The best way to Keep from Becoming House Poor

Becoming house poor has little to do with the valuation of your property. You may live in a beautiful house worth $6 million, and you would still be considered house poor if your house takes up a disproportionate ammount of your salary. Typically, you’re deemed house poor if you devote too much on your home payments and home upkeep. But what’s too much?

While there are several rules of thumb by which lenders assess the reasonableness of your real estate costs, the valuation of your property and the ammount of your mortgage payment are only half of the picture.

You’re viewed as house poor if your property costs stop you from:

• Saving the equivalent of 3 to 6 months income in an unexpected emergency money reserve account
• Planning for your retirement
• Accumulating a diversified investment portfolio
• Budgeting for additional life events, such as paying for your child’s schooling
• Buying the furniture you will need for your new home, or eating anywhere other than in your new kitchen

If you’re thinking of buying a Fort Worth home, do some early planning to prevent becoming house poor. Talk with a financial professional who can help you clarify your goals and come up with a method for meeting them. Examine your budget with an eye toward trimming discretionary expenditures and saving more toward your objectives.

As you go through the mortgage preapproval procedure, see how much you meet the criteria for on the basis of just your normal yearly income, without thinking about overtime, bonuses, part-time employment, or alimony or child support you collect. That way, although you may not qualify for as significant a mortgage as you would otherwise, you’ll be in a much better position to afford the home you buy, and you’ll avoid the added stress of constantly balancing your financial obligations.

Be very cautious about using creative financing measures, such as interest-only mortgages or optional ARMs, to buy more property than you can otherwise pay for. If home valuation increases decline and interest rates rise, you may find yourself stuck between the rock of making the mortgage payment each and every month and the hard place of not being able to sell the property for enough to cover paying back the loan that secures it. You don’t want to lose your home to property foreclosure because you bit off more now than you can chew.

Finally, resist the urge to purchase a home Fort Worth Real Estate with an eye toward making a killing in a couple of years on its anticipated appreciated worth. Think of your home as a necessity — a place to live — rather than a speculative investment.

When you go shopping for a house there are many important decisions to make. Not only do you have to find that perfect house that
you want to live in forEVER, but you have big decisions to make at your financial institution as well. Before you go to your bank or
lender, arm yourself with a little knowledge about the different types of mortgages that you will be offered, so you can make a well considered, informed decision when the time comes.

There are generally two types of mortgages - a fixed rate mortgage and an adjustable rate mortgage, or ARM mortgage. A fixed rate mortgage offers one interest rate for the entire life of the loan, while an adjustable rate mortgage offers changing interest rates at
intervals of time.

By arming yourself with knowledge before you head to the lenders, you can ensure that you are going to get the product you need at the price you can afford. There are advantages and disadvantages of adjustable rate mortgages that need to be weighed before deciding for or against an ARM mortgage.

Adjustable rate mortgages usually come with a significantly lower interest rate than is offered on a fixed rate mortgage. For this reason ARM mortgages are very tempting to home buyers. On the other hand, a fixed rate mortgage offers the security and consistency of
payments and interest rate throughout the term of the loan.

And don’t be fooled by those low introductory rates some lenders use to lure you in. This is one of the risks of going with an ARM mortgage, because you can usually count on higher interest rates in years to come.

Is the risk worth it? This is the primary question you need to ask yourself before heading to the lender to secure a home mortgage loan. Do you go with what you know — or risk the unknown??

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For more helpful information on home mortgages, please visit: www.BestRealEstateMoves.com . Looking for quality content to sell for profit or publish up on your website? Help yourself to gobs of PLR articles, ebooks, reports, multimedia, graphics and more — all bundled into easy-to-use, re-marketable modules — at ‘The PLR Content Source’: www.WOWContentClub.com

How to Choose a Home Inspector when you’re buying a Home

By Tim Spargo, Certified Residential and Commercial Real Estate Inspector

I will attempt to break down this question as we are seeing some really strange trends in our current economy and housing Market.

As I’ve been a Home Inspector for many years I’m often asked the same question over and over again. Clients, friends and many other “folks” want to know what separates one Home Inspector from the next.  I will begin with a variation of a checklist that can be found at my website linked in this article.

When choosing someone to inspect your Real Estate Purchase it’s important to remember a few things:

I recommend Making a “Checklist” and calling a few Home Inspectors in your area - try not to book the first one you call! You’ll notice in a series of recommendations I have YOU ASK… I didn’t mention PRICE until the end.

By the way, if our “candidate” is in the middle of an inspection and needs to call back, that’s fine!  Don’t get into a hurry!

• Experience - Ask the Home Inspector “What type of experience do you have. How long have you been in business? What type of Industry related experience do you have besides being an inspector?” 
  •  
    • We’re trying to get an idea as to how long our “candidate” has been around and what his or her background may be. I’m sorry to say but we don’t want newbies inspecting our expensive purchases. I also don’t want someone who… no offense here, was working at a Retail Store this or last year and is now responsible for helping me decide on the most expensive purchase that most of us will ever make.
• Are you a member of a Professional Organization and are you “Certified”?    The answer here should be YES.
  •  This topic has some debate as to which certifying body is “better”, I could care less. It’s like saying your Real Estate Agent is better because they are from one large firm and not the other. The idea here is that an inspector has made a committment to be a professional. If they are not a member of Nachi, ASHI or NAHI to name a few… I’d want to know why!
•  Do you carry Insurance? The only answer here is YES.
  • If you are a buyer or a Real Estate agent, recognize the fact that most professional and full time inspectors carry insurance. If you as an Agent are “shopping” for your client, be careful if your inspector doesn’t have insurance, you may be liable as the “referring party”.
• Are you INDEPENDENT?
  • Sorry if this sounds bad, but most Good inspectors I know are independent inspectors… Distant from any binding agreements with “outside” parties limiting their scope and ability to “talk freely” about their thoughts and findings.
• Are you LICENSED?
  • Many states (no Licenses are required in California by the way) have License Requirements for Home Inspectors that require State Licenses. Inquire with your State’s Website before you call an inspector. As a Home Inspector in Lancaster CA we have very few requirements here, but this will vary from state to state and area to area.
• Who will perform my Inspection?
  • Here is another one that I get some “flack” for. In a perfect world, the person answering the phone will be the person inspecting your Real Estate purchase. A couple of reasons for this include: A Real Estate Inspection can be a liability if performed poorly and should be done so by the person who would be responsible! Let’s think about this for a minute… If I have someone that works for me… would they be more likely to mention an “obscure or minor” item knowing that “it’s no big deal and shoot, I’m not responsible anyway” or as ME the owner.. knowing that liability AND reputation are on the line? Easy one I think!
• What type of Inspection Report will I receive?
  • While the best report will come from the best inspector, I’ve decided that the Checklist paper type are too antiquated and are nearly obsolete. They are easier for me, the Home Inspector to use, but are easily less informative than the computerized reports that I now use. It’s the 21st century, request a computerized report with pictures for goodness sake! The inspector generally has the ability to store relevant information and common situations that are relevant to your local area and the paper type are generally not. I could be wrong on a small scale, but not by much!
• Can I attend the Inspection?
  • The answer here is a very important one….your inspector should actually “encourage” you to be there. If they didn’t I consider it a red flag, unless you indicated prior to asking this question that you couldn’t be there! The reason I say it’s a red flag is because of this, a shy or reserved type of person may be a great inspector, but is likely to find it difficult to be comfortable explaining items and “being under the gun”. Does that make sense? It should! So this is actually a good time to tell if your inspector is a “Chatty Kathy” or “Mr. No personality”. There is a really bad inspector in my area that people really like and he does well, simply because he is so friendly and well spoken. His or her clients should be reading these questions before calling him though
• How long will it take to get my Inspection Report?
  • The answer should be either : Soon or Very soon! Meaning this, inspectors that takes several days, especially during the workweek to deliver reports creates a lot of problems. This is because: Most inspectors I know have very good memories, but good enough to have 4-6 reports backed up and waiting to be written? No, of course not. Myself, I have most of my report done when I’m leaving the inspection, thanks to the advent of a portable tablet style laptop ( a necessity in my book) I could probably go “out to the truck” and send it out. I don’t though. I insert my photos and proof read my work and send it out later that day or by the next morning or so. We all have ways that work for us, I just don’t see how many inspectors can write accurate reports several days after leaving the job site.
• Can I call you if I have any questions after the inspection or after I receive my report?
  • Most inspectors are going to say YES! Try to remember in this “interview” with your potential home inspector whether you got a feel that this person is a sociable one or just in a hurry to get off the phone.
  • As mentioned, if he or she is in the field and offers to call back, don’t hold it against them. See if they do and think of it as an opportunity to see if they do as they say! After all it’s easier to answer a phone that to make time to call people back.

The last question should be “How Much”. Not to say that this isn’t important to you, it just should carry a smaller “weight” if you will. I think that people put way too much emphasis on the cost of a Home Inspection rather than looking at some facets that I have made available for you here!

I am currently entering over a decade of Home Inspections in Antelope Valley , I will have many more stories to share and will hopefully get to spread some “wisdom” to my readers and save them aggrevation and money!

I will be writing another article on a topic ” I’m buying a Home As-Is, should I get it Inspected?” Yes you should, I’ll write more about it soon.

I hope that you find this tips helpful and if I can be of further service visit my website Home Inspection in Palmdale CA.

Thanks again for reading and good luck!

Tim Spargo

RISMEDIA, August 18, 2009-Since Congress passed the American Recovery and Reinvestment Act earlier this year, many have seized the opportunity offered by the $8,000 tax credit for first-time home buyers. When you factor in today’s historically low interest rates and housing affordability with the financial incentive from the government, it’s easy to see why so many first time buyers have taken advantage of this chance to realize their dream of homeownership.

However, the ability to utilize this $8,000 tax credit will not be available to would-be homeowners much longer. To receive the tax credit, a first-time buyer must purchase and close on a principal residence before Dec. 1, 2009. Since closing on a home generally takes anywhere from 45-60 days, that leaves prospective buyers a little more than a month to take advantage of the this financial opportunity.

“It’s hard to imagine a better time than right now to be a first-time buyer,” said Jim Weichert, president and founder of Weichert, Realtors, one of the nation’s largest independently owned real estate companies. “Mortgage rates and home prices are all favorable, recent economic news is encouraging and the government is providing a large financial incentive. If I was a first-time buyer, I wouldn’t let an opportunity like this slip through my fingers.”

In addition to taking advantage of the tax credit, another reason for first-time buyers to consider making a purchase now are the recent signs of a stabilizing real estate market. Last week, the National Association of Realtors announced that home sales increased in 39 states in the second quarter of the year compared to the first. Last month, the S&P/Case-Shiller index showed an increase in the monthly value of homes for the first time in nearly three years.

Buying a home now might not only be the opportunistic thing to do but also the more practical decision. In many instances, renting can actually be more expensive than buying. By choosing a fixed-rate mortgage, individuals can lock in to a lower payment that will stay the same unlike rent which can increase yearly.

First-time buyers, as well those who haven’t owned a home in more than three years, who purchase a home by Dec. 1, may be eligible to claim all or part of the tax credit based on their income level. Congress will even allow individuals to still claim the credit as part of their 2008 tax return if they file an amended tax return. Individuals can also elect to receive the credit on their 2009 tax return. As with any tax law, individuals should check with a tax advisor to discuss any specifics regarding the use of this provision.