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What You Need To Know About Home Inspections

A home inspection іѕ one οf tһе first investments a buyer mаkеѕ іח a property. Tһе purpose οf a home inspection іѕ tο check out tһе home fοr potential problems before a buyer рυrсһаѕеѕ tһе home. Many real estate рυrсһаѕе offers contain a home inspection contingency clause.

A typical home inspection саח last up tο three hours. Tһе inspector mаkеѕ a thorough examination οf tһе accessible areas аחԁ systems οf tһе property. Tһе fee fοr an inspection ranges between $300.00-$500.00 аחԁ covers a standard list οf items. If additional tests аrе requested οr required, аח extra charge mау apply.

A home inspector wіƖƖ take уου through tһе home step-bу-step, pointing out potential аחԁ חесеѕѕаrу repairs. Tһіѕ information саח bе invaluable wһеח negotiating tһе рυrсһаѕе price οf tһе home. Tһе inspection аƖѕο gives tһе buyer a fаחtаѕtіс opportunity tο become familiar wіtһ tһе details οf tһе systems οf tһе home.

Tһе standard systems οf tһе home tο bе inspected include tһе structure, electric, heating/air conditioning, аחԁ plumbing systems.

Tһе framing аחԁ foundation οf tһе home іѕ considered tһе structure. Tһе heating аחԁ air conditioning system wіƖƖ bе tested during tһе inspection. Tһе vent systems wіƖƖ аƖѕο bе examined.

Tһе plumbing system wіƖƖ bе tested including аƖƖ fixtures аחԁ faucets. Drains аחԁ plumbing vent systems wіƖƖ bе inspected. If tһе home һаѕ a sump pump, іt tοο wіƖƖ bе tested.

Iח addition tο tһе standard systems, tһе home inspector wіƖƖ inspect аƖƖ accessible areas οf tһе home including tһе exterior, interior аחԁ basement οf tһе home.

Tһе exterior inspection includes tһе roof, foundation, doors, decks, balconies, porches, аחԁ аחу walkways οr driveways leading toward tһе entrance οf tһе home.

Tһе interior inspection includes walls, ceilings, floors, stairways аחԁ railings, basement, doors аחԁ windows. Additionally, tһе home inspector wіƖƖ test major kitchen appliances such аѕ tһе oven, stovetop, аחԁ microwave oven.

Aftеr tһе inspection уου wіƖƖ receive a comprehensive report аחԁ supplemental material. Tһіѕ educational material іѕ οftеח іח tһе form οf a book οr binder. Tһе report wіƖƖ list аחу issues uncovered during tһе inspection.

It ѕһουƖԁ bе noted tһаt, wһіƖе home inspections саח bе informative аחԁ useful, buyers ѕһουƖԁ חοt expect tһеm tο bе technically exhaustive. Tһіѕ іѕ bесаυѕе Standards οf Practice require οחƖу tһеу bе based οח visual inspections. Tһе inspector іѕ therefore οחƖу required tο look аt tһе stated components аחԁ systems tһаt саח safely bе accessed, аrе operational, аחԁ саח bе operated without ԁаmаɡе tο components.

Inspectors саחחοt, аחԁ wіƖƖ חοt, fοr example, disassemble equipment tο determine tһе condition οf hidden components, ѕіחсе tһе process οf disassembly саח itself cause problems.

Water stains οח a ceiling? Aח inspector саח speculate аѕ tο tһе possible cause, bυt һе саחחοt tear out tһе drywall tο see wһеrе іt іѕ coming frοm. Tһе integrity οf buried plumbing drains? Inspectors ԁο חοt perform ultrasonic testing οr video scans. AƖƖ tһеу саח ԁο іѕ look fοr аrе telltale signs οf problems, аחԁ offer tһеіr opinion аѕ tο tһеіr possible source. .

Buyers аƖѕο need tο bе aware tһаt a home inspection wіƖƖ חοt include аח evaluation οf everything іח a home. Fοr example, аח inspection οf a septic system саחחοt legally bе performed bу a licensed home inspector. Beyond tһаt, things Ɩіkе window air conditioners, water filtration systems, countertop microwaves аחԁ οtһеr non-hardwired items аrе аƖѕο חοt раrt οf tһе inspection.

Aחԁ, consider washers аחԁ dryers wіtһ laundry іח tһеm – tһеѕе саח′t bе operated fοr obvious reasons. Additionally, іf tһе house water, gas οr electricity іѕ turned οff, οr аח appliance οr fixture іѕ valved οr breakered οff, аח inspector ѕһουƖԁ חοt bе expected tο turn οח tһе appropriate valves οr circuit breakers. Tһіѕ іѕ fοr ɡοοԁ reason: Tһе circuit οr system mау bе rendered inactive bесаυѕе οf аח electrical fault οr leak, unbeknownst tο tһе inspector. Turning οח items tһаt аrе shut οff bу valve (clothes washers οr barbecues), οr bу circuit breaker (spa tub, baseboard electric heat) саח result іח unanticipated property ԁаmаɡе tο tһе home οr personal injury tο tһе inspector. Services tһаt аrе shut οff сουƖԁ bе due tο a gas main leak, electric service entrance problem, οr water line brеаk.

Another common misconception bу buyers іѕ tһаt home inspectors аrе experts οח аƖƖ things tһеу inspect, аחԁ tһаt wһаt tһеу ѕау іѕ tһе final word οח defects. Consider tһе home inspector аѕ tһе “general practitioner” οf tһе health οf tһе home tһеу аrе evaluating. Jυѕt аѕ mοѕt people ԁο חοt expect tһеіr family doctor tο bе аbƖе tο correctly diagnose everything tһеу see, аחԁ аrе used tο being referred tο specialists, ѕο іѕ trυе οf home inspectors.

Nο matter һοw many years οr inspections аח inspector һаѕ under һіѕ οr һеr belt, חο one һаѕ аƖƖ tһе аחѕwеrѕ. Structural, roofing, suspected underground fuel oil tanks, suspected mold οr termite activity аחԁ heating/air conditioning issues аrе οftеח cited bу home inspectors аѕ areas wһеrе tһеу recommend buyers ɡеt a “second opinion” frοm a licensed οr certified professional іח those specialties.

Aѕ a home buyer, іt іѕ уουr responsibility tο pick tһе home inspector уου want tο υѕе. Yουr real estate agent саח bе very helpful іח giving уου a list οf names οf qualified home inspectors. Hοwеνеr, іח חο way аrе уου obligated tο υѕе tһеm. Tһеrе mау bе others out tһеrе tһаt аrе highly qualified аחԁ experienced. WһіƖе іt іѕ convenient fοr уουr real estate agent tο obtain аח inspector аחԁ schedule аח inspection fοr уου, remember tһаt tһе inspector tһаt tһе agent prefers tο υѕе mау חοt bе tһе one wһο іѕ best fοr уουr needs.

What Things Should You Know about the Truth In Lending Act?

TILA, the Truth in Lending Act, or Title I of the Consumer Protection Act of 1968 is a federal law which was designed to protect consumers in credit transactions. At the heart of the Act, the intent is to protect consumers from bank fraud, unfair and predatory lending practices which lenders would often engage in.

Mandatory disclosure is the strongest part of the Truth in Lending Act because lenders are no longer allowed to obfuscate lending terms. Clear and concise information must be disclosed to the consumer before credit is extended and any documents are signed.

Among the things that the lender must disclose to the consumer are: The loan terms, total costs and annual percentage rates in order for the consumer to be able to make a knowledgeable decision whether to accept the loan. In the past, it was not unusual for unscrupulous lenders to include extra conditions in the fine print which would change the terms of the loan.

It still pays for the consumer to be knowledgeable and read the fine print, even if there is a federal law that offers protection. There is no one who should sign a legal document without knowing and fully understanding what the legal document actually says.

Any lender who fails to comply with the requirements of the act can be held liable. Lenders can be sanctioned for acting in contravention to the act, even if the intent was not to act in contravention to the act, and even without regard to the nature of the violation.

Lenders must also keep proof of compliance with the requirements of the Truth in Lending Act for at least two years after the date when disclosure was done. In addition, the lender is required to provide the consumer with a document where disclosure is conspicuous and clear.

Congress understood that varying loan rates, different loans, terms, etc. can be very confusing even to people who have experience with loans, let alone to the average consumer. TILA was passed as a way to try to eliminate some of the confusion and to do away with any deceit or attempts to mislead consumers.

Consumers were often being misled, misinformed and even defrauded, and the Truth in Lending Act offers federal protection. As an added protection, the consumer has a right to rescind until midnight of the third business day after the transaction, delivery of the notice of right to rescind or delivery of disclosure materials, whichever comes last. This is an added safety valve which a consumer can resort to in the event he/she did not fully understand the terms of the credit he/she was being offered.

It pays to understand any legal contract being signed, no matter what the nature of the contract may be. Consumers need to be knowledgeable, not only about the law that protects them, but also about the contents of what they may be signing. It is only through being better educated that consumers can avoid many of the pitfalls that come with signing contracts, especially where loans and the terms thereof are concerned.

10 Simple Steps to Make Your Home More Sellable

Presentation is everything. Make a good impression on Buyers by taking these 10 simple steps!

1.    Get Rid of Clutter! You want Buyers to be able to see the space your home has to offer and to picture how they themselves could potentially live in and use the space. You’ll want to make this possible for them by throwing out or filing away old stacks of newspapers and magazines, packing away most of your small decorative items, and storing out-of-season clothing to make your closets appear roomier. Make sure your rooms don’t have too much furniture! An overcrowded room makes the room seem smaller and less inviting.

2.    Wash Windows and Screens. You want your home to be light and airy. Make sure you wash your windows and screens, and use more lightweight curtains to let in as much light as possible.

3.    Keep Everything Extra Clean. A clean house tells the Buyer that the home has been well-cared for. It also gives the Buyer a good first impression. Mop and wax floors. Clean the appliances. Even clean fingerprints off of the light switch plates. Do everything you can to make sure the home is extra clean to attract Buyers.

4.    Get Rid of Smells. You don’t want to turn any Buyers off with offensive odors in the home! Be sure to clean the carpeting, upholstery, and drapes to eliminate any odors, pet smells, and smoke. Ventilate the home by opening a window or two to let in some fresh air. Set out potpourri, lightly scented candles, or fresh baked goods for a nice homey smell.

5.    Replace Light Bulbs with Higher Wattage Bulbs. To make the rooms seem brighter, especially basements or any other dark rooms, use higher wattage light bulbs. Make sure to replace any light bulbs that are burnt out.

6.    Make Minor Repairs. Even minor problems can make a bad impression. Sticky doors, cracked caulking, torn screens, or leaky faucets all seem trivial, but they’ll give Buyers the impression that the house isn’t well-maintained.

7.    Tidy Your Yard. Nice curb appeal is important! Cut the grass, rake the leaves, trim the bushes and edge the walks. Put a pot or two of brightly colored flowers near the entryway.

8.    Patch Holes In the Driveway and Re-Apply Sealant (if applicable).

9.    Clean Your Gutters.

10. Polish Front Doorknob and House Numbers. This will make a nice first impression! Instead of polishing the house numbers, maybe update them for a new, fresh look.

Sell Your Home with Staging Techniques

Marketing plays a key role when selling a product, especially when that product is as expensive as a new house. It is important to showcase the best elements of your house when showing it to potential buyers.

Staging is the term for preparing a property for open houses. It is the equivalent of shaving or putting on makeup before a job interview or date. Here are some tips:

People want to imagine themselves living in their home; they don’t want to be reminded that another family currently resides there. For that reason, keep the décor simple (so they can better visualize replacing it with their own). Also make sure to remove or hide any personalized elements (i.e. photos) when you are expecting buyers to visit.

In general, larger houses are more attractive to potential buyers. However, if your real estate isn’t as large, there are ways to make it appear as though it is. In some cases, it is recommended that you repaint the walls in lighter colors, which give the illusion of more space.

Quality lighting is essential. Make repairs to any leaks, squeaky doors, or other minor problems that are easy to fix but could hurt your presentation. Such issues can have a negative impact on the perceived value of your home, possibly drawing future negotiations lower than you would like.

For the best presentation, clean the house as thoroughly as you possibly can. A dirty or untidy house not only makes potential buyers worry about hygiene, but it also makes your house look smaller.

Don’t forget the exterior of the house! It is the first impression buyers get, which often sticks with them. Keep up with the landscaping in order to maintain a well-kept appearance that doesn’t hide the house.

Finally, make visitors feel comfortable. Set the thermostat at a comfortable temperature, and decorate with fresh flowers or other plants.

If you keep these tips in mind when preparing your property, you will greatly increase your chances of success!

A Painless Way to Shorten Those Painful House Payments!

If you are like the average American your home is your largest investment and your largest expense. Over the course of a 30-year fixed rate loan you will pay hundreds of thousands of dollars in interest alone. Remember the moment when you were signing the documents to purchase your house and realized how much you were going to pay just in interest? Fortunately, there is a pain free way to shorten the length of your house payments, prevent the bank from taking more of your hard earned money, while keeping more of your money in your pocket!

So what is this magical solution that will shorten my house payments you ask? The solution is simply a magical case of mathematics called a bi-weekly payment plan. The majority of Americans are paid by their employer every two weeks. Therefore, you split your monthly house payment in half, for example a $1,400 payment would be $700 and you pay that amount every two weeks when you get paid. As a result, over the course of an entire year you will make one additional house payment. The good thing about this additional house payment is that it is being used to pay down the principal amount of the loan, not the interest.

By paying half of your house payment every two weeks you are actually putting your mortgage on a diet and trimming away all of that interest. The next question to be answered is how much will the bi-weekly payment plan shorten my payments and how much will it save me? By making bi-weekly payments you will shorten the payoff time on your home loan from 30 years to between 22-24 years on average. In addition, you will also be saving tens of thousands of dollars on interest payments alone. Back in school you may have hated math, but the bi-weekly payment plan is one formula where you will love the answer.

A Quick Guide to Shopping Rates Online

Can’t decide which mortgage product suits you best? Try shopping for mortgage rates online and you’ll have a plethora of choices. Although most of us are already aware of the dangers that adjustable rate mortgages can bring (thanks to the real estate market collapse), not all potential homebuyers have a sound idea of how to choose the best mortgage that they can easily manage.

Because many are now enticed of how low interest rates can reduce monthly payments, homeowners are scrambling to get the best rate in loans for which they qualify. Shopping for mortgage has never been easier but these tips will guide you on how to properly compare mortgage rates.

Step 1: Check the lender’s criteria for qualification
Lenders differ from each other in terms of classifying which borrower is well qualified. A combination of factors such as credit score, principal payment, current debt and other criteria are considered by banks. If you think you don’t qualify in some banks, do not include them in your list.

Step 2: Review national average rates
Every week, Freddie Mac publishes its Primary Mortgage Market Survey (PMMS) that “surveys lenders each week on the rates and points for their most popular 30-year fixed-rate, 15-year fixed-rate, 5/1 hybrid amortizing adjustable-rate, and 1-year amortizing adjustable-rate mortgage products” along with comparisons of rates on different U.S. regions. This is a good starting point on your search since you’ll get a good idea of how rates are faring in your area.

Step 3: List loan-related fees among lenders
All lenders charge borrowers on the processing, approval and making of the mortgage loan. By listing these charges, you can find better gauge which lender is competitive enough to keep your payments lighter. After determining their uniform charges, remember to separately list the fees which are independent to each lender to keep a more accurate tally later on. These “other” fees include processing and wire transfer fee, origination fee, mortgage insurance premium, appraisal fee, credit report cost, tax service fee, underwriting fee, application, commitment, etc.

Step 4: List the lock-in period of mortgages
Because mortgage rates depend on a number of factors, they vary daily – keeping borrowers and lenders tuned to its movements. In order to minimize the risk that you will be paying a higher mortgage than the one that you had originally applied for, locking in a mortgage rate is highly encouraged. The most common lock-in periods are 15, 30, 45 and 60 days. List the lock-in fees and penalties that lenders are charging since you’ll be spending for this eventually.

Step 5: Group all lenders sharing the same interest rate and lock-in periods
Create a table that will help you compare lenders with similar offers. Refer to your PMMS if they are not offering rates that are way too high than the national average. By grouping lenders together, you can eliminate any biases that may come during your research.

Step 6: Add the independent charges of each lender
By calculating the annual percentage rate (APR) per lender, you will be able to arrive at a more accurate decision of which lender will offer a more competitive rate based on their loan options. Remember, a high mortgage loan processing fee doesn’t necessarily mean the mortgage carries a high interest rate. It all depends on the offer of the lender.

Everything You Need to Know about Adjustable Rate Mortgages

One of the things you should know before purchasing a property is the wide range of mortgage types offered by lenders. You should become knowledgeable about the different pros and cons of acquiring a particular mortgage type. You should also base your decisions according to your unique needs as buyer and your financial capacities as a borrower. Once you have chosen the best mortgage type that would help you accomplish monthly repayments easier, you would never experience losing ownership over your home.

Most homebuyers like you prefer applying for adjustable rate mortgages than fixed rate mortgages. They consider this loan type as easier to repay than other kinds of loans. However, this does not necessarily mean that you would also enjoy paying for an ARM rather than other kinds of home loans. If you want to determine whether adjustable rate mortgages are also right for you or not, you should read this article. It explains everything you need to know in order to assess the pros and cons of acquiring an ARM.

Going back to basics

Before proceeding with understanding the different advantages and disadvantages of acquiring an ARM, you should first understand its basic and simplest definition. By having a basic understanding about this particular mortgage type, it would be easier for you to know how it can become beneficial or harmful for your finances.

Adjustable mortgage rates are famous for the rock-bottom monthly repayments they require. Unlike fixed rate mortgages, they do not require hefty monthly repayments. However, this kind of mortgage is also affected by fluctuating interest rates. Even though repayments are inexpensive during the first few months of the loan, they would start climbing up again once the adjustment period has already ended. This can become risky for borrowers who cannot afford sudden increases in their mortgage repayments.

Fluctuating interest rates

The basic feature of adjustable rate mortgages is their fluctuating interest rates. After the adjustment period given to a borrower is finished, the mortgage repayments he would need to make would start to increase. The particular increase would depend on the new set of interest rates that his lender would provide. This scenario could be problematic for those who do not have extra budget for handling increased mortgage repayments.

Once a borrower receives a new set of interest rates, he would need to have a mortgage recalculation in order to find out how much he would spend for repaying his home loan little by little.

Index rates and margins

Index rates are usually represented by tow set of numbers. The first figure corresponds to the duration of the adjustment period when repayments remain stable and unchanged. Meanwhile, the second figure represents the amounts of increases on interest rates once the adjustment period has ended. Lenders usually provide their borrowers with copies of the index rates they implement in order to guide help them with their decisions.

Meanwhile, margins represent a lender’s markup or the amount of profit he generates from a particular loan he is offering. It also shows the particular interest rate that lenders implement for borrowers who carry loans from them.

These are the most important things you should know about adjustable rate mortgages. If you want to consider this kind of loan, you should first assess your capability to repay constant increases on your monthly mortgage repayments.

Managing The Stresses Of Buying And Selling A Home

Buying Your First Home

Things to Know

1. If you do not think you can stay put, do not buy. With all of the transaction costs of both buying and selling home, there is the potential to actually end up losing money if you sell too soon. So if you think you cannot commit for a least a few years, do not buy.

2. Look into your credit scores and take appropriate steps to fix if necessary. You should definitely look into your credit score a few months before you even start home shopping. Double check the facts to make sure they are correct and fix any problems you discover.

3. Do not look at homes you cannot afford. Stick to what is in your price range and do not budge. Rule of thumb: typically you can only afford a home that is about two-and-one-half times your annual salary. It’s best to sit down and calculate your income, debts and expenses.

4. It is possible that you might still qualify for a loan if you cannot put down the standard 20 percent.

5. Shop for your new home in a district that has good schools you like.

6. Definitely talk to a real estate agent. They can answer all of your questions and even show you listings that are about to go on market. Look for an agent that has your best interests at heart.

7. Make a careful selection between points and rate. Paying for additional points will lower your interest rate. Lower interest rates will save you money in the long run.

8. Save some time by getting pre-approved by a lender before you start house hunting.

9. Do any and all of the necessary research before you start bidding on a home.

10. Be sure to hire a home inspector.

Important Considerations For the First Time Home Buyer

Important Considerations for the First Time Home Buyer

Buying a home is a big decision, very big. Being it will most likely be the largest purchase you will ever make, give it lots of thought before doing anything. Let’s go over the facts of home ownership before deciding that buying is right for you.

What are the reasons why most people buy their own home? How will you benefit from being a homeowner?

• Buying a home puts money to work for you – your money and other people’s money.
• Mortgage interest is tax deductible. This can save you a significant amount of money at tax time.
• The money you pay each month to live (currently in the form of rent) will go toward the equity in your home. Home equity is a great money source from which you can borrow in the future for home improvements, eliminating debt, or paying off unforeseen expenses. Home equity can also put a lot of money in your pocket if you were to sell your home for more than you paid.
• Owning a home can increase your net-worth.
• Timely payments on your mortgage will help you establish good credit.
• The satisfaction of owning your own home is a subjective, yet popular reason for wanting to buy a home. You can make improvements to your home according to your own likes and lifestyle – without having to check with anybody first.

These reasons are quite compelling. But before taking the plunge, be aware of the practical considerations of owning a home. Think these through:

Timing

Is the timing right? If your family is growing and you need more space, yes now might be the time to buy. If however, you are making a career change which may relocate you to another city, going back to school, etc. now might not be the time to make the purchase. Also consider if you have the time right now not only to look for a home but to maintain a new home.

Home Needs and Wants

Are you sure you know what you want in a home? Before spending too much time on the internet searching for homes or driving around looking at houses for sale, make sure you know exactly what your home needs and wants are. The last thing you want to do is assume a particular home or neighborhood will “be fine” just to be disappointed later. Give your home buying wants and needs the time and thought they deserve.

Affordability

Can you afford a home? While it is true that you will be borrowing most of the money you need to purchase a home, there will be multiple expenses that need to be paid up-front. These include a down payment, inspections, reports, closing costs, etc. And of course, ask yourself if you can afford the monthly payments in order to pay back your loan.

Responsibility

Are you responsible?  There are other responsibilities to owning a home than making a mortgage payment each month. You will now be completely responsible for home maintenance and home repairs. Are you ready to mow the lawn yourself or can you afford somebody to do it for you? Replacing the roof is now up to you as is buying that new refrigerator. Make sure you have the inclination, time, and money to be a responsible home owner.

Flexibility

Are you ready to commit to one place for a long time? Unlike a yearly lease that allows you to pack up and move at virtually any time, buying a home will essentially tie you down. Consider your flexibility. If you think you may need or want to move any time soon, put off buying a home.

As you can see there are many issues to evaluate before you rush into purchasing a home. Think through each thoroughly before you commit to homeownership.