Six Things New Homeowners Waste Money On

OK, we’ve said it time and again, but it bears repeating: Buying a home is a very big expense—and once you’ve kicked off all that spending, it’s easy to find yourself caught up in rampant lifestyle inflation. After all, you’ve got an enormous, shiny new house just waiting to be filled with all sorts of nice stuff, right?

Well, take some quick advice: Don’t keep spending.

Homeownership comes with its fair share of unique costs—property taxes and urgent repairs and energy bills, oh my. There’s no need to add to their cost by shelling out for unnecessary expenses. Here are six major cash outlays that buyers can avoid.

Too much house

This one requires some thought before you actually nail the deal: How much house do you really need? Just because you’re pre-approved for a hefty purchase price doesn’t mean you should go as big as you can.

“The house that you can afford with the money you’re lent can make the budget go out of whack,” says Andrew Gipner, a financial adviser at Longview Financial Advisors inHuntsville, AL.

Not sure where to trim? Consider having less closet space, buying fewer bedrooms, or—especially—eliminating a formal dining room.

“You don’t use the dining room nearly as often as you think,” says Noelle Hans-Daniels, a Sotheby’s Realtor® in Indianapolis. “It’s kind of a wasted space.”

Fixing up your outdoor space ASAP

Once you close on your home and move in, you might be itching to host your first late-season barbecue. Or maybe you’ve been dreaming about a koi pond, like, forever. But hold on: Updating your outdoor space shouldn’t be your first priority, especially if you’re tight on cash. Unlike couches and beds, which are essential to a functioning house, landscaping and decor can be put on pause.

That goes double if you’re building new: According to Hans-Daniels, building your backyard at the same time as your home can cost “a lot more than if you did it after the fact.”

So exercise some caution before committing: Try pricing out your plans with a landscape contractor, and consider rolling them out in phases.

Old, outdated insurance

Still using the same company that offered you renters insurance seven years ago? It might be time for a change. Shop around.

“You may stay with the same company, but you may find something that’s a little better price for the same thing,” Gipner says. “Sometimes, people may not want to shop around or may be married to a particular company.”

Just because the same company had a good deal on auto or renters insurance doesn’t mean it’s the best fit to protect your home. Go through all your options with a fine-toothed comb, looking for a deal that won’t crush you financially but also leaves your house and its belongings secure.

After all, now it’s not just your stuff—it’s your roof, yard, and foundation you have to protect, too.

Space-filling stuff

If you’re moving from an apartment, chances are good you’re astounded by how much space you have. There’s another bedroom and a dining room and … yet anotherbedroom!

Don’t feel like you have to fill it all at once. Give yourself—and your home—time for personality to emerge.

“A lot of people will go out and say, ‘Oh my gosh, I’ve got to fill this space and buy stuff,’” Gipner says. “I’m not against possessions, but the way some people do it can be seriously detrimental to their finances.”

Instead of immediately stuffing the TV room with a generic, new couch and coffee table, wait it out. See what you really need and what you really like. In the meantime, stick the money you save into a renovation fund.

Extended warranties

Many homes don’t come with appliances installed, so first-time homeowners might find themselves making large purchases (like a dishwasher or refrigerator).

Here’s a tip: You don’t need the extended warranty.

“I’m against them,” Gipner says. “What are the chances everything you own is going to break or not work anymore?”

Yes, something might break within the relatively slim service window—but the money you’ll spend fixing one thing will be far less than the extended warranties on all the things. Your average warranty costs about $123 for major appliances, according to Consumer Reports, and a single repair costs not much more (and might not even be covered). Just risk it—you’ll come out ahead in the long run.

Yard maintenance

Having your own yard is definitely exciting, and while it’s important to keep it healthy and watered, you don’t need to go overboard. Resist the pressure to hire additional help for your yard—even if you’ve lucked into an HOA that covers it.

“You can still be part of an HOA and cut your own grass,” Gipner says. “You don’t have to pay someone an exorbitant amount of money to come out and cut your grass.”

Don’t be tempted by the sales pitches you’ll inevitably receive after your purchase goes through. A gorgeous lawn is achievable—and it can be done all on your own. Really.

Shared from:  http://www.realtor.com/advice/buy/six-things-new-homeowners-waste-money-on/

Six Basic Mortgage Rules To Follow

Whether this is your first home or fourth, really understanding your mortgage and how it works is crucial. After all, it’ll probably be the biggest loan of your life!

What IS A Mortgage?

In the most basic sense a mortgage is a loan to buy a property. The process of securing a mortgage means lender approval based on your income, credit rating and other debt.

Understand Your Fixed Costs

Before you decide what you can—or should—spend on a mortgage it’s important to take stock of your habits and your true fixed costs. Be honest with yourself when putting together your household budget, if you’re going to be miserable without your daily premium cup of coffee, then along with your student debt and car payments, consider that a fixed cost.

Be PITH Safe

According to the CHMC (Canadian Housing & Mortgage Corporation), your monthly housing costs should be less than 32% of your gross monthly income. These are considered your PITH or Principle and Interest (of your mortgage payments), Property Tax, and Heating bills.

Get A Mortgage You Can Afford

If you pass the PITH test, the second test of what you can afford mortgage-wise is that your entire monthly debt load (car payments, credit card debt, student loans, etc) should be less than 40% of your gross monthly income. The CMHC even has a handy Mortgage Affordability Calculator on their site: cmhc.ca.

Paying Off Your Mortgage

Once you’re approved for a mortgage and buy your home (congratulations!), now you have to actually start paying off the loan. There are several factors involved in this like your interest rate, payment schedule (monthly, twice a month, every two weeks, or weekly) and your amortization period, which is the amount of time you’ve selected to pay back the mortgage (usually ranging from 15-25 years).

Picking The Right Interest RateThe interest rate at which you select to pay off your mortgage varies from “fixed”—whereby the rate will NOT change for the term of the mortgage, and is generally a bit higher but considered more stable, or “variable” whereby the interest rate can fluctuate with the current state of the market.

Finally, owning a home can truly be an amazing thing. Thankfully there are many resources out there to help make the process a smooth one like mortgage brokers and financial advisors, so remember, you’re never alone through this daunting process!

Shared from:  http://www.hgtv.ca/realestate/article/mortgage-rules/

Relocating to an Unfamiliar Area? Here’s How to Get Your Bearings...

Choosing a home in an unfamiliar neighborhood can be nerve-racking, but it’s almost inevitable when moving to a new city—or even across town. There’s a lot at stake: The wrong decision can cost you money and peace of mind.

Here are some tips to guide you in your search.

Mission: Neighborhood reconnaissance

As with any house hunt, you should first figure out your budget and what you would need, want, and like to have in a house and in a neighborhood. But if you’re relocating across the country, your biggest challenge will be doing long-distance recon on your new hometown.

While you can’t gain access to private social networks such as Nextdoor until you verify you have an address in a neighborhood, a little cybersleuthing will reveal insights on day-to-day life and concerns in areas you’re scouting.

Once you know the general area in which you’d like to live, websites such as City-Datacan collect and analyze data from numerous sources to create detailed profiles of U.S. cities, including information from crime rates to weather patterns. Homefacts includes similar information, then drills down further, listing neighborhood statistics such as median home price, homes for sale, and foreclosures.

AreaVibes can help you narrow down a search; after you type a ZIP code or city in which you’d like to live, you can adjust metrics such as amenities, crime, cost of living, and housing prices to compile a list of neighborhoods that match your “livability” needs.

In addition, many regional newspapers or magazines routinely publish online rankings of their best neighborhoods. Listly has lists of five-star New York real estate communitiesand blue chip Massachusetts real estate communities, so it may be worth a search to see whether there is a similar list for an area in which you’re interested.

Speaking of lists, Livability regularly develops city rankings for a range of topics, including small towns, college towns, and overall best places to live.

The Chamber of Commerce in many towns will also provide a guide for people who are relocating. Also, look for news on property taxes in recent years—falling property taxes likely mean that communities have had to cut back on public services.

If you have children, you’ll want to read up on local public schools on GreatSchools.org, as well as determine what day care and after-school activities are nearby. Even if you don’t have children, good schools are a major factor in determining home values in a neighborhood.

No neighborhood is perfectly tranquil, but check CrimeReports.com for crime reports and maps to get a sense of where an area falls on the spectrum. You should also visit theNational Sex Offender registry and FamilyWatchdog.us, which will identify registered sex offenders living in the area. NeighborhoodScout.com will consolidate crime, school, and real estate data in one report, as well as compile lists on safe cities and neighborhoods with good schools.

Draw on a professional’s expertise

If there is one time above all when you’d really benefit from working with a real estate agent with deep knowledge of an area, it’s when moving to a new town.

A knowledgable professional should be able to provide recommendations and compile background information on neighborhoods and homes that fit your needs and price range. Come prepared with a neighborhood or neighborhoods you like, and he or she can give you more information or suggest similar alternatives.

Get down with the locals

Once you’ve done the research and found a neighborhood you like, drive by several times during the day and at night. Look for the following:

• Are there many “for sale” signs on lawns?
• Are there any abandoned or boarded-up houses in the vicinity?
• Is there a lot of trash on the sidewalks?
• Is the neighborhood close to a shopping or business area?
• How well are neighborhood parks maintained?
• Is street parking restricted after school and during rush hour?

Also try to attend a few open houses in your neighborhood of choice. It’s a good way to get a feel for local property values, and to walk around the area. If you see residents out and about, try to talk to them to get their perspective on the community.

If you have time, try to get a drink in a local bar or a cafe and talk to people there. Apps like Meetup and AroundMe will help you connect with people in a town that have similar interests, as well as help you find the nearest hot spot.

These will be your potential neighbors, so they will provide valuable impressions on whether you’ll be pleased with where you eventually live.

Reposted from:  http://www.realtor.com/advice/how-to-get-your-bearings-when-relocating/

More of Today’s Buyers Use Technology to Find Their Dream Homes

The way potential buyers search for homes has changed over the past few years as we come to rely on our mobile devices for more of our Internet needs. While the Home Buyers and Seller reports from the National Association of REALTORS® has revealed a growing trend in the past two or three years of buyers using their smartphones and tablets to search listings, recent studies from Google seem to drive the point home. While NAR surveys buyers and asks if they’ve used their mobile devices in their searches, Google has been able to add a new layer to this research by analyzing key search terms.

Buyers Are Taking Their Home Searches Mobile
Many of us are attached to our smartphones and tablets, and potential buyers are no different. In June 2014, mobile phones made up 27% of total searches related to home buying. This figure is up 19% from last year. Not only do buyers use their mobile devices to search for listings online, they also use it to get directions to a home, search for more information about a listing, call or email the agent directly and to watch a video while looking for a home.

Millennials Lead the Way
It comes as no surprise that Millennials lead the way in searching for information with their mobile devices. In fact, they’re more than twice as likely as the average person to search for real estate information on their mobile devices.

Timing Is Everything
While it may appear as though mobile devices are glued to our hands, buyers are not always online looking at homes. Searching peaks on smartphones at 6pm, and peaks on tablets at around 11pm.

Similarly, online home searches pick up over the weekend that people are more likely to be out looking at homes and attending open houses.

Real Estate Isn’t All They’re Searching For
Although buyers are searching for listings online, they’re also learning more about their financing options. One-quarter of Google searches for mortgages were made on mobile devices, with “mortgage calculator” being the most popular search term.

Searching For Their Dream Mobile Home on Their Mobile Phone?
The economist E.F. Schumacher once said “Small is beautiful,” and according to the latest search results about what buyers are searching for, buyers seem to be taking this sentiment to heart. According to Google’s data, there’s been a shift from searching for large, sprawling estates to searching for smaller properties. In fact, the original small homes—mobile homes—have seen a rise in searches since 2011.

Whether these buyers are retirees who are interested in downsizing or younger buyers who don’t want to be latched to a big house with an even bigger mortgage, more people are interested in mobile homes. Mobile homes are becoming more upscale and customizable, and are attracting wealthier buyers who are looking to customize the spaces with hardwood floors, granite countertops and high-end appliances.

Reposted from:  http://blog.referralmaker.com/index.php/more-of-todays-buyers-use-technology-to-find-their-dream-homes/