Some stats for the year 2010 as predicted by the National Association of Home Builders:
- New single family home starts will jump nearly 40% this year to 610,000 units
- The number of foreclosure notices could surpass last year's 2.8 million
- Mortgage rates have continued to fall in 2009 and are stabilizing around 5% for a 30 year conforming loan
- The first time homebuyer tax credit, up to $8,000, is scheduled to end on April 30th of 2010
1. Own or Rent? - Owning a home is expensive. In addition to the down payment and mortgage, you'll have to pay for closings costs, insurance and maintenance. To figure out whether it's financially smarter to buy or rent in your area, calculate and compare total home ownership costs to rental rates.
2. Consider Monthly Costs - Even if you can scrounge up a down payment, figure out before buying a home whether you can comfortably cover the full costs of ownership--including the mortgage, taxes, insurance and regular fix-up costs.
3. If you're buying your first home, the feds have a deal for you: An $8,000 income tax credit for those who sign a binding contract before May 1. Then again, it's entirely possible that, like past deadlines, this one will be extended.
4. Getting a Government-Backed Loan - As of this month, mortgages guaranteed by the Federal Housing Administration got harder to come by. Would-be buyers with a credit score of 580 or less now must put up a 10% down payment. That too may change.
5. Avoid Family-Assistance Tax Traps - Before applying to the Bank of Mom & Dad, note that outright cash gifts can result in big tax bills. Avoid them by structuring parental assistance as a bona fide loan with minimum interest rates set by the Internal Revenue Service. Forms for such transactions are posted at sites like Nolo.com.
6. Consider Foreclosures - Foreclosed homes often sell at discounts--but you'll have to act fast and often with help from a real estate agent who specializes in foreclosures. It also pays to first get a mortgage pre-approval letter from a lender. Among the best markets for foreclosures: Phoenix, Las Vegas and central Florida.
7. Factor in Property Taxes - Got your eye on a dream home in Westchester County, N.Y., or Marin County, Calif.? Both are property tax danger zones, according to a recent Forbes analysis. Before taking the plunge, consider the thousands of dollars a year you might save by moving a county or two away.
8. Beware of Title Insurance Rip-Offs - In some states, home buyers can save as much as $1,000 on title insurance by shopping around, says Carolyn Warren, author of Homebuyers Beware. Also note that some states mandate lower rates for a buyer if a property's previous owner purchased title insurance within the past few years.
9. Consider High-Deductible Home Insurance - If you're a do-it-yourselfer moving into a new home, consider lowering your homeowners insurance premium by raising the deductible. Even if you're buying an older home, or aren't too handy, it might not be cost effective to pay a lot in extra premiums to insure against that last dime of potential liability.
10. Cut Insurance Costs By Upgrading - Security systems, smoke alarms and other upgrades can cut your insurance premiums. It can also pay to insure your home with the same company that covers your car, boat or other property.
Because of the many legal and tax situations that can arise through the sale and purchase of real estate ALWAYS consult with your ATTORNEY or ACCOUNTANT before getting into contract.
Credits to:
Forbes Ten Tips For First Time Homebuyers
Thomas Feng, Realtor
Thomas.Feng@CBnorcal.com
Copyright 2010 by Thomas Feng, All Rights Reserved. You may reblog or republish with links back to this post.
* THIS ARTICLE WAS ORIGINALLY PUBLISHED AT http://www.SaratogaHouses.blogspot.com *
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