Tips for Preparing to Purchase a Second Home

Buying a second home can be a great way to invest in your family and get tax benefits simultaneously. However, it's not always easy to find out what will make you the best option for maximizing returns on your investment.

Here are some tips that may help you prepare for purchasing a second home.

Budget

First things first – make sure that you have a budget in place. A good rule of thumb is spending 25% more than you would for a primary home. 

And while that may seem like a lot of money, there are many tax benefits and other perks of buying a second home that can offset the higher cost of ownership.

Finances

Your current financial situation needs to be taken into account when it comes to buying a second home. For example, if you are in between jobs, and cannot afford all of the payments on your current mortgage, see if you can get a loan modification from your lender or homeowners association (HOA). 

According to the HSH.com Mortgage Provider Directory, a loan modification is an agreement between the borrower and lender that modifies the terms of a loan, such as interest rate, length of terms, and payment amounts. 

If you are already getting help from your lender to manage your current mortgage payment, ask them if they will also assist you with a loan modification on your second home.

Mortgage Company

A mortgage company is there to help you find a loan when you are purchasing a second home. There are many things to consider when getting a loan. 

You need to decide how long you want your mortgage term, whether you will put your home or second home in someone else's name or if it will be in your name, and how much money you want the loan for.

Home Inspection

When you're purchasing a home, get a professional home inspection. A house can have many hidden issues that are not immediately obvious. 

For example, there could be problems with the roof, foundation, or appliances that will leave you paying for work on your house or second home for years. Get things like inspections and repairs to be done when you get your mortgage to cover these costs.

Mortgage Rates

These days, mortgage rates are meager, but there is always a risk associated with them. Also, you may not be able to get the best loan or the lowest rate if you have bad credit or poor credit history. 

In addition, the interest rate of your second home may be higher than what you can afford while still paying off your first home. Some states require homeowners to pay only a portion of their monthly mortgage payments toward the principal balance. 

This lowers your interest payment and helps increase the money you can borrow on your second home.

Buying a second home is a significant investment; you must be prepared to ensure that you get everything right the first time. With such a large purchase, it's essential to know where you stand financially and your financial priorities.

How Water Can Wreak Havoc on Older Homes

Water is one of the most destructive forces that can affect an older home. Just a small amount of water can cause extensive damage and even lead to the collapse of the structure. If you have an old home that you're fond of, here are some water trouble spots to watch out for.

Roofing

There are several ways that water can enter a home and cause damage. One is through leaks in the roof or walls. If these are not fixed promptly, the water can saturate the insulation and cause mold to grow. It can also cause the wood to rot, which weakens the structure of the home.

Gutters and Downspouts

Another way water can enter a home is through gutters and downspouts. If these are not properly maintained, they can become clogged and cause water to back up and enter the home. This can lead to leaks in the roof or walls, as well as foundation problems.

Pests and Dry Rot

Another problem that can be caused by water is pests. Termites, carpenter ants, and other pests are attracted to damp wood. If they're not stopped, they can cause extensive damage to the structure of the home. 

Dry rot is another problem that can be caused by water. This is a type of fungi that attacks wood, and it can cause the wood to become weak and crumble.

Foundation

The foundation of a home is its most important component. Without a strong foundation, the rest of the house can collapse. Unfortunately, water can wreak havoc on foundations, causing them to crack and settle. If you have an older home, it's important to have the foundation inspected regularly to make sure it's in good condition.

Mold

Mold is a type of fungi that can grow in damp conditions. If mold is allowed to grow unchecked, it can cause serious health problems, as well as damage to the structure of the home. In serious cases, or with certain types of mold, it can render a home uninhabitable.

Foundation

The foundation of a home is its most important component. Without a strong foundation, the rest of the house can collapse. Unfortunately, water can wreak havoc on foundations, causing them to crack and settle. If you have an older home, it's important to have the foundation inspected regularly to make sure it's in good condition.

Act Quickly

If you have an older home, it's important to be aware of the potential problems that water can cause and act fast when you suspect there is a problem. 

Your insurance coverage may be voided if you don't take prompt action to mitigate the damage. If you have any questions, contact your local water damage restoration specialist. They will be able to assess the situation and recommend the best course of action. 

Quick restoration can help make sure that your property remains intact while also preventing water damage to worsen as time passes.

These are just a few of the ways that water can damage an older home. If you're not careful, it can quickly turn your place of solitude into a nightmare. By implementing regular inspections and proactive measures, you'll be enjoying your old home for years to come.

The First Steps to Sell Your Home

Most people who put their home on the market are hoping to sell their home in a timely fashion, in order to move on to another property or benefit from the generate revenue. It’s important that when you make the decision you must fully become committed in order to best present your home to potential buyers. 

A realtor can help you along the journey to help you place your property on the market the right way, to get it sold fast. You need to visit www.remax-tennessee.com to find the best real estate agent in the area and to have a partner in the home-selling process.

Evaluate

If you’ve lived in your home for more than a few years, it’s likely that it will need some remodeling. One of the most valuable resources in selling a home is having your home inspected before you place it on the market. This will provide you with insight to the changes that need to be made to improve the actual value of the home, while getting you ready for the bank home inspection that comes after you find the right buyer.

Remodel

Take what you have learned from the home inspection and apply it to your property. You can save money by doing simple projects on your own, if you are handy with tools. But larger renovations will require professional assistance. Keep in mind that for electrical and plumbing jobs, you’ll need a certification from the town office for approval. 

After you have made the suggested changes from the inspection, you need to begin making your home look its best. Fresh paint on both the interior and exterior of the property, decluttering, downsizing items in the room and updating the hardware and light fixtures can really make a difference in your home’s appearance.

5 Mortgage Problems You Want To Avoid So You Don't Lose Money

They say we learn from our mistakes, so that means it's a good idea to make them in the first place. What they really mean is that it's good to make a spelling mistake so the teacher can correct you. They're not telling you to make a terrible mistake when you're half way through the biggest purchase of your life. You'll still learn from the mistake, but it could cripple you. Let's look at a few things you don't want to mess up when it comes to your mortgage.

Don't go crazy with credit

Before you apply for a mortgage you don't want to have too much credit in your name. That means any big purchases you're thinking of making should be put on hold until your future mortgage is wrapped up. Even if you have the best credit rating in the world it's going to scare companies away when you owe lots of money to different people. What would happen if your circumstances changed and your finances were hit? Everyone who has lent you money would have to compete with each other to get theirs back.

Don't hide from your lender

A lot of people hate hearing bad news so they don't open their mail when it comes in. If they can't afford to pay their mortgage it gets worse because they stop answering their phone. Lenders find it impossible to reach people, but I'm sure you realize this will never make the problem go away. It could actually make it worse since lenders have a few options at their disposal and they could maybe save your home, but unfortunately this is never going to happen when they can't even contact you.

Don't skip the inspection

It's easy to fall in love with a beautiful home as soon as you walk through the front door. Sometimes they just 'feel' right and you know you want to buy it. Unless you can see into the future you don't know what is going to go wrong. The only way you can find any unknown problems is by getting a home inspection and you need one carried out before your offer becomes official. Your perfect home might look beautiful to the naked eye, but you don't know what is going on behind the scenes.

Don't lie on your application

At the moment you might not have the greatest income in the world and you could even owe some money to credit card companies, but you still have to tell the truth when you're filling in your mortgage application. It's even harder when you know you're due a big pay rise within the next year because you'll have to settle for a much smaller loan at the present moment. If your lender finds out you've lied to them you could end up in a lot of trouble and it could also be a federal offense.

Don't pick the wrong mortgage

I know it's easy to change your mortgage these days and everyone swaps around like crazy, but don't pick the wrong mortgage in the first place and you'll save yourself so much hassle. You might still need to change it further down the line, but at least you'll save yourself a few years of wasted money. People only choose the wrong mortgage in the first place because they choose the wrong people to help them, but you can take care of that by making sure you speak to a skilled financial adviser.

You only get one shot

Once you mess up you'll lose money and there is no getting away from it. You can always take out another mortgage, but your money will never magically appear again. Take your time if you're buying a home for the very first time because you don't want to regret something even if it only affects you negatively for a few years.

Author Byline:
The author of this article, Ian Andrews, is a freelance blogger, currently writing for First World Mortgage, well-known mortgage lenders in Connecticut. Ian loves cooking and on weekends he provides lessons to the underprivileged youth.

How to Get the Most Money When Selling Your Home

It's still a buyer's market out there. If you're putting your house on the market, you'll be up against some serious competition. To get your property sold at the price you want, you'll have to go the extra mile to help it stand out from the crowd.

Fortunately, doing so need not cut too deeply into your profits. When prepping your home for sale, the smallest touches often bring the biggest return. 

Improve Your Home's Stage Presence

It's doubtful that you would arrive for a Fortune 500 job interview dressed in a T-shirt and jeans. It's the same when selling your house. Over 1,000 experienced real estate agents agree that taking the time to clean and de-clutter a house can pay big dividends, resulting in a gain of between $1,500 and $2,000 in its selling price.

Think Beige

Although the thought of ripping the grape-patterned paper from the walls of your Tuscan kitchen might bring a tear to your eye, one thing is certain. When it comes to your decorating flights of fancy, potential buyers may not be feeling the love.

The solution is simple: Go neutral. Regardless of your love for color, you might be surprised to see how the use of soft whites, tans and other neutrals can open up your space. These shades will also blend as well with your own furnishings as they will with those of your prospects, relieving them of having to paint over your more creative hues after they've moved in. 

Depersonalize

An interested party is far more likely to sign on the dotted line if he can envision himself actually living in your house. Those beloved pictures of your kids on the piano and grandma hanging on the fireplace wall may spell "home" to you, but they will make it very hard for a stranger to see himself living in your space. It's best to pack those family treasures safely in cotton batting, promising them star billing once you've arrived at your new digs.

Dress It up a Bit

Some of the most valuable decorative touches will cost the least to accomplish. Fresh flowers in the living room will make an immediate impact. A roaring fire on a cold winter's day will do the same, particularly if you accompany the visual effect with the scent of apple cinnamon potpourri boiling on the stove.

Make Some Reasonable Renovations

In a weak economy, the often-prohibitive expense of updating a kitchen or installing a new attic bedroom can cut too deeply into any hoped-for ROI. Fortunately, other fix-me-ups can make an impression in a way that's considerably more cost-effective. These include:

• A new front door. 
• Vinyl or fiber-cement siding.
• Double- or triple-pane windows.
• A modern water heater.
• Upgraded HVAC.
• New or steam-cleaned carpets.
• A back-yard patio or deck.

Smile for the Camera

According to Julie Reynolds of Realtor.com, web appeal could soon trump curb appeal when it comes to attracting buyers. Many modern house hunters spend days scouring the web before ever setting foot inside a Realtor's office. She also recommends using an agent that has gone through a qualified real estate school.

If your home is to compete well on the online front, it must be ready for its close-up, and still pictures alone may not be enough. Statistics show that potential buyers are 150 percent more likely to click on a Realtor's listing if it features a video walk-through. Such extras work wonders in encouraging buyers to leave the comfort of their own homes to have a closer look at yours.

Have Your Own Inspection

Do-it-yourself projects, so popular in stringent economic times; often suffer from shoddy workmanship that leads to dangerous conditions. The hazards may not announce themselves at first glance, but if they show up during a buyer's inspection, they can seriously stymie any sale.

The savvy seller will beat buyers to the punch with a pre-inspection. The fact that a home has already had and passed one with flying colors will be of enormous comfort to any house hunter and could mean the difference between a walk-away and an actual sale.

In good times and bad, carrying out these cost-effective home improvements can enable you to reap the greatest profits on the day you turn over the keys.

6 Tips for First Time Home Buyers

You've finally decided to make one of life’s biggest decisions – buying your first home. No longer will you have to deal with stuffy landlords, exorbitant rent prices, or annoying neighbors—you will finally have a space you can call all your own. Now that you've made this very adult decision, you need to consider a few things before you make one of the biggest purchases you will make in your entire life. Before you buy, you need to ask yourself some serious questions. If you already own property and are looking into purchasing income property, you will also need to do your homework.

Tips for Homeowners 

1. Know Your Budget and Mortgage Basics 

It’s important to know what you can afford to spend before you seriously start looking to buy. It is also equally important to know how much mortgage you qualify for. Look for first time homeowners seminars in your area to get more information or speak to a representative at your bank.

2. Get a Real Estate Agent you Trust

Looking for your dream home on your own can get overwhelming. This is where real estate agents come in. They can help you figure out the logistics of a sale, will negotiate prices for you, and will do all the paper work. It’s important you have a good rapport with your agent and that they know what your needs and wants are. Remember, you are the one who will be living in this home, not them.

3. Make a Smart Offer

Your real estate agent can help you navigate this important step of the purchasing process. This is your time to name a price as well as your conditions for purchasing. More than likely the seller will counter-offer, putting the ball back in your court. Once you come to an agreement, you will go into escrow which means you have 30 days in order to inspect and purchase the property.

4. Get a Home Inspection

During the escrow period, it is your responsibility to get a home inspection. During this inspection a trained professional will check every inch of the property to make sure it’s safe and sound and ready for purchase. If they find any issues (mold or other deficiencies the seller did not mention), you can still retract your offer.

5. Read Before You Sign

Like all things in life, it is always crucial to read the fine print before you sign any agreement. It is also important to get everything in writing and avoid verbal agreements. Your banker and real estate agent can help walk you through any language or steps you are unsure of.

6. Cover all Angles on Your Income Property

Income property is property that is bought with the intention of renting or leasing. It is a higher risk than owner occupied properties, but can be beneficial in helping you off-set the costs on your own home and bring in extra income. Before purchasing a residential or commercial income property you need to do your research. Know your rights as a landlord and see if the time and money put into the property will put you out ahead in the long run.



Angie Picardo is a staff writer for NerdWallet, a personal finance website dedicated to helping homeowners find the best credit cards.