized electrical panel. Modern houses need at least 100 amp service to handle appliances and lighting. Upgrading the service panel can cost a few hundred dollars.</p> <h2>10. Electrical Outlets</h2> <p>New houses have abundant electrical outlets in every room, but older houses may only have one or two in each room. If you don't want to use extension cords, you may need to have some outlets installed at a cost of over $100 each.</p> <h2>11. Old Electrical Wiring</h2> <p>The insulation on old electrical wiring starts to crumble and can be a fire hazard. Old wiring is hard to deal with, since it can be difficult to remove and replace with new wiring. Rewiring an old house can be incredibly expensive.</p> <h2>12. Lead Paint</h2> <p>Before 1979, lead paint was used for both interior and exterior surfaces. Older houses may have lead paint, which is hazardous and expensive to remove. You may need to resolve any lead paint issues before you can sell an older house.</p> <h2>13. Asbestos</h2> <p>Another hazard in older houses is the potential to encounter asbestos. Asbestos was used for insulation and may be used in old floor tiles as well. Removing asbestos can be expensive and requires special equipment and expertise.</p> <h2>14. Wet Basement</h2> <p>Older houses may have settled over the years, resulting in cracks in the basement which leads to dampness and water issues. If you are planning to use the basement of an older house for storage or to remodel it into living space, make sure there are no water problems first.</p> <h2>15. Insulation</h2> <p>My old farmhouse had no insulation in the walls or under the floor! I added insulation and was able to recover the cost in a few years from lower energy bills &mdash; but initially, this cost thousands.</p> <h2>16. Well Expenses</h2> <p>If your older house has its own well to supply water, you are responsible for all costs of maintaining the well. I had to replace a well pump at a cost of about $2,000 and then had to add a chlorinator to resolve a bad water test result before I could sell the property.</p> <h2>17. Small Garage</h2> <p>You may be in for a surprise when you try to pull your SUV or minivan into the garage of an older house for the first time &mdash; it may not fit! Measure the garage or try to pull your car in when looking at an older house to make sure you will have a place to park.</p> <h2>18. Water Line for Refrigerator</h2> <p>Refrigerators that dispense water and ice are a relatively new invention. To put one in an older house, you may need to install a water line for your fridge.</p> <h2>19. Old DIY Projects</h2> <p>In an older house, you may encounter old do-it-yourself projects that are not up to code or are just plain ugly and need to be removed and redone. (See also: <a href="http://www.wisebread.com/15-cool-diy-home-improvements-for-50-or-less">15 Cool DIY Home Improvements for $50 or Less</a>)</p> <h2>20. Nothing Is Square</h2> <p>One thing that struck me when I moved from my old farmhouse to a brand new house was how square and level everything was in the new house. Improvements in an old house can be more challenging &mdash; and more expensive &mdash; because nothing is level due to settling over the years.</p> <h2>21. Uneven Steps or Sidewalks</h2> <p>Having uneven steps or sidewalks at an older house may seem like a minor problem, but this presents a trip hazard and it is expensive to correct.</p> <h2>22. Historic Restrictions</h2> <p>Some older houses may be classified as historic. This designation may result in restrictions on the type of remodeling and additions that can be done, and even what color you can paint it. This can force you to spend more than you planned on remodeling and can limit your potential to upgrade an older house and sell it.</p> <h2>23. Endless Projects</h2> <p>Constantly spending money for home improvement and remodeling expenses is a big drag on your budget. Those trips to buy more building materials and paint every weekend add up to significant money. It can easily end up being less expensive to buy a newer house that requires less work than taking on all of the challenges of fixing up an older house, even if the initial purchase price is lower.</p> <p>Before deciding to buy an older house, get a home inspection by an inspector experienced with older houses. Review the inspection report and make a list of all of the upgrades and repairs you think the house needs. Consider all of the hidden costs of buying an older house before taking the plunge.</p> <p><em>Do you live in an old house? How &quot;charming&quot; is it?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/23-hidden-costs-of-buying-an-old-house">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-hidden-housing-costs-new-homeowners-dont-expect">10 Hidden Housing Costs New Homeowners Don&#039;t Expect</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-myths-about-real-estate">6 Myths About Real Estate</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/moving-dont-skimp-on-these-critical-expenses">Moving? Don&#039;t Skimp on These Critical Expenses</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-how-much-rent-you-can-really-afford">The Simple Way to Decide How Much Rent You Can Really Afford</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a house expenses hidden costs home ownership old houses Wed, 10 Feb 2016 18:00:02 +0000 Dr Penny Pincher 1651573 at http://www.wisebread.com Why You Should Be Saving Big With Bi-Weekly Mortgage Payments http://www.wisebread.com/why-you-should-be-saving-big-with-bi-weekly-mortgage-payments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-you-should-be-saving-big-with-bi-weekly-mortgage-payments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mortgage_pay_date_000008692460.jpg" alt="Learning how bi-weekly mortgage plans can save you thousands" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Sending a check to your mortgage lender every two weeks instead of once a month &mdash; through what is known as a bi-weekly mortgage program &mdash; could shorten the length of your mortgage and reduce the amount of interest you'd pay over the life of your loan. But is <a href="http://www.wisebread.com/the-surprising-reasons-your-fixed-rate-mortgage-payment-could-rise">making mortgage payments</a> every two weeks a smart move? Not always.</p> <p>Mortgage experts say that homeowners need to look at their entire financial picture before deciding whether a bi-weekly mortgage program makes sense for them.</p> <p>&quot;There is no one-size-fits-all approach here,&quot; said Chris Birk, education director with Veterans United Home Loans in Columbia, Missouri. &quot;You can't say that a bi-weekly payment schedule is always the smart decision. Often it is. But for other borrowers, it's not always the best choice.&quot;</p> <h2>How it Works</h2> <p>If you sign on to a bi-weekly payment plan through your lender, you'll make mortgage payments every two weeks. Because there are 52 weeks in a year, you'll make 26 payments in a calendar year. If you're good at math, you'll notice that this comes out to an extra month's payment.</p> <p>When you pay off a mortgage loan in the traditional way, you make 12 payments in a year, or one per month. That would come out to 24 bi-weekly payments. But under a bank's bi-weekly payment plan, remember, you are making 26 &mdash; not 24 &mdash; bi-weekly payments. Those extra two payments at the end of the year go directly toward reducing your mortgage loan's principal balance.</p> <p>Say you had a 30-year fixed-rate loan with a balance of $200,000 at an interest rate of 4.4%. If you paid that loan off with traditional once-a-month payments, your monthly payment, not including taxes and insurance, would be $1,001.52. If you took the full 30 years to pay that loan off, you'd pay more than $160,000 in total interest.</p> <p>If you went with a bi-weekly payment plan, you would pay $500.76 every two weeks &mdash; again, not counting taxes and insurance. If you took the full 30 years to pay off your loan, you'd pay just more than $132,000 in total interest. That's a savings in interest of nearly $30,000.</p> <p>You'd also pay off your mortgage loan in 26 years instead of 30.</p> <h2>It's Not Always the Right Choice</h2> <p>The math shows that bi-weekly mortgage plans work: They do reduce the amount of interest you pay each month while shortening the term of your mortgage.</p> <p>But that doesn't mean that a bi-weekly plan is always the right choice.</p> <p>If you plan on living in your home for a short period of time, a bi-weekly mortgage might not make sense. You won't save much in interest if you move out of your home in five years, say.</p> <p>Bi-weekly plans also mean that you'll be sending more money to your lender each year, too. In our example of a 30-year fixed-rate loan of $200,000 with an interest rate of 4.4%, you'd pay about $1,000 more each year under a bi-weekly plan than you would with a traditional repayment program. That might not seem like much money, but if you're attempting to save for a big purchase &mdash; say a child's college education &mdash; that $1,000 could come in handy.</p> <p>Then there's the fact that of all the debt to carry, mortgage debt is usually the most affordable, thanks to the low interest rates that come with it. Homeowners burdened with high interest rate debt, such as credit card debt, should pay more dollars each month toward reducing that debt rather than their mortgage balance.</p> <p>&quot;If you can financially do it, I am always an advocate of being debt-free,&quot; said Rick Roque, managing director of retail with Michigan Mutual in Port Huron, Michigan. &quot;But because mortgage rates are so low, it often doesn't make sense to work so hard to pay off your mortgage debt.&quot;</p> <p>On the flip side, Roque said, by paying off more of your principal balance at a quicker rate, which you would do with a bi-weekly plan, you do gain more access to equity. You can then take out home equity loans to help fund major home improvements or a child's college education.</p> <p>&quot;You do gain a tremendous amount of financial leverage when you have more equity,&quot; Roque said. &quot;You can leverage that equity in your home for emergencies or educational opportunities. That is a powerful tool.&quot;</p> <p>The bottom line? Bi-weekly mortgage plans work. Just consider whether they'll work for your financial needs.</p> <p><em>Are you on a bi-weekly payment schedule?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/why-you-should-be-saving-big-with-bi-weekly-mortgage-payments">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-private-mortgage-insurance-anyway">What Is Private Mortgage Insurance, Anyway?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fallacy-of-homeownership-as-a-sound-investment">The Fallacy of Homeownership as a Sound Investment</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-times-a-refinance-is-the-wrong-move">3 Times a Refinance Is the Wrong Move</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-trade-in-your-car-why-not-your-home">You Trade-In Your Car…Why Not Your Home?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-afford-your-mortgage-payment">Here&#039;s What to Do If You Can&#039;t Afford Your Mortgage Payment</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing bi-weekly mortgage program buying a house equity homeownership lenders mortgage payment plans Thu, 01 Oct 2015 13:00:35 +0000 Dan Rafter 1570347 at http://www.wisebread.com How to Evaluate a Neighborhood Before You Buy http://www.wisebread.com/how-to-evaluate-a-neighborhood-before-you-buy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-evaluate-a-neighborhood-before-you-buy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/fence-194025-small.jpg" alt="neighbor" title="neighbor" class="imagecache imagecache-250w" width="250" height="185" /></a> </div> </div> </div> <p>When it comes to buying a home, the old real estate saying holds true. It's all about &quot;location, location, location.&quot;</p> <p>The neighborhood you live in can make a big difference in whether or not you enjoy your home. You can have a great house, but if you don't like the neighborhood, living there can be unpleasant. (See also: <a href="http://www.wisebread.com/think-you-can-afford-more-house-in-the-exurbs-think-again">Think You Can Afford More House in the Exurbs? Think Again</a>)</p> <p>Our next door neighbors are finding this out for themselves. When they moved in three years ago, they liked the house and the large yard. However, they are an older couple, and our neighborhood is full of starter families and <a href="http://www.wisebread.com/how-big-of-a-house-do-you-really-need">starter homes</a>. They were annoyed with all of the young children running around and the frequent family events and get-togethers. They've moved out, and the house hasn't even sold yet.</p> <p>Before you move in, take the time to evaluate the neighborhood, getting an idea of whether or not you will feel comfortable there. Here are some things to consider as you choose a location.</p> <h2>Schools</h2> <p>This is one of the biggest concerns that many homebuyers have. And why not? Do you want your child to attend a good school? One of the things I like about my son's school is that the test scores are great, and there is a lot of funding for at-risk children. The result is that his class sizes are small for our area, and there is a great enrichment program for him.</p> <p>Even if you don't have children, or if you decide to homeschool your children, it can still be a plus to have good schools nearby if you are looking for resale value. Chances are that whoever buys the house from you will want to know about the schools.</p> <p>You can evaluate schools by checking <a href="http://www.greatschools.org/">GreatSchools.org</a>, and even by visiting the school. If you are really serious about it, attend a PTA meeting, or meet with the school's principal for a tour. Most of the time, this can be arranged, and you can see what resources are available, as well as what kind of parental support you see in the schools.</p> <p>If you are unsatisfied with the more traditional school, you can find out about nearby charter schools and private schools.</p> <h2>Strike Up a Conversation</h2> <p>Nothing gives you the feel of a neighborhood like talking to your potential neighbors. If you see someone outside while you are looking at the house, don't be afraid to ask questions. You don't even need to get into an in-depth conversation. Wave and say, &quot;hi,&quot; and see if the neighbors wave back.</p> <p>Spend a few minutes observing the people and talking to a few of the residents. Are there children for your kids to play with? Does it look like the neighbors get along with each other?</p> <p>You'll get a good idea of what to expect and a feel for whether or not you &quot;belong.&quot; While I don't always feel like I belong in my neighborhood, everyone is nice, and my son has friends to play with &mdash; one of them is exactly his age and right across the street.</p> <h2>Watch for Negative Signs, Too</h2> <p>Pay attention to signs that the neighborhood could be headed for trouble. While there are one or two houses in my neighborhood that have unkempt yards, most of the homes are <a href="http://www.wisebread.com/home-improvements-that-pay-off">neat and well-cared for</a>. The grass is trimmed, flower beds are attractive, and most of the neighbors clear their sidewalks during the winter. These are signs that your potential neighbors take pride in their area and that they care for their things.</p> <p>Also, watch for an abundance of &quot;For Sale&quot; signs. A <a href="http://www.wisebread.com/quick-tip-how-to-sell-your-home-when-your-neighbors-are-too">lot of For Sale signs</a> can be an indication that the neighborhood is struggling. However, it's not the end of the world if there are a lot of homes for sale. Since I live in a starter neighborhood, there are several homes on the market as families, after five or six years, have decided to upgrade. You can look for indications that the home is well-cared for, even though it is for sale. A foreclosure/real estate owned property is likely to look a little shabby. If there are a lot of foreclosure properties in the neighborhood, that's a real red flag.</p> <h2>What's Nearby?</h2> <p>Don't forget to consider nearby amenities. Consider what you value in your lifestyle. Do you like to walk? If so, look for a neighborhood near shopping and restaurants. My husband likes privacy, so we looked for a neighborhood a little outside of the main part of the town with reasonably large yards and a quieter feel.</p> <p>Others, though, prefer to be right in the middle of it all, close to dining, shopping, and entertainment. We like to go out enough that we didn't want to go full-on rural. Instead, we are in a semi-rural neighborhood that is about 15 minutes from the things we like to do. It makes sense for us, and, even though I wish there was better public transportation near our house, we're reasonably happy with the location.</p> <p>You can use tools like <a href="http://www.walkscore.com/">WalkScore</a> to get an idea of what is close to your potential neighborhood. WalkScore helps you figure out what's close in terms of schools, activities, dining, shopping, and entertainment. You can see whether it makes sense to bike or walk, and whether there is public transportation nearby.</p> <p>I am painfully aware that the WalkScore for my neighborhood is 8. That's the one thing I'd change about my neighborhood; I'd like a little better access to amenities.</p> <h2>Bottom Line</h2> <p>Currently, I'm faced with the possibility of moving in the next 12 months or so. I've been thinking about what I want in a neighborhood and how to evaluate what I find. Before you buy, think about the things that would make a neighborhood a pleasant place for you to live. Then, do a little research on communities in your target location.</p> <p>Finally, take the time to visit neighborhoods in the area. All the data in the world can't replace the actual gut feeling you get when you drive through a neighborhood and receive a first impression about how you might function as part of the community.</p> <p><em>Did you research your neighborhood before you bought or rented there? What tools or resources did you use?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/miranda-marquit">Miranda Marquit</a> of <a href="http://www.wisebread.com/how-to-evaluate-a-neighborhood-before-you-buy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-boost-your-neighborhood-and-your-homes-value">8 Ways to Boost Your Neighborhood and Your Home&#039;s Value</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/quiz-am-i-really-ready-to-buy-a-home">Quiz: Am I Really Ready to Buy a Home?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/buy-a-home-you-can-afford-with-the-mortgage-suitcase-trick">Buy a Home You Can Afford With the Mortgage Suitcase Trick</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate">The Only 5 Rules You Need to Know About Investing in Real Estate</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-reduce-mortgage-closing-costs">8 Ways to Reduce Mortgage Closing Costs</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a house first time home buyer neighborhoods neighbors Wed, 29 May 2013 10:24:31 +0000 Miranda Marquit 976251 at http://www.wisebread.com What to Look for in a Fixer-Upper http://www.wisebread.com/what-to-look-for-in-a-fixer-upper <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-to-look-for-in-a-fixer-upper" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/3139490667_aafe34aa01_z.jpg" alt="fixer upper" title="fixer upper" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>The housing market is definitely improving, and many of my friends are looking to purchase a new house. The problem is that in many areas inventory is quite low, and it is getting difficult to snatch a perfect house at a great price. However, if buyers are willing to put in some time and work, they are still able to find fixer-uppers that are worthwhile. Here are some tips on what to look for in a fixer-upper. (See also: <a href="http://www.wisebread.com/9-costly-things-new-homeowners-dont-prepare-for">9 Costly Things New Homeowners Don't Prepare For</a>)</p> <h2>Location</h2> <p>Location is extremely important in choosing a house. It is better to buy a fixer-upper in a nice neighborhood rather than a pristine and perfect house in a war zone area riddled with crime. Generally, houses in nicer neighborhoods have greater value to begin with, and whatever improvements you make will give you more return on your money. You should also look at the neighbors' houses on the same street and see how much you need to improve the house to make it fit in.</p> <h2>Age of House</h2> <p>Generally, newer homes have certain features that are more updated. For example, plumbing and electrical systems are usually better, and newer homes are up-to-date with modern building codes. From what I've seen, newer homes also have better insulation and are more <a href="http://www.wisebread.com/what-americans-can-learn-from-how-the-rest-of-the-world-saves-energy">energy efficient</a>. These features may not be so visible, but they can be very expensive for you to fix. If you do buy an older home, you should check if these major systems have been updated. If you need to upgrade a house's infrastructure to comply with current laws or insurance requirements, then it can be quite expensive.</p> <h2>Costs and Savings</h2> <p>One reason to buy a fixer-upper is to save a little bit of money. To do that you need to assess how much the repairs will cost and have a reserve fund of cash to pay for those fixes. You should definitely get a professional home inspection and also estimate how much cosmetic repairs would cost. If there are major structural issues that cost tens of thousands of dollars to fix, it may not be worthwhile to purchase the house.</p> <p>The <a href="http://www.wisebread.com/home-improvements-that-pay-off">fixes that get you the most bang for the buck</a> are really the cosmetic ones, and that is why the best fixer-uppers are the ones that have great &quot;guts and bones&quot; but need a fresh coat of paint and some new flooring. The cost of paint and flooring is usually pretty easy to figure out, but major structural changes to the foundation and walls may become a real money pit.</p> <h2>Your Time</h2> <p>If you want to deal with a fixer-upper, then you really need to figure out how much time you have to devote to it. If you don't do the work yourself, then you will need to research which contractors to use, and for cosmetic changes you will need to pick out all the colors and styles. Depending on how much work there is to be done, it may take weeks to months before you can actually move into the house.</p> <p>Some people love customizing their homes, but some really just want a move-in-ready house. If you do not have a lot of time to deal with a project, then it might be better to just pay a little more for a pristine house.</p> <p>While the <a href="http://www.wisebread.com/the-housing-market-is-finally-rebounding">market is tightening</a>, I think that it is still possible to get a deal on fixer uppers if you are willing to do the research and follow up work. However, it may not be a great idea for those who do not have a decent cash reserve and the time to do the legwork. I've only purchased houses that needed cosmetic fixes, and that is because I don't have a lot of time and money to devote to major fixer uppers.</p> <p>One last consideration &mdash; it is better to get a house at a lower price because your tax basis will be lower, and that may save you money for many years to come.</p> <p><em>Have you purchased a fixer upper?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/what-to-look-for-in-a-fixer-upper">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-costly-things-new-homeowners-dont-prepare-for">9 Costly Things New Homeowners Don&#039;t Prepare For</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With Cash</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-private-mortgage-insurance-anyway">What Is Private Mortgage Insurance, Anyway?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-improve-your-curb-appeal-for-next-to-nothing">6 Ways to Improve Your Curb Appeal for Next to Nothing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a house fixer upper home improvement Tue, 01 Jan 2013 10:30:20 +0000 Xin Lu 961639 at http://www.wisebread.com Buy a Home You Can Afford With the Mortgage Suitcase Trick http://www.wisebread.com/buy-a-home-you-can-afford-with-the-mortgage-suitcase-trick <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/buy-a-home-you-can-afford-with-the-mortgage-suitcase-trick" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/2921978502_7a0f8414c8_z.jpg" alt="house" title="house" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Raise your hand if you&rsquo;ve ever tried to stuff more than you really need into a suitcase. You begin with good intentions, wanting to make sure you have everything you need for your trip. You don&rsquo;t really know if you&rsquo;re going to need that extra sweatshirt, but you throw it in just in case. Before you know it you&rsquo;re sitting on the lid of your overflowing suitcase just to get it closed. Although you&rsquo;re finally able to zip it up, the real bummer is that you have to drag around that heavy suitcase your whole trip.</p> <p>Unfortunately, this scenario of trying to stuff in more than you really need isn&rsquo;t just limited to packing your bags. When buying a home, it&rsquo;s easy to convince ourselves to buy more than we need even though it stretches our budget. As a result we end up dragging around tens of thousands of extra mortgage debt for the life of our 15-30 year loan.</p> <p>The mortgage suitcase trick is simple and can help you avoid buying too much home. Picture your housing budget as a suitcase. Every time you think about adding another feature or upgrade during your home buying decision, ask yourself if you really want to lug around the cost of that feature for the next 15-30 years.</p> <p>While the mental image of a heavy suitcase busting at the seams can be an overspending deterrent, I know sometimes it helps to have more concrete guidelines. So here are four tips that can help you avoid overloading your mortgage suitcase. (See also: <a href="http://www.wisebread.com/quiz-am-i-really-ready-to-buy-a-home">Quiz: Am I Really Ready to Buy a Home?</a>)</p> <h2>1. Know Your Limits</h2> <p>Before you even start looking at homes figure out <a href="http://moneysmartlife.com/how-much-house-can-you-afford/" target="_blank">how much house you can afford</a>. Just because you&rsquo;re pre-approved for a certain amount doesn&rsquo;t mean you have to spend that much or that you can really afford it.&nbsp;</p> <p>It helps to run through some &ldquo;what-if&rdquo; scenarios to future-test the limit you decide on. What if one person decides they want to stay at home with the kids? What if you lose your job for six months? Whether you&rsquo;re looking at a <a href="http://moneysmartlife.com/30-year-mortgage-vs-15-year-mortgage/" target="_blank">15 or 30 year loan</a>, a lot can change in your life during that time, so try to take that into account.</p> <h2>2. Define Your Priorities</h2> <p>There are many different factors that come into play when you&rsquo;re trying to find the right place to live. Chances are you&rsquo;re not going to be able to get everything you want in a home, so it helps to prioritize what is most important to you.</p> <p>This list will come in really handy when you&rsquo;re comparing multiple properties and having a tough time choosing which you want and how much money to offer the owner.</p> <h2>3. Don&rsquo;t Shop Up</h2> <p>My wife likes to watch these house-hunter shows that start with the potential buyer listing off everything they&rsquo;re looking for and what they want to spend. Many times the real estate agent will tell them they can&rsquo;t get everything they want at the price they&rsquo;ve set and will proceed to show them <a href="http://www.wisebread.com/how-big-of-a-house-do-you-really-need">more expensive homes</a>.</p> <p>Once you see the home that meets all your criteria, you&rsquo;re going to want it. However, if you can&rsquo;t afford it then, you&rsquo;re just making yourself unhappy by looking at it. Two unfortunate scenarios often result from shopping up:</p> <ol type="1" start="1"> <li>Your emotions overcome logic, and you&rsquo;ll break your budget to buy the home.</li> <li>You don&rsquo;t buy it but &ldquo;settle&rdquo; for less and are unhappy with the home you buy.</li> </ol> <h2>4. Beware Payment Justification</h2> <p>When you&rsquo;re going through the process of buying a home, most everyone involved will be happy to tell you that a more expensive property &ldquo;only raises your monthly payment by a little.&rdquo; Your realtor wants you to buy. Your bank is probably happy to lend you more. Sometimes your spouse/partner/friend will even jump on board and argue the case that another $20-30K doesn&rsquo;t raise your payments that much.</p> <p>If you&rsquo;ve done steps #1 and #2, then you&rsquo;ll know what you can afford and what&rsquo;s important to you. Don&rsquo;t <a href="http://www.wisebread.com/friends-and-goals-dont-let-a-blue-falcon-bring-you-down">let other people talk you into spending more</a> than you&rsquo;re comfortable with. You&rsquo;re the one who has to get out of bed and go into work every day for the next 20 years to pay off the mortgage.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ben-edwards">Ben Edwards</a> of <a href="http://www.wisebread.com/buy-a-home-you-can-afford-with-the-mortgage-suitcase-trick">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-evaluate-a-neighborhood-before-you-buy">How to Evaluate a Neighborhood Before You Buy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-shouldn-t-buy-a-home-if">You Shouldn’t Buy a Home If…</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/quiz-am-i-really-ready-to-buy-a-home">Quiz: Am I Really Ready to Buy a Home?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-reduce-mortgage-closing-costs">8 Ways to Reduce Mortgage Closing Costs</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a house first time home buyer home mortgage small houses Mon, 26 Nov 2012 10:36:38 +0000 Ben Edwards 955494 at http://www.wisebread.com Quiz: Am I Really Ready to Buy a Home? http://www.wisebread.com/quiz-am-i-really-ready-to-buy-a-home <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/quiz-am-i-really-ready-to-buy-a-home" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/6037999486_531d422d5d_z.jpg" alt="couple on a car" title="couple on a car" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Home prices are on the uptick for the first time in several years, which means that you may have a limited window of opportunity to become a homeowner before prices shoot through the proverbial roof again.</p> <p>I don&rsquo;t have to tell you that buying a home is serious business, a major milestone, a huge responsibility, and probably the largest purchase you&rsquo;ll ever make, but are you asking yourself the right questions to make sure that you&rsquo;re prepared for all the amazing and not-so-amazing aspects of home ownership? (See also: <a href="http://www.wisebread.com/9-costly-things-new-homeowners-dont-prepare-for">9 Costly Things New Homeowners Don't Prepare For</a>)</p> <p>To help you decide whether you&rsquo;re ready or not, I&rsquo;ve designed this quick quiz. Answers are below. No cheating!</p> <p><strong>1. When contemplating the decision to buy a home, what&rsquo;s the first thing you should do?</strong></p> <ol type="A"> <li>Contact a loan officer</li> <li>Take a good look at your finances</li> <li>Call a real estate agent</li> <li>Attend a few open houses</li> </ol> <p><strong>2. When you start looking for the perfect home, what should you have?</strong></p> <ol type="A"> <li>Cash for a down payment</li> <li>A good credit score</li> <li>A steady source of income</li> <li>All of the above</li> </ol> <p><strong>3. What&rsquo;s the best way to calculate the price range in which you should be shopping for a home?</strong></p> <ol type="A"> <li>Your anticipated monthly payment is 30% of your income, to include your mortgage, taxes, and insurance fees</li> <li>Add up all your assets, and work with 50% of the sum</li> <li>Multiply your current rent by three</li> <li>Multiply your annual salary by 30, then divide it by two</li> </ol> <p><strong>4. How much cash should you save for a down payment?</strong></p> <ol type="A"> <li>7% of the purchase price</li> <li>10% of the purchase price</li> <li>17% of the purchase price</li> <li>20% of the purchase price</li> </ol> <p><strong>5. To secure the best mortgage rate, what&rsquo;s the minimum FICO credit score you must have?</strong></p> <ol type="A"> <li>560</li> <li>660</li> <li>760</li> <li>860</li> </ol> <p><strong>6. How much money should you set aside for closing costs?</strong></p> <ol type="A"> <li>1% to 2% of the purchase price</li> <li>3% to 6% of the purchase price</li> <li>7% to 9% of the purchase price</li> <li>10% to 12% of the purchase price</li> </ol> <p><strong>7. If you don&rsquo;t have the cash for closing costs, you should put your dream of owning a home on hold.</strong></p> <ol type="A"> <li>True</li> <li>False</li> </ol> <p><strong>8. The bank has approved you for a loan that exceeds the budget you set for yourself by $50,000. You should:</strong></p> <ol type="A"> <li>Accept it. Now you can get a house with a pool.</li> <li>Politely decline and tell the loan officer where to stick it.</li> <li>Use the extra $50,000 to buy a new car.</li> <li>Reexamine your budget to see if you can afford it.</li> </ol> <p><strong>&nbsp;9. How long should you plan to live in your new home for it to make good financial sense to buy?</strong></p> <ol type="A"> <li>3 years</li> <li>5 years</li> <li>7 years</li> <li>10 years</li> </ol> <h2>ANSWERS</h2> <h3>1. B</h3> <p>Before you can start the home-buying process, you need to examine your budget so you know where you&rsquo;re at with your finances and to find out how much you can afford to spend on a home. Using your existing budget, it&rsquo;s not a bad idea to create an anticipatory budget too, which should include your monthly mortgage payment, insurance, property taxes, and other <a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">associated costs of home ownership</a>. This will help you determine if your budget can handle these expenses.</p> <h3>2. D</h3> <p>In this economy, cash for a down payment is important to a lender &mdash; it lets them know you&rsquo;re a serious buyer and that you&rsquo;re responsible &mdash; and a good credit score will help you lock in a low interest rate. Of course, to save for a down payment and establish a good credit score, you&rsquo;ll need a reliable, steady source of income in the form of a full-time job.</p> <h3>3. A</h3> <p>Financial experts suggest that the percentage of your monthly income that you should use to establish a budget for home buying should be from 25% to 33%, which makes 30% a safe compromise.</p> <h3>4. D</h3> <p>If you don&rsquo;t want to pay for private mortgage insurance, 20% of the purchase price is the sweet spot that you should aim for when saving for your down payment. Anything less will require you to purchase private mortgage insurance so the lender is protected from default on the loan. However, it doesn&rsquo;t hurt to save even more than 20% to put toward the down payment so you can ensure that you get the lowest interest rate possible.</p> <h3>5. C</h3> <p>A FICO score of 760 or higher will help you lock in the best mortgage rates. If your <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">score is lower than 760</a>, you&rsquo;ll still be able to purchase a home, but you&rsquo;ll pay for it in the long run with a higher mortgage rate.</p> <h3>6. B</h3> <p>Between 3% and 6% of the purchase price of the home is the ideal margin of savings you should have for closing costs. These costs usually consist of loan origination fees, title insurance, attorneys&rsquo; fees, property taxes, transfer taxes, and other fees.</p> <h3>7. B</h3> <p>You don&rsquo;t necessarily have to give up your dream of owning a home if you&rsquo;re short on the closing costs. While it&rsquo;s ideal to have that cash on hand to avoid a high monthly payment because you had to finance the closing costs, you can also ask the seller to cover closing costs, especially if the place is a fixer-upper.</p> <h3>8. D</h3> <p>Remember when the government bailed out the banks a few years ago? That was largely due to large loans given to homeowners who couldn't afford them, resulting in the inability of the homeowners to pay them. To avoid the trap if the bank approves you for a loan more than you think you can afford, re-crunch your numbers to see what makes sense. Just because more money is available doesn&rsquo;t mean you have to take it &mdash; because eventually you will have to pay it back.</p> <h3>9. B</h3> <p>It takes about five years to build up equity in a home, the amount of which increases as you make payments toward the mortgage loan. If you don&rsquo;t plan to stay in your new home for at least half a decade, <a href="http://www.wisebread.com/when-you-should-and-shouldnt-rent">it may not be a good decision to buy</a>.</p> <p>Buying a home is a big decision and one that will change your life &mdash; most of the time for the better &mdash; but it&rsquo;s important to ensure that you&rsquo;re financially secure before embarking on this milestone. While home ownership comes with plenty of perks, it also comes with lots of problems &mdash; problems that you have to fix, and fixing them will usually cost money. Use this quiz as a guideline to help you make the initial decision on whether or not to start the home-buying process, but ultimately it&rsquo;s your own common sense that will dictate if you&rsquo;re ready to take the plunge yet.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/quiz-am-i-really-ready-to-buy-a-home">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-evaluate-a-neighborhood-before-you-buy">How to Evaluate a Neighborhood Before You Buy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">What It Really Costs to Own a Home</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-shouldn-t-buy-a-home-if">You Shouldn’t Buy a Home If…</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/buying-your-first-home-what-to-do-and-when-to-do-it">Buying Your First Home: What to Do and When to Do It</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/buy-a-home-you-can-afford-with-the-mortgage-suitcase-trick">Buy a Home You Can Afford With the Mortgage Suitcase Trick</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Real Estate and Housing buying a house down payment first home first time home buyer Tue, 20 Nov 2012 10:24:32 +0000 Mikey Rox 955350 at http://www.wisebread.com The Housing Market Is Finally Rebounding http://www.wisebread.com/the-housing-market-is-finally-rebounding <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-housing-market-is-finally-rebounding" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/4629169207_05751fefb6_z.jpg" alt="sale sign" title="sale sign" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>The housing market is rebounding. Really.</p> <p>After many premature predictions and optimistic announcements, the housing market has indeed turned a corner. Home prices and sales are up. Foreclosures and mortgage delinquencies are down.</p> <p>Average home prices in the top 20 metro areas were up 1.6% in July from a year ago, according to the S&amp;P/Case Shiller Home Price Indices. All 20 cities in the index reported rising home prices for the third month in a row.</p> <p>&quot;All in all, we are more optimistic about housing. Upbeat trends continue,&quot; said David M. Blitzer at S&amp;P Dow Jones Indices.</p> <p>The median existing-home price, including all housing types, was $183,900 in September, up 11.3% from a year ago, according to the National Association of Realtors. The year-over-year monthly home prices have increased for seven months in a row. The last time that happened was from November 2005 to May 2006.</p> <p>&quot;Despite occasional month-to-month setbacks, we're experiencing a genuine recovery,&quot; said Lawrence Yun, NAR chief economist. &quot;More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest.&quot; (See also: <a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">What It Really&nbsp;Costs to&nbsp;Own a Home</a>)</p> <h2>The Buyer's Market Is Over</h2> <p>What's more, the buyer's market may be coming to an end as sentiment begins to favor sellers. A survey by RedFin, a technology-based real estate brokerage firm, showed that homebuyers believe the market may be shifting against them. Out of 982 homebuyers polled this summer, 46% said they believe that now is a good time to buy. That was down from 56% in the first quarter and 48% in the second quarter. Thirty-two percent think now is a good time to sell, up from 13% in the first quarter and 28% in the second quarter.</p> <p>Importantly, many homebuyers, 61%, believe home prices will increase, up from 32% in the first quarter. More buyers are coming across competition or even bidding wars for a limited number of homes being sold &mdash; 71% of respondents reported encountering competition on at least one offer.</p> <p>Homes are also selling faster. The median time on the market in September dropped 30.7% from 101 days in September 2011, another indication that housing has strengthened.</p> <h2>Too Many Buyers for Homes</h2> <p>The problem for home buyers is the shortage of homes being sold. In parts of the West, the shortage is especially acute, Yun said. The number of existing homes listed for sale fell 3.3% to 2.32 million at the end of September. That's down 20% from a year ago.</p> <p>Fewer homes being sold means rising prices, a trend that will accelerate unless home builders ramp up construction fast, Yun said.</p> <p>Why the shortage? Homeowners who bought their homes before the housing bubble bust are unwilling to sell now and take a loss. Homebuilders all but stopped home construction during the recession, and a wave of foreclosures hitting the market has failed to materialize.</p> <h2>Home Buying Is for the Fast and Ready</h2> <p>Real estate agents advise home buyers &mdash; don't fret about home price trends. If you love a house and are comfortable with the mortgage payments, make an offer.</p> <p>If you want to buy a home, don't keep waiting in an attempt to &quot;<a href="http://www.wisebread.com/once-again-safe-as-houses">wait for the bottom</a>.&quot; By the time you've concluded home prices have hit bottom, they'll probably already be rising. And even if prices do fall in your area, interest rates may rise. That will make mortgages more expensive, defeating the purpose of seeking affordable housing.</p> <p>Don't be too picky. You might not find your dream house, especially with fewer homes on the market than potential home buyers. Don't worry about appliances, colors of the walls, or weeds in the yard. You can always replace a refrigerator and paint walls latter.</p> <p>Be ready and fast. Obtain <a href="http://www.wisebread.com/buying-first-home/home-loans">mortgage preapproval</a>. Submit your financial documentation to a lender to get preapproval for a maximum home loan amount. Get to know the neighborhood where you're house hunting. Learn about multiple-offer situations and plan out what you'll do.&nbsp;</p> <h2>Should You Buy a House Now?</h2> <p>So should you should you rush to by a home before home prices increase even more? It depends.</p> <p>Because real estate is local, prices in your area might not follow national trends or the trend in a nearby metro area. Examine local home values when you're home shopping, not national or regional price indexes.</p> <p>Regardless of the home price outlook, before you jump into home buying, your personal and career situation should be settled enough for you to stay put for at least a few years. Buying a home is not like speculating in gold or stocks. You can sell a commodity like a stock fairly easily, but when you buy real estate, you pay an assortment of mortgage closing costs and fees. When you sell, you pay the real estate agent a commission. For that reason, you should plan to keep the property for at least several years to make the investment worthwhile.</p> <p>Your financial house, so to speak, should be in order, your credit good enough to obtain a favorable home loan rate, and a savings large enough for a down payment &mdash; ideally at least 10% but ideally 20% to avoid private mortgage insurance, which insures the lender and brings no benefit to you.</p> <p>You should be ready to pay for maintenance and repairs or to <a href="http://www.wisebread.com/5-household-fixes-you-should-stop-paying-others-for">fix things yourself</a>. Unlike a renter who calls the landlord when a faucet leaks, you'll be responsible for mowing the lawn and fixing anything that breaks.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/the-housing-market-is-finally-rebounding">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-buying-a-foreclosed-home-ever-a-good-idea">Is Buying a Foreclosed Home Ever a Good Idea?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate">The Only 5 Rules You Need to Know About Investing in Real Estate</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-you-need-to-know-about-a-home-appraisal">9 Things You Need to Know About a Home Appraisal</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Ask Yourself These 5 Questions Before Buying a Home</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-important-things-you-need-to-know-about-the-housing-market-in-2016">6 Important Things You Need to Know About the Housing Market in 2016</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Financial News Real Estate and Housing buying a house foreclosures housing market Fri, 16 Nov 2012 10:36:50 +0000 Michael Kling 955599 at http://www.wisebread.com What Happens at a Foreclosure Auction? http://www.wisebread.com/what-happens-at-a-foreclosure-auction <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-happens-at-a-foreclosure-auction" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/8121906840_d3a626fa68_z.jpg" alt="bidders" title="bidders" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p><a href="http://www.baltimoresun.com/business/real-estate/wonk/bs-re-corelogic-completed-foreclosures-continue-to-decline-20121031,0,4507778.story">Foreclosures have declined recently</a>, but many houses are still being auctioned on courthouse steps across the country. Recently I attended one of these auctions; here is a run down of what happened and what I learned. (See also: <a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With&nbsp;Cash</a>)</p> <h2>Finding a Foreclosure Auction Near You</h2> <p>Generally the list of houses up for auction are posted at an official building in each county, and many listings are also accessible online through listing services such as <a target="_blank" href="https://www.lpsasap.com/">LPS Agency Sales and Posting</a>. These auctions are also called trustee's sales because the trustee of the mortgage is making the property available.</p> <p>The auction we attended was for Solano County in California, which covers about a dozen cities. We arrived at the Vallejo City Hall a few minutes before the scheduled auction. The auctions happen on the front steps of city hall twice a day. When we arrived, the auctioneer was sitting on the ground filling out forms. A few more people filed in and waited quietly.</p> <h2>The Auction Process</h2> <p>The auctioneer stood up and asked if everyone was ready, and then she started the auction by reading out all the listings that were canceled or postponed. Many houses get taken off the auction block because the banks have worked out a short sale or decided to modify the loan, and cancelations can happen as late as the date of the auction. After she rattled off a dozen numbers and addresses, she finally got to the actual houses for sale.</p> <p>The first house was a 2,000 sq ft property in Vallejo, and the opening bid was $147,000.</p> <p><strong>Bidding Requirements</strong></p> <p>Before bidding, the qualified bidders stepped up to show the auctioneer their money. Basically, you can only bid if you can show that you have cashiers checks that can cover the amount of the bid. The bidders all have hundreds of thousands of dollars in cashiers checks in their pockets. A few people went up with their envelopes and then the bidding began.</p> <p><strong>The Bidding</strong></p> <p>The first bid was for a penny over the opening bid, then bids of $100 and $500 came in from two or three bidders. Finally the house was sold to a bidder for $158,000. After it was sold, the winner and the auctioneer stepped to the side to fill out forms, and the buyer gave the auctioneer a number of cashiers checks adding up to at least the bid amount. Any overage would be refunded later. The whole process took about 10 minutes.</p> <h2>For Buyers With Cash, Savings Are Substantial</h2> <p>During one of the breaks we talked to the winner of the first house. He told us that usually buyers can get 25% to 30% off the market price at auction. For example, the property he purchased for $158,000 was probably worth around $200,000. However, the risk is that buyers can't inspect the inside of the houses they buy, and they are responsible for any liens such as back taxes or unpaid utilities. Buyers also need cash to close the transaction right on the spot. For these reasons, buyers are mostly professional investors or work for bigger companies.</p> <p>After they purchase these houses, they often have to deal with the unpleasant business of evicting the former owners and <a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">making any necessary repairs</a>. Currently many investors are renting out houses after they buy them. They are planning to sell after the housing market recovers further. The bidder we spoke to works for a company, and he said that he buys one or two houses per day.</p> <h2>Too Many Houses, Too Few Buyers?</h2> <p>In the end only a few houses sold. Many listings went back to the bank because the starting bid was much higher than the current market price. The investors had all done their research, so they did not bid on those properties. The houses that go back to the lender eventually will end up on the open market or will be sold to other investors in batches.</p> <p>It is definitely possible to make money on these properties if you do your research and a lot of legwork in attending auctions in your area. I felt like it was actually much more transparent than <a href="http://www.wisebread.com/how-to-choose-a-real-estate-agent">buying a house from a realtor</a> because everyone knows the bids, and there isn't a lot of competition. The deal also closes right away, so it is a much more efficient process. However, it is definitely not the way to buy a house for those who need a loan or those unprepared to make substantial repairs on their new, formerly foreclosed property.</p> <p><em>Have you thought about purchasing a house at a foreclosure auction?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/what-happens-at-a-foreclosure-auction">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-things-you-should-know-before-buying-a-foreclosed-home">7 Things You Should Know Before Buying a Foreclosed Home</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-buying-a-foreclosed-home-ever-a-good-idea">Is Buying a Foreclosed Home Ever a Good Idea?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With Cash</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-long-can-you-stay-in-your-home-after-you-stop-paying-the-mortgage">How Long Can You Stay in Your Home After You Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing auction buying a house foreclosure Wed, 14 Nov 2012 10:36:46 +0000 Xin Lu 955195 at http://www.wisebread.com Best Money Tips: Steps to Buying a House http://www.wisebread.com/best-money-tips-steps-to-buying-a-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-steps-to-buying-a-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/2363244104_7b1deb0fb0_z-1.jpg" alt="Steps to Buying a House" title="Steps to Buying a House" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found some awesome articles on steps to buying a house, reasons you need a spending plan, and Black Friday myths exposed.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.thousandaire.com/9-big-steps-to-buying-a-house/">9 Big Steps to Buying a House</a> &mdash; When buying a house, don't forget to get an inspection. [Thousandaire]</p> <p><a href="http://www.freemoneyfinance.com/2012/10/6-reasons-you-need-a-spending-plan.html">6 Reasons You Need a Spending Plan</a> &mdash; It is important to have a spending plan because you need to understand where your money is going. [Free Money Finance]</p> <p><a href="http://livingonthecheap.com/2012/10/14-black-friday-myths-exposed/">14 'Black Friday' myths exposed</a> &mdash; Just because you see a leaked Black Friday ad doesn't mean it's accurate. [Living on the Cheap]</p> <p><a href="http://www.stackthechips.com/3-things-to-save-on-3-things-to-splurge-on/">3 Things To Save On / 3 Things To Splurge On</a> &mdash; It is ok to splurge on under garmets, but just make sure to save on food. [Stack The Chips]</p> <p><a href="http://www.freemoneywisdom.com/5-simple-tips-to-saving-money-on-your-energy-bills/">5 Simple Tips to Saving Money on Your Energy Bills</a> &mdash; Save money on your energy bills by air drying your clothes. [Free Money Wisdom]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.savvysugar.com/Steps-Take-After-Job-Interview-2871452">5 Steps To Take After A Job Interview</a> &mdash; After you interview for a job, critique your performance. [SavvySugar]</p> <p><a href="http://www.thedigeratilife.com/blog/upside-down-car-loan/">How To Escape An Upside Down Car Loan</a> &mdash; Want to escape your upside down car loan? Consider selling your car. [The Digerati Life]</p> <p><a href="http://www.thewisdomjournal.com/Blog/9-signs-youre-financially-dysfunctional/">9 Signs You Are Financially Dysfunctional</a> &mdash; You may be financially dysfunctional if you are only enjoying relative success. [The Wisdom Journal]</p> <p><a href="http://dqydj.net/how-to-get-started-investing-when-youre-hopelessly-clueless-or-dont-care/?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+DQYDJ+%28Don%27t+Quit+Your+Day+Job%29">How to Get Started Investing When You're Hopelessly Clueless (Or Don't Care!)</a> &mdash; Are you trying to get started investing but don't know what you are doing? Look into Target Date Funds! [Don't Quit Your Day Job]</p> <p><a href="http://parentingsquad.com/the-list-what-to-take-the-hospital-when-having-a-baby">The List: What to Take to the Hospital When Having a Baby</a> &mdash; If you are going to be headed to the hospital and having a baby soon, remember to pack your toiletries. [Parenting Squad]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/best-money-tips-steps-to-buying-a-house">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/renting-is-cheaper">Renting is cheaper</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-ready-for-home-ownership">Are You Ready for Home Ownership?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/real-estate-appraisals-ten-things-most-people-just-dont-understand-about-them">Real Estate Appraisals - Ten things most people just don&#039;t understand about them</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With Cash</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-should-you-fire-your-real-estate-agent">When Should You Fire Your Real Estate Agent?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing best money tips buying a house house real estate Wed, 24 Oct 2012 07:59:00 +0000 Ashley Jacobs 955321 at http://www.wisebread.com The Process for Purchasing a House With Cash http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-process-for-purchasing-a-house-with-cash" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/front_porch.jpg" alt="Woman and kids on front porch" title="Woman and kids on front porch" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Several years ago I wrote an article about <a href="http://www.wisebread.com/the-pros-and-cons-of-paying-cash-for-a-house">the pros and cons of paying cash for a house.</a> Some readers asked me how this can be done and what the procedures are. Last year my husband and I actually did purchase a property with cash, and here is our experience. (See also: <a href="http://www.wisebread.com/going-green-how-to-live-a-nearly-cash-only-life">How to Live a (Nearly) Cash-Only Life</a>)</p> <p>The property we bought was listed on the public multiple listing service. It was bank owned, so I called the listing agent and asked for an appointment. The listing agent immediately told us that the bank could only accept cash offers at this point because the property already has another cash offer on it. After seeing it and finding that it was in great condition, I made a pretty fair offer that was about 95% of the listing price. I also had to submit evidence of my funds along with my offer. The bank gladly accepted, and I sent in an earnest deposit check for $5,000. This check was then put into escrow towards the purchase of the house.</p> <p>Next, we hired an inspector to look at the property to see if there are any defects. Unfortunately, the air conditioning system was broken, but the bank refused to pay for it, and we agreed to fix it out of pocket. The bank did agree to pay for title insurance, half of the escrow fee, and clear all liens from the property. So I made sure that all the unpaid bills and taxes on the property were paid before closing.</p> <p>Meanwhile, I was gathering my funds all into one account so that I could send it into escrow before closing. We were able to choose our closing date to be the end of June, since we didn't have to deal with a loan. This was advantageous to us, since the bank had to pay all the property taxes for the first half year. I asked for the HUD closing statement about three days before closing and made sure that everything looked correct.</p> <p>On the day before closing, I made sure all the funds were in my account and then sent the money to escrow. Everything went fairly smoothly, and the whole process took about three weeks from looking at the property to getting the keys. The closing costs were less than 1% of the price of the property because we didn't have to deal with a loan.</p> <p>We were able to fix the air conditioner for a very fair price, and we rented the property out after several weeks of open houses. Now that we've owned the property for more than six months, we are actually eligible to take money out via a cash out refinance, but we don't need the money right now. The point is that if we didn't make a cash offer, then we would not have been able to procure this property at all. Basically, the process to buying a house with a cash on the open market is pretty much the same as <a href="http://www.wisebread.com/buying-first-home/home-loans">buying a house with a loan</a>, but you have more flexibility on the closing date, and that is a competitive advantage over offers with a loan contingency. You don't have to sign as many papers, but you still have to do your due diligence and make sure that you have a bit of cash buffer left over after the purchase for possible repairs and improvements. &nbsp;</p> <p><em>What do you think? Are you thinking of buying a house with cash?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-private-mortgage-insurance-anyway">What Is Private Mortgage Insurance, Anyway?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-evaluate-a-neighborhood-before-you-buy">How to Evaluate a Neighborhood Before You Buy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/23-hidden-costs-of-buying-an-old-house">23 Hidden Costs of Buying an Old House</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-choose-a-real-estate-agent">How to Choose a Real Estate Agent</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing becoming a homeowner buying a house paying cash Mon, 30 Jan 2012 10:48:22 +0000 Xin Lu 879768 at http://www.wisebread.com How to Choose a Real Estate Agent http://www.wisebread.com/how-to-choose-a-real-estate-agent <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-choose-a-real-estate-agent" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bigstock_Realtor_Giving_Key_To_Couple_3256228-2.jpg" alt="Realtor giving key to couple" title="Realtor giving key to couple" class="imagecache imagecache-250w" width="250" height="138" /></a> </div> </div> </div> <p>Buying or selling a home is one of the biggest financial transactions you will ever make, and it&rsquo;s important to have a real estate agent who can give you a true idea of your options, explain the details of the transaction to you, and help to navigate any potential problems. But how do you choose a real estate agent? How do you avoid the untrustworthy agents and find someone who is professional and has your best interest at heart? (See also:&nbsp;<span style="text-decoration: underline;"> </span><a href="http://www.wisebread.com/when-should-you-fire-your-real-estate-agent">When Should You&nbsp;Fire Your Real Estate Agent?</a>)</p> <h3>1. Have High Expectations</h3> <p>If your expectations for a real estate agent are simply someone to chauffeur you to houses and unlock the doors, or someone who will just list your house for you, your expectations are too low, and they will be self-fulfilling. Think of a realtor as a professional, not a salesperson, and hold them to the same expectations that you would hold any other professional, such as a CPA, an attorney, or a doctor.&nbsp; This is the person who will be advising you on how to spend a huge chunk of money. The agent should be able to educate you on your options and help you to understand the consequences of whatever choices you decide to make.</p> <h3>2. Look for Certain Qualities</h3> <p>In the current market, there are few easy deals to be had in real estate. Many transactions, especially complicated ones such as short sales, require someone with the skills and expertise to navigate all of the potential problems. Whether your real estate agent has the right skills may affect whether or not you are able to buy or sell a home at all. <a href="http://markusandheidi.com/">Markus Brown</a>, a real estate agent in Orange County, says these are the top qualities you should look for in a real estate agent:</p> <ul> <li>Organization skills and detailed knowledge of the stacks of paperwork and legal issues that are involved<br /> &nbsp;</li> <li>Negotiation skills &mdash; someone who can deal efficiently with problems as they come up, who has good people skills when dealing with opposing agents<br /> &nbsp;</li> <li>For sellers, a marketing strategy and experience marketing homes<br /> &nbsp;</li> <li>Excellent communication skills &mdash; someone who can explain things to you in terms that you understand, empowering you to make the right decisions</li> </ul> <h3>3. Interview Your&nbsp;Potential Agent</h3> <p>Brown says, &ldquo;Sellers usually interview agents, since they are paying them, but buyers often don&rsquo;t think of interviewing agents, to their detriment.&rdquo; Whether you are buying or selling, take the time to interview at least three real estate agents. You can meet real estate agents through referrals from family and friends, or you can find them at open houses. It&rsquo;s a good idea to visit an open house and talk with a real estate agent face-to-face before requesting an interview. If an agent isn&rsquo;t interested in being interviewed, find someone else.</p> <p>Be careful about working with family or friends who are real estate agents. Buying or <a href="http://www.wisebread.com/big-mistakes-you-can-make-when-selling-your-home">selling a house</a> is possibly the biggest financial transaction of your life, and you deserve to work with the best person for the job. Family obligations should have no place in this business transaction, and if a deal goes sour, it may cause awkwardness and heartache in the end.</p> <p>When interviewing a real estate agent, Brown suggests the following questions:</p> <p><strong>How long have you been in the business?</strong></p> <p>This is the agent&rsquo;s opportunity to explain how they gained the skills for the job. How an agent answers this question can provide insight into the way they think and work. Agents who use this question to brag about how amazing they are instead of how they helped buyers and sellers accomplish their goals might be the sort of people who talk more than they listen &mdash; a bad sign. Remember, just because someone has been in the business forever doesn&rsquo;t mean they&rsquo;re the right person for the job; sometimes someone with less experience can be just as knowledgeable and may have other skills that will be valuable.</p> <p><strong>Can you describe the process, from start to finish, of buying or selling a house?&nbsp; </strong></p> <p>How well does the agent <a href="http://www.wisebread.com/25-ways-to-communicate-better-today">explain things</a> to you? Do you have a clear picture of the process, and do you feel empowered rather than belittled? Never work with an agent who talks down to you.</p> <p><strong>Can you describe how you treat the offer process? How do you submit my offer to the seller? (Or, if you are the seller </strong><strong>&mdash;</strong><strong> how do you assess potential offers?</strong></p> <p>Does the agent present offers in person? Do they try to meet with the listing agent to establish a good rapport? How will the agent discuss potential offers with you, and what strategies do they have for responding to offers?</p> <h3>4. Look for Red Flags</h3> <p>At the end of the day, you have to decide whether you feel comfortable working with a particular real estate agent. If something about them feels untrustworthy, go with your gut and look for someone else (there are plenty of agents out there). Be especially wary of working with the following:</p> <ul> <li>Agents who talk more than they listen, or talk about themselves more than they listen to you.<br /> &nbsp;</li> <li>Agents who are part-time &mdash; either they can&rsquo;t cut it in the real estate world and have to hold on to a day job, or they won&rsquo;t have the detailed knowledge and expertise of someone who makes it their primary business.<br /> &nbsp;</li> <li>Agents who are desperate for your business. If they are trying too hard to gain you as a client, chances are they will not give you objective advice. An agent who wants to close the deal too much may pressure you into something you aren&rsquo;t happy with.</li> </ul> <p><em>Have you had a good experience with a real estate agent? What qualities made that agent successful?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/camilla-cheung">Camilla Cheung</a> of <a href="http://www.wisebread.com/how-to-choose-a-real-estate-agent">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-5-rules-of-home-buying-you-need-to-know">The Only 5 Rules of Home Buying You Need to Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With Cash</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/real-estate-agents-do-we-really-need-them">Real Estate Agents: Do We Really Need Them?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-cant-trust-a-real-estate-agent">Why you can&#039;t trust a real estate agent.</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a house hiring professionals real estate agents Thu, 26 Jan 2012 11:24:13 +0000 Camilla Cheung 876945 at http://www.wisebread.com 7 Surprising Facts About Roth IRAs http://www.wisebread.com/7-surprising-facts-about-roth-iras <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-surprising-facts-about-roth-iras" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/grandparents_roth_IRA.jpg" alt="Grandparents" title="Grandparents" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Roth IRAs are a great way to build a nest egg for your retirement. If you&rsquo;re already contributing to your company&rsquo;s 401(k), adding a Roth IRA can give you added tax flexibility when you start withdrawing. Since you&rsquo;ve already paid the taxes on the money you contribute, you can take money out tax-free, and that will help minimize taxes from your 401(k). (See also: <a href="http://www.wisebread.com/optimize-your-ira-and-401k">Optimize Your IRA and 401(k)</a>)</p> <p>That&rsquo;s just one of the many benefits &mdash; here are seven surprising things you may not know about the Roth IRA.</p> <h3>You Can Take Your Money and Run</h3> <p>Retirement accounts have all kinds of rules and regulations, right? Well, the Roth IRA lets you take your money out whenever you want &mdash; with no penalties. Any investment gains are subject to different rules, but the money you put in is yours whenever you want it. So if you&rsquo;re worried that you might need the money, worry not &mdash; unless your investment goes down, of course.</p> <h3>A Roth IRA Can Fund Your First Home</h3> <p>If you want to take out some of those investment earnings, you can do so one time. You&rsquo;re allowed to take up to $10,000 of your earnings to put towards buying a home IF you&rsquo;re a first-time homebuyer.</p> <h3>Dividends Aren&rsquo;t Taxed</h3> <p>Any dividends you&rsquo;re paid on a stock or security you own in a Roth IRA account aren't taxed. This is a HUGE deal if you own a dividend-paying stock for many years. It can add up to thousands and thousands of dollars that you won&rsquo;t ever have to pay taxes on. Can&rsquo;t beat that.</p> <h3>It's Not for Everyone</h3> <p>Not everyone can contribute to a Roth IRA. These rules change annually, but for 2012 if you&rsquo;re single and make more than $125,000 or married (filing jointly) and make more than $183,000, then you can&rsquo;t contribute.</p> <h3>You Can Contribute After January 31</h3> <p>You have until tax day (April 15) to contribute towards to the previous year&rsquo;s limit. For example, you have until <a href="http://www.wisebread.com/15-surprising-facts-about-income-tax">April 15</a> to contribute towards your 2011 limit of $5,000 (or $6,000 if you&rsquo;re over 50).</p> <h3>Death Isn&rsquo;t the End</h3> <p>If you or your spouse dies, he/she can combine the two Roth IRAs into one without any penalty.</p> <h3>You&nbsp;Can Pass It On</h3> <p>The money in a Roth IRA can be passed on to an heir without any kind of <a href="http://www.wisebread.com/tax-penalties-for-early-retirement-withdrawals">penalty</a>. It&rsquo;s a really good way to pass money down to someone else.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carlos-portocarrero">Carlos Portocarrero</a> of <a href="http://www.wisebread.com/7-surprising-facts-about-roth-iras">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-14"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/opening-a-roth-ira-for-your-kid">Opening a Roth IRA for Your Kid</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-set-up-an-ira-to-build-wealth">How to Set Up an IRA to Build Wealth</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/step-by-step-guide-to-rolling-over-your-old-401k">Step-By-Step Guide to Rolling Over Your Old 401(k)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-one-thing-will-get-you-to-1-million-tax-free">This One Thing Will Get You to $1 Million (Tax-Free!)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement buying a house Roth IRA tax free Tue, 17 Jan 2012 11:00:29 +0000 Carlos Portocarrero 867709 at http://www.wisebread.com