NO-SKIP STEPS TO BUYING A HOME

There are eight major steps you will take when you buy a home and each one is as important in its own way as the last.

Make your wish list -- Decide where you want to live and how many bedrooms and baths you'll need. Consider lifestyle -- condominiums offer shared amenities, with little responsibility. Single-family homes offer more space and privacy, but they also require more exterior and yard maintenance. Consider buying a fixer-upper for a reduced cost so you can remodel it to suit your needs.

Get preapproved -- You can prequalify yourself on the internet, but it takes a lender looking at your personal financial information to get prequalified. Your income, credit scores, revolving debts, obligations such as child support as well as the type of loan you choose will influence how much home you can buy. Other factors such as the down payment, interest rate and terms (30-year fixed or an adjustable rate) will determine what you can afford in monthly payments.

Hire a real estate professional -- Armed with a sensible price range, you're ready to hire a real estate expert to help you find the right home. Your real estate professional should be expert in the area where you want to live and familiar with the type of home you want to buy. Your agent should have house-by-house experience in the neighborhood you want so she or he can advise you.

Select your home -- No home is perfect, so don't let minor flaws influence you. Think long-term. Which available home best suits the needs of your household now and in the years ahead? Consider the amount of space, the floorplan, privacy, entertaining options and potential upkeep. Don't buy more than you need or can comfortably afford.

Make an offer -- Your offer should reflect current market conditions. If a home has been on the market a long time, you can ask the seller for a price reduction, but if it's new on the market, the seller is unlikely to comply. Sellers are more likely to respond to how much you love the home, than all the reasons why you don't think it's worth the asking price. Ask your real estate professional for advice on how to negotiate.

 

Get an inspection -- A home inspection is a professional third-party opinion of the home's condition. The inspector will point out the age of systems, and large and small repairs that are needed, so you'll know what you're facing as the next owner. Don't sweat small cosmetic flaws. Concentrate instead of high-cost items to replace such as air conditioners and roofing.

Get an appraisal - The bank appraisal determines market value to the lender. The appraiser will use comparables of similar homes that have recently sold. If the home doesn't appraise for the purchase price, the bank will refuse to make the loan unless you renegotiate with the seller. If it appraises for the asking price, the lender will move toward closing.

Go to closing -- Once final negotiations are complete, the parties to the transaction meet at the escrow office. This could be a title company, real estate attorney, or other closing agent customary in your area. All paperwork is signed by both parties. The lender pays the seller, minus any liens against the home such as the seller's mortgage. Once all the disbursements have been made, you get the keys to your new home, according to your agreement.

10 Inexpensive Ways To Improve Your Home Security

Keeping your home and family safe is a priority we all share. But beyond locking the doors and getting a home alarm, there are numerous steps we can take to protect who - and what - we love, and it doesn't have to break the bank.

1. Change your locks

Did you change your locks when you moved into your new home? Yeah. Neither did we. That means someone might already have the most important thing they need to get into your home: a key.

2. Upgrade your door security  

While you're changing your locks, look for those that give you more secure options. If you're not sure how important this is, consider what Family handyman reports about FBI burglary statistics: "65 percent of break-ins occur by forcing in the front, back or garage service door."

3. Remove that extra key

The FBI also reports that 12 percent of break-ins are caused by thieves simply finding your hidden key. If you have one sitting under your welcome mat or in a planter, it's time to remove it.

4. Use timers

"Put interior lights, TVs, and radios on timers so that you can create the illusion that someone is home when they're not," said Bob Vila. "Modern digital light timers offer a key benefit over traditional models by having lights cycle on and off randomly."

Make sure to include motion detector lights in key spots around the exterior of your home. A light that pops on just as a burglar is approaching your back door may be enough to make him back away form your home. Home automation products make all of this easier than since you can control lights, TVs, and other items via Smartphone.

 

5. Get a dog

Seriously. Homes with dogs are less likely to be broken into, according to a study by The University of North Carolina, because they bark to create a ruckus and can also harm an intruder by biting.

6. Fake the alarm

If you can't swing the cost of an alarm, pretend you have one. "Thieves look for an easy mark; making your home look tough to crack will encourage them to move on," said HGTV. "You can easily put up security system decals - a clear deterrent - even if you don't have a system."

7. Install a camera

"Thanks to relatively inexpensive DIY systems, you can install a security camera outside (or inside) that lets burglars know you're watching their every move," said HGTV. A variety of cameras are offered, and you can pick one up for under $100.

8. Check doors and windows

You might think your home is more secure than it is. Maybe that backdoor is easy to open with a good push or the guest room window isn't shutting all the way. Eliminating easy access points by shutting doors and windows and locking everything up will cost you nothing, but if you need a backup for that easy-access slider door, a good old broomstick cut down to size will do the trick.

9. Call the police

In many areas, a police officer will visit your home to give you tips on how to make your home more secure, and it will cost you nothing.

10. Eliminate hiding spots

"If your shrubbery is too tall, bushy, or not well spaced, you're providing a nice hiding spot for a potential burglar," said Consumer Reports. "Trim and prune plantings."

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HOME SELLERS HAVE CLOSING COSTS ALSO

We have all heard about the high costs imposed on homebuyers -- ranging from lender points, title insurance and settlement fees. However, if you are selling your house, you should understand you will be hit for some closing costs also.

When a seller signs a listing agreement with a Real Estate Broker, authorizing that person to sell the house, in addition to all the other forms which sellers receive, the seller should be given an estimated settlement statement. This statement will project the bottom line to the seller, based on the listing price. When an offer is later presented to the seller, the settlement statement should be updated, to reflect the actual terms of the proposed contract.

The following charges are generally made to the seller:

• Real estate commission: The seller should be informed of the dollar amount to be paid out of settlement for the commission.
• Mortgage payoff: Most sellers have at least one mortgage outstanding on the property. Your lender will be able to give you an approximate payoff figure, if you give them a tentative settlement date. Don't forget to add a daily interest charge until the lender receives the full mortgage payout. You should also inquire whether there will be any prepayment penalty. Some older loans still require the borrower (in this case the seller) to pay a percentage of the loan if it is paid off in full prior to the full expiration of the mortgage term. In some instances, the prepayment penalty can be avoided, or waived by the lender, and you should inquire as to the policy of the particular lending institution.
• Points: This is perhaps one of the least understood areas of real estate financing. Sellers often question why they have to pay points to enable the buyer to get their loan. A point is equal to one percent of the loan.
  Some loans, such an FHA or VA, put limitations on the amount which the buyer can pay for closing costs. Many buyers who will be obtaining conventional financing also want the seller to pick up some of these settlement charges -- including points paid to the lender.
  Seller paid points are still deductible for tax purposes by the buyer. Thus, while sellers want to get the most dollars from their house, there are often negotiation advantages if a seller offers to split points with the buyer. Such an arrangement may be the clue to closing the deal.
• Termite: Most buyers require that a termite inspection be performed, at the seller's expense. Normally, the fee for this service runs between $50 to $75. But I have seen too many instances where the seller is "hit" with a sizeable repair bill, due to termites and damage being discovered by the termite company.
  If the seller has a current contract with a termite company, that company should be willing to give the required letter for no cost or a nominal charge. Finally, when you make arrangements with the termite company to do their inspection, make sure they understand they will not do any repair work without informing you in advance. Since the seller is paying for these charges, the seller should have the option to shop around for the best price.
• Water escrow: In many jurisdictions, water is the only utility that creates a lien on the property. In order for the title attorney to give free and clear title to the buyer, all liens must be paid and satisfied. Thus, it is standard practice for the settlement attorney to escrow some money to cover the final water bill. Usually, the office conducting settlement will make arrangements to obtain a final water reading, pay the bill, and refund the balance of the escrowed funds, if any, to the seller.
• Release charges: When the seller obtained mortgage financing, it usually was in the form of a deed of trust. This is similar to a mortgage, but the property is deeded "in trust" to independent trustees who are authorized to sell the property if a default occurs. When the mortgage is paid in full, the trustees are entitled to a nominal "trustee's fee" and there is a small governmental charge to record the trustee's release. These items are always withheld at settlement and deducted from the seller's funds.
• Other government charges: Many jurisdictions impose a tax on the transfer of real estate. Some call it a "Grantor's tax", which others call it a "Recordation and Transfer" tax. Unless your state law mandates who is to pay this fee, it is a negotiable item which should be on the bargaining table when seller and potential buyer are hammering out the terms of the purchase and sale.
• Settlement charge: Some settlement offices will impose a nominal charge on the seller for "settlement services."

Many sellers are often surprised when they learn, for the first time at the settlement office, that they will not be getting as much from the sale of their house as they had anticipated.

And don't forget to (1) cancel your home insurance policy as soon as you get the sales proceeds, and (2) if you are making automatic mortgage payments, cancel that also.

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BUYER ETIQUETTE: HOW TO GET THE HOME YOU WANT

As most people know, the real estate market shifts between a buyers' or sellers' market, depending on supply and demand. However, regardless of which market we're currently in, buyer etiquette can help you get the home you want with the least amount of stress.

It may sound odd to some, especially first-time homebuyers, but manners matter when it comes to the real estate transaction. I'm not talking about "Please" and "Thank you." So, what exactly does this mean?

Buyer etiquette is not only about doing the things that are vital to helping sales go through but it's also about general manners like being on time for your viewing of a home, being prepared with your financial documents, and being responsive when requests for documents, signatures, or answers are needed from your real estate professionals.

This isn't about lecturing buyers about minding their manners; rather, think of this as the inside tips to helping land the home you really want. For instance, sometimes, being late for a viewing of a listing could cause you to lose that particular home. In a really hot real estate market, if you're late or you don't show up for the listing, you might not get a second chance - the home could be sold.

Another consideration is to be aware of how much time you need to view a home. If you try to see too many homes in one day, chances are you're not going to treat each home with the same respect. The first homes might get lots of attention by you in terms of time and what you notice. However, by the time you're on, say, 15th home of the day, you might be so tired that you blaze through it barely giving this last home the attention it deserves. You'll end up wasting your time and potentially making a poor choice because you were worn out when you viewed it. Instead, you may have to return to the last few homes you viewed that day. While it's often expected to return to a home you're very interested in, it's time-consuming to have to return to several homes simply because you weren't able to focus or pay attention in great detail.

One of the most important etiquette tips is to make sure that you've been pre-approved and are a serious buyer, ready to take action should you find the right home. Shopping for homes is serious business. It's likely the largest monetary transaction you'll make; being financially and emotionally prepared is good etiquette and will help expedite the process.

When viewing a home, if the sellers are present (sometimes this happens), don't share your likes or dislikes about the home with them. Be courteous and keep the conversation to a minimum with the sellers. You want to make sure you leave the negotiation process to your experienced real estate agent. If you have questions about the home, be sure to take good notes and consult with your agent. Your agent is the liaison for good reason. The agent is experienced and knows how to find out the information you need without undermining your bargaining position. Polite conversation with the sellers is appropriate if the opportunity occurs. And, if the house isn't right for you from the moment you set foot in it, at least give it a quick walk-through, just to be absolutely certain.

Having good manners when house hunting is about more than just having people like you. It could be the potential development of a successful real estate transaction. Good will during that process helps keep things moving along at a steady pace and possibly with a better outcome than if the sellers were selling to a buyer they really didn't like.

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HOW TO KEEP FROM GOING HOUSE POOR

The only thing worse than not being able to buy a home when you want to is owning a home and not being able to do anything but sit inside because after your house payment, HOA fee, taxes, and household bills, there's nothing left.

A few smart strategies can help you avoid becoming house poor.

Think hard about that pre-approval amount

Just because the bank tells you that you can buy a $400,000 home doesn't mean you have to spend all $400,000. It might be that you're not comfortable with a payment that high if it means you won't have a cushion and can't continue to contribute to your savings.

Things you'll want to consider:

-Can you continue to invest the way you want to?

-Will you be able to keep up (or build) your emergency fund - "A savings account stuffed with six months expenses or more is a vital part of financial stability," said Money Under 30.

-Are you going to have enough money left over to establish a bank account buffer? "Whether you're 15, 25 or 65, if you're having trouble with your money and want to improve, the very first step you should take is to build a bank account buffer," said Money Under 30. "A bank account buffer is my name for what other people may call a cash cushion, mini emergency fund, rainy day fund or back-up savings. When you have a bank account buffer in place, you don't have to worry that a poorly timed Starbucks break you charged to your debit card will overdraw your account and trigger a $35 overdraft fee."

Calculate your ENTIRE payment

Principle and interest will only tell you part of the story. Same with principle, interest, taxes, and insurance. If you're not also taking into account any Private Mortgage Insurance you need to pay, your Homeowner's Association fee, and any special assessments, you're not looking at the whole picture.

Budget for additional expenses

This is not the place for that buffer referenced above, but, rather, a way to make sure you can really handle the home you want without living paycheck to paycheck or, even worse, going into even more debt just so you don't sink. If you don't currently have a yard or are renting, you may not be accustomed to paying landscaping fees. If your new home has a pool, don't forget to budget for that pool cleaner. If you're moving to a larger home, you may also have an increase in costs for your house cleaning service and utilities, and if your commute is longer, you may be paying more in gas and tolls. They are the little things that can creep up and affect your bottom line.

Don't do improvements right away

You might want to wait a few months to see how your expenses pan out before you empty your savings on a new kitchen. Ditto for buying a houseful of new furniture. The desire to fix up the house to your standards or pack it with all-new everything is strong. But a little patience can go a long way. Spreading out your purchases while you increase your savings and waiting for sales and zero interest credit offers can help keep your budget in check.

Be careful with an equity line

Having equity in your home is great if it means you made a smart investment. But using it irresponsibly can quickly make your budget spin out of control. The good news is that the number of homeowners who are under water is dropping - now about a third of the 2010 total. The bad news is that equity can be tempting, and stripping your home of it - and making not-so-smart decisions with the money - can create an underwater situation. If you take out a line with the intent on doing some updates or renovations, you'll want to make sure that you can comfortably afford the new payment and that the renovations you're making will provide a return on investment.

Get a home warranty

Experts are on the fence about this - some say you absolutely have to have one while others find it a waste of money. But if you're the type for whom coming up with thousands of dollars to replace the faulty air conditioner that's no longer conditioning anything or a refrigerator that's stopped refrigerating will be a hardship, the minimal monthly output is far outweighed by the peace of mind of knowing most of your large repairs will be covered.

Claim a homestead exemption

In some states, you can file a homestead exemption to lower your property taxes. Savings can add up to hundreds of dollars per year or more. You can get more information and learn who's eligible here.

Change your tax withholding

One of the great benefits of home ownership is the tax write-off. If you leave your withholdings alone, you may expect to get a big chunk of money back at the end of the year, as long as nothing else has changed. But by adjusting your withholdings, you can hold on to more of your money every month to help offset higher expenses.

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4 Renovations That Could Decrease Your Home’s Value

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6 TIPS TO GET APPROVED FOR A MORTGAGE

What Are Your Options?

Everyone's financial situation is unique. With that in mind, here are six different options for making your homeownership dreams a reality.

1. Get a Cosigner

If your income isn't high enough to qualify for the loan you need and if you can find a cosigner with enough disposable income, part of that person's income can be considered toward your loan amount regardless of whether the person will actually be living with you or helping you pay the bill. In some cases, a cosigner may also be able to compensate for your less-than-perfect credit. Overall, the cosigner is guaranteeing the lender that your mortgage payments will be paid.

If you decide to go this route, just make sure that both of you understand the financial and legal obligations the cosigner takes on when he or she signs the loan documents. In the event that you default on your mortgage, the lender can go after your cosigner for the full amount of the debt. What's more, not only will your credit score plunge, but your cosigner's will too.

Of course, you shouldn't take this route if you know you aren't responsible enough to pay the mortgage on time or can't afford the monthly payments, but if you have income that a lender isn't willing to consider (such as self-employment income from a new business that has been very successful) and you and your cosigner are both confident that you can make the payments on your own, then getting a cosigner may be a good option.

2. Wait

Sometimes conditions in the economy, the housing market or the lending business make lenders less generous with loans. If you're in a climate where everyone is panicking, then it may be best to wait things out. When conditions improve, lenders may become more accommodating.

In the meantime, you can work on improving your credit score, reducing your debt and increasing your savings. While you're waiting, home prices or interest rates could drop. Either of these changes could also improve your mortgage eligibility. On a $290,000 loan, for example, a rate drop from 7% to 6.5% will decrease your monthly payment by about $100. That may be the slight boost you need to afford the monthly payments and qualify for the loan.

3. Set Your Sights on a Less-Expensive Property

If you can't qualify for the amount of mortgage you want and you aren't willing to wait, switching to a condo or townhouse instead of a house, accepting fewer bedrooms or bathrooms, or moving to a less attractive or more distant neighborhood may give you more options. As a more drastic option, you could even move to a different part of the country where the cost of home ownership is lower. When your financial situation improves down the road, you might be able to trade up to the property, neighborhood or city where you hope to end up.

4. Ask the Lender for an Exception

Believe it or not, it is possible to ask the lender to send your file to someone else within the company for a second opinion on a rejected loan application. In asking for an exception, you'll need to have a very good reason, and you'll need to write a carefully worded letter defending your case. Your letter should avoid excuses and sob stories and focus only on the facts. Explain how the incident that is preventing your loan from being approved, such as a charged-off account, was a one-time event that will never occur again. This one-time event should have been caused by a catastrophe such as a large and unexpected medical expense, natural disaster, divorce or death in the family. The blemish on your record will actually need to have been a one-time event, and you'll need to be able to back your story up with an otherwise flawless credit history.

5. Try a Different Lender

Sometimes one lender will say no while another will say yes. If the first lender you approach rejects you, there's no reason not to try out a few other options. If every lender rejects you for the same reason, though, you'll know that it's not the lender that's the problem, it's your financial situation. Your only choice at this point is to fix the problem.

When shopping for a second opinion, don't give lenders any inkling that you are feeling even remotely desperate for a loan or they may take advantage of you by tacking higher fees onto your loan or raising your interest rate. Of course, if you are a higher-risk borrower, you may encounter some of these fees no matter what.

Be careful to avoid loan sharks, too. Remember, you don't want just any loan, you want a reasonable loan. One major potential benefit of homeownership is the financial security it can bring, but if you get a bad loan, that aspect of homeownership disappears. In a worst-case scenario, a bad loan could result in your losing the home, as it did for many who bought homes during the carefree lending days of the housing bubble.

6. Team Up With Someone Else

Two incomes are better than one, so if you can't qualify on your own, perhaps you have a family member or friend that you trust enough and like enough to make a major purchase with and live with. It won't be enough to just put them on the loan, of course - they'll need to actually help with the mortgage payments to make it work, and chances are they won't want to pay half the mortgage unless they're living in the new home with you.

Conclusion

To go from rejected to preapproved, it's important to know what lenders are looking for in an applicant. If you've been turned down for a mortgage, make sure to ask the lender plenty of questions about things you could do in your specific situation to make yourself a more attractive loan candidate. With time, patience, hard work and a little luck, you should be able to turn the situation around and become a residential property owner.