suburbs

Is Suburb a Better Option for the Renters?

According to a report of Consumer Housing Trends by Zillow, almost half of the millennial homeowners are moving to suburbs. The good news is a significant number of renters are also following them. The suburban lifestyle is not everyone’s cup of tea, but it has its unique perks that are hard to find in downtown areas. Read More →

research

How to Check the Background of a Property

Finding the dream home is only the beginning of a long home buying process. The first thing you should focus on is the background information on the property. It’s important to know the house’s history of sales, recorded sales prices, the record of foreclosure, and other information. The data will help you taking the final decision about the purchase, negotiating with the seller, and figuring out the fixes and updates the property needs. Read More →

homebuying renting

Is Renting Better than Buying a Home?

Owning a home is almost twice as affordable as renting in terms of monthly payments. Both have their own perks, but renters can have better financial deals when the economy is poor. Many people have made a sizable amount of money just by switching from owning to renting.

Check out the reasons why renting is better than buying a home:

The Changed Perspective of Modern People

People belonged to the earlier generations such as Baby Boomers and Generation X used to purchase a home actually to live in it. They took out a 30-year mortgage and lived in that home for the rest of their life, gaining enough equity in the process to make the purchase profitable.

However, modern people don’t spend their whole life in just one home. They move, refinance, and use the home-sale profits on luxury goods, new cars, or vacations. So, renting makes more sense for them, at least financially.

Home Buying is Risky for Low-income People

Buying a home is a gamble where you have to make monthly mortgage installments, paying utility bills and many fees related to homeownership for years to come. It’s a great risk if you don’t have a steady income and handsome savings to sustain a financial hit without downsizing.

So, renting is safer as you don’t have to deal with a volatile market or revised mortgage rates.

Renters Don’t Need to Pay Maintenance or Repair Costs

Renting an apartment means you will only have to pay the rental, utility bills, and service charge (if there’s any). You landlord will have to pay all the maintenance, repair, and renovation costs. For example, if the shower stops working, the faucet drips water, or the roof leaks, the apartment owner is responsible for fixing these things.

Taxes & Insurance Costs

Renters don’t have to pay real estate taxes, which makes renting lucrative than homeownership. The fees vary by county, but it commonly accounts a lump sum of money. Besides, the amount of property taxes increases with upsizing the houses.

Homeowners also need to maintain an insurance policy. While renters can also take an insurance coverage, it’s much cheaper than the one available for the owners.

The Down Payment

The homebuyers have to pay a sizable amount in down payment, which is usually 20%. On the other hand, renters only have to make a deposit equivalent to one month’s rent, which is significantly less than the initial costs of buying a home.

In addition, a bigger down payment means homebuyers have to pay a lower interest rate throughout the mortgage period. So, many people opt for it even if it’s financially stressful.

The main benefit of renting is that it gives your freedom and flexibility in your financial life. You can downsize, upsize, refinance, or whatever you want at the convenient time.

mortgage

The Right Questions to Ask the Mortgage Lender

Home buying is a tedious process that takes time and is a major financial responsibility. You need to understand your financing options even before start searching for the properties because you have to deal with the mortgage lenders.

The lender or broker is the person or institution that helps you understand how to plan the budget for making the purchase. A successful mortgage approval depends on finding someone who is communicative and is willing to help. However, you have to ask some important questions to ensure that you are going to get the best financial solution.

What is the interest rate?

Your credit and the amount of the loan will determine the interest rate offered by the lender. The rate and two other factors – the loan term and mortgage balance – are vital in calculating the final payment that you will pay per month. The monthly installment will be proportional to the rate and balance.

If the offered amount is way higher than your expectation, clean up your credits and apply again for a revised rate.

What are the qualifying requirements for the mortgage?

The broker assesses many aspects before approving the loan. Your current income, credit history, employment record, liabilities, assets, etc. will play vital roles in deciding your eligibility. So, learn about those requirements before beginning your house hunt and work on them to make the figures look impressive.

You will face less strict guidelines if you are a first-time homebuyer, a veteran, or are going to apply for a government-sponsored mortgage program.

What type of mortgage is it?

The loan can be of two types – fixed-rate and adjustable-rate mortgages (ARMs). The first one can range between 10 and 30 years, and its rate will be the same for the entire period. On the other hand, the other type offers a regular change of rates after an initial period.

An ARM might be a good choice if you don’t plan to live in the same house for your entire life. However, you have to ask the lender about the loan’s margin, the factors related to rate changes, and the interval of changing the rates to see if you can afford the calculated monthly installments.

What documents will I have to provide?

You need to keep some paperwork ready to speed up the whole process. The broker is likely to ask you to show the proofs of income and assets. The official papers that you have to submit are recent pay stubs, W-2 record, tax returns, bank statements, and more. Sometimes, you might be even required to show the proof that you are capable of paying the down payment and the closing costs.

What factors can affect the approval?

The lender may take more time in approving the loan if your financial status alters or is likely to change because of a personal affair. The determining factors, for example, could be a change in marital status, credit history, or your income. Avoid such a hassle by trying to keep the financing state unchanged until the sanction of the loan.

Don’t let the experience with the lender ruin your home buying journey. Have a good understating of your credit score, learn about the mortgage options, and prepare the right questions. You’ll surely find the rate you are expecting.

neighbors

Do Neighbors Matter When Selling a Home?

Most homeowners focus on preparing the home for listing and the open house at the time of selling. Well, it makes sense to give attention to the makeovers such as painting, cleaning, sprucing up the landscape, taking great photos, and more. However, the potential buyers will not only look at your house but also scrutinize the neighborhood. So, your neighbors are likely to be an instrumental in how quickly your home sells. Read More →

home buying

How Renters and Home Buyers will Fare in 2017?

The rise of mortgage rate at the end of 2016 and its volatile nature since the beginning of 2017 have changed many equations for the buyers and renters in the real estate market. The real estate database company Zillow has recently published an article predicting five factors for the people who are going to rent or have made the big decision of buying a home this year. Read More →

buyer's market

4 Tips for a Seller to Survival in a Booming Market

It’s tough to sell a house at the asking price if the inventory is high. When there’s no shortage of homes, buyers will just move to the next property in case the seller doesn’t accept their offer. However, it’s not that much difficult to sell a house quickly at a reasonable price. Read More →

home buying

4 Tactics to Follow When the Inventory Is Low

Buyers and real estate agents need to raise their game when trying to find a suitable house in a tight market. When there’s an inventory shortage, it’s hard to find starter homes for sale. These situations are frustrating because you scour through neighborhoods only to realize there’s not much to look at and see yourself losing out to other buyers despite making good offers. Read More →

security deposit

Home Inspection: The Ultimate Do’s and Don’ts

It’s standard procedure for every home buyers to inspect the property they are going to purchase. But, it is difficult for an inexperienced person to figure out what aspects of the property should be considered as standard what should be ticked off as warning signs. Even if you hire a home inspector, you have to know what questions you should ask him. Let’s take a look what to expect when you’re preparing for a home inspection. Read More →

security

The Questions to Ask to Get Your Security Deposit Back

Getting security deposit back is one of the main concerns of the renters as soon as they land a new apartment. Most people lose it because of their own mistakes, and others are mostly ignorant about how to deal with the process. We’ve already covered a piece on some tips about how to get it back or at least the most of it after your lease is over. Read More →