Posts Tagged buying a home

Buying a Home – Home Ownership and Your Community

Owning your home means providing a secure and comfortable space for your family to flourish as well as investment in a financial tool that can help you build equity, move up through social classes, and prepare for retirement. Buying a home, however, is more than just a long term investment in your family’s security; it is also an investment in your community.

When you own your home, you become more than just a resident in a neighborhood, but a contributor to the well being of your community. By owning a home, your property taxes go directly towards funding the schools, libraries, and other services provided by the county to your community. The care that you put toward maintaining your home’s exterior helps the community prevent blight. Your vigilance while participating in a local Neighborhood Watch program can keep your community free of crime. All of these contributions to your community not only help maintain a safe and desirable living atmosphere, but over time helps increase the overall property value of homes in your community.

An increase in property values helps you and other members of your community thrive financially. When property values increase, residents in the community begin to build more equity in their homes. This growth of equity provides community members with money to invest in businesses in the community, which in turn continues to increase property values. Most important, as you continue to build equity in your home, you begin to build a nest egg that you can use to send your children to college or retire with. As with any investment, owning your home requires diligent financial planning, and the help and advice of a professional who cares for both your interests and the interest of your community.

As a first step to buying your home, you should reach out to the local Realtors and lenders in your area. These organizations are usually vested in the community where they operate and have a high focus on helping you with financial planning and education. Ask your Realtor and lender to show you how to work with a mortgage calculator and explain the finances of owning your home including PITI payments (Principal, Interest, Taxes, and Insurance) and federal tax benefits. Realtors or lenders who do not provide this level of financial education can put you in peril of buying a home that you may not be able to fully afford resulting in a foreclosure. Unfortunately, nothing hurts a community more than a high rate of foreclosures because of the reduction of property values and the general sense of despair that foreclosures bring.

As you prepare to purchase your home, make sure to keep in mind that it is more than just your own security and well being that you are investing in, but the security and well being of an entire community. As a stakeholder in your community, you should work with local real estate professionals that can help you make a responsible home purchase decision that will benefit your financial well being as well as the financial well being of your community.

Visit for more articles on how home ownership can be made affordable.

Rambod Jacoby is the founder of HomeBuyer Go, a free platform developed to help first time home buyers clearly understand and experiment with the different financial concepts in a home purchase.

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9 Biggest Real Estate Mistakes

This is a good article from Ilyce Glink, author of Buy, Close, Move In! about buying a home in today’s changed marketplace and avoiding the most common mistakes. In it Glink talks about getting pre-approved before going house shopping, getting your credit cleaned-up before getting pre-approved and buying short sales and HUD homes.

I haven’t read the book yet, but this article has some very sound advice and I recommend reading it thoroughly. With more HUD and HomePath homes popping-up in Salt Lake City and throughout Utah, it’s a good time to take advantage of buying a great home at a very affordable price.

With real estate rules, laws, and fees changing daily, it’s easy to make a mistake when shopping for a home or a loan. Here are some of the most common mistakes buyers are making in the new housing market — and some tips on how you can avoid following suit.

1. Not Understanding the New Rules

What’s changed in real estate? The details. While you still go out and shop for a home, make an offer, find financing and close on the property, the details of how this process works today are vastly different from the way we went about buying real estate five, 10, or 20 years ago.

If you attempt to wade in without familiarizing yourself with the new way of doing business, you’ll find yourself blocked at almost every turn. Finding good partners (see below) can help, but you have to be prepared to provide more information and evaluate more factors in order to close successfully on a new home.

2. Failing to Build a Top Real Estate Team

If you buy and sell property for a living, you know that it’s a team sport. Even if you’re a real estate agent, you’ll still need a good lender, inspector, title or escrow company, and attorney to assist you in completing this purchase successfully.

But some buyers think they can do it on their own. In today’s new real estate world, that’s a mistake. For example, even in states where real estate attorneys aren’t generally used to close house deals, using an attorney to help you negotiate a foreclosure or short-sale purchase can mean the difference between closing and sitting in limbo. Real estate agents who intimately know the foreclosure market or have colleagues who represent real estate owned properties for banks and other financial institutions can help you find the right property faster. Get on their short list as an investor with cash to spend and they’ll give you extra time and attention.

Taking the time to build a great real estate team will pay off in spades. Not putting this team together ahead of time is a mistake you don’t want to make.

3. Not Responding to Your Lender’s Requests

Lenders have tightened up credit requirements and are taking the time to verify every piece of information you submit. In fact, when you apply for a mortgage today, you should expect to provide reams of documentation both with your application and during the verification process.

It’s quite likely that some of your information will disappear during the process, and you’ll be asked to replace various documents or augment your documentation. When these requests come in, you should take them seriously and respond quickly. If you don’t, you could be putting your financing in jeopardy.

4. Not Cleaning Up Your Credit in Advance

One of the ways lenders are tightening credit requirements is by raising the minimum credit score necessary to be approved for a mortgage. Prior to the credit crisis, lenders might have charged one interest rate if you had a 680 credit score — today you might need a credit score of 720 to get the same rate. When it comes to government-backed loans, FHA originally didn’t have a minimum acceptable credit score limit, but it has now instituted tougher standards that require a credit score floor of at least 600 in order to get a loan.

That’s why is extremely important that you spend time cleaning up your credit history and score before you apply for a loan.

Read the rest of the article here.


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