If you are moving and are interested in buying a home for yourself, there are many ways in which you can grab a bargain on your new home. Builders these days offer bargains to new homebuyers that get them fabulous discounts, mostly on ?quick move in? or ?spec? homes. Depending on the area and the builder/realtor, you may find discounts ranging from a few hundred dollars to tens of thousands of dollars. Some homes have bargains that can fetch you a discount up to $50,000; sometimes even more. Others offer bargains like a free gourmet kitchen, basement, or a solarium with the purchase of your new home. There are still be others that offer a range of branded consumer durable sets like, refrigerators, cook tops, kitchen hoods, dishwashers, washing machines etc with the home.
Many times, cash incentives are offered through these builders s that can be adjusted as per the liking of the homebuyer against closing costs, moving costs, upgrades or furniture gift certificates. You can also use these cash incentives to buy down your interest rate on your loan to make your monthly payment more affordable. Some companies offer trade in of your old home and pay you the market price less a sales commission and allow you to stay in your old home till the new one is completed and you are able to move in. This bargain offer saves you the hassles of selling your old home and lets you be stress free as you move to the new location. Not only does it save you the hassle of moving twice, but it also saves on the cost of moving twice as well which can easily add up to thousands of dollars.
You can also make a bargain purchase of a home if you stick to certain criteria for the purchase. The first thing would be to keep your expectation of price appreciation within realistic limits. Do not expect prices to skyrocket in the next year or so. If you intend to stay in the house for a long time and the price appreciation sets off your closing costs, real estate commissions and lender fees etc, it is a bargain for you! These can total to more than ten percent of the purchase price. Make sure that your mortgage payments are affordable. This will give you tremendous peace of mind and will also provide you with tax breaks that would make home ownership very attractive and a bargain indeed.
You can also make a bargain purchase if you manage to locate a lender who offers a mortgage with no down payment or very little down payment. This allows you to obtain a larger mortgage and full tax benefits, as property taxes and mortgage interest are fully deductible from both federal and state income tax. Although this is getting harder and harder to find these days, these loans do still exist and FHA loans still only require a 3% down payment.
Being vigilant and doing a bit of research can enable you to make a bargain purchase as you go about acquiring a new home for yourself.
During the real estate boom in the early 2000's home buyers were getting approved for mortgage loans without having to put money down on the loan. It seems like a great idea, right? You get into a brand new home and it costs you absolutely nothing and in some cases you might even get money. Builders were having incredible sales and giving incredible incentives to all new home buyers. Then the housing crisis hit and lenders quickly began to change lending practices.
Even with a strong credit report the no money down option is not the best choice any new home shopper. The reason is that after a few months the monthly payment will increase to where it is suppose to be. Once this happens most people find themselves in a state of regret or buyers remorse. There are some major benefits to putting money down on the purchase of a home.
One of the biggest advantages to having money to put down is that by doing this you will receive a lower interest rate which will significantly reduce the amount of money you owe for the house. In the past lenders would usually require at the very least 20% down to get the loan approved. Most have got rid of the programs that let buyers into a home without having to put money down. I have heard of private lending of a little over 100% to cover the closing cost of the home. One major drawback of a private loan is the private mortgage insurance that is required to get approved can be costly.
Freddie Mac and Fannie Mae are two financial organizations who provide loans specifically to first time home buyers. These loans are typically require a down payment but can be less than the normal 20%. Loans from Freddie or Fannie typically ask for only 3%, on the down side you end up paying more for the home in the long run.
The one thing you should take from this article if you are thinking about purchasing your first or third home is that the more money you have for a down payment the lower the amount you actually be paying in total for the home.
Both Michael E Taylor & Paul Escobedo are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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