If you’re in the market for a new house but don’t like your financing options, you may be happy to hear that there are other, less conventional means that can help you make a purchase. Traditional financing may suit the needs of most buyers, but it’s not the only way to go. Check out the following homebuying “hacks” if you’re looking for a different kind of deal.
Most homebuyers get qualified for financing ahead of time and end up spending every penny of that amount. However, sometimes it makes sense to spend less instead of reaching for the top rung of the ladder. Don’t forget that houses almost always cost more than their list price due to wear and tear, ongoing maintenance, emergencies, etc. Maxing out your monthly mortgage budget can come back to bite you (and it often does). Pay less than you can afford and you’ll be in a better position to handle the ongoing expense of home ownership.
Of course, that doesn’t mean you have to settle for a run-down property that requires a lot of work. Be patient and watch for a house that’s been on the market for a long time, one that’s in an area where you want to live. You may find a property that’s not getting a lot of attention for a reason you could live with (like not enough yard space, or no attached garage). Getting a house for less means you’ll be better able to afford any necessary upgrades later on.
People who live in desirable destinations, such as San Francisco or Anaheim, have a unique opportunity to offset the cost of homeownership. One option is to rent out a room — or rooms — in your house to vacationers looking for a good deal on accommodations located near attractions. For example, Turnkey points out that vacationers will often gravitate to rental properties located near popular destinations such as the beach, Disneyland, and Knott’s Berry Farm. You can then take this income and put it toward the mortgage payment or to make improvements that will increase your home’s value. Online rental platforms are excellent business tools because they promote your house to vacation renters and help you earn extra income.
It used to be a hard-and-fast rule of real estate that buyers need to come up with a 20 percent down payment. But let’s face it: 20 percent is a huge chunk of change for a lot of people — it can be out of the question for first-time buyers. Do your research and find out the average down payment in your community. You might be able to get the deal you want by putting down less.
Don’t give up on buying a home because you can’t come up with a down payment. There are loan options through the US Department of Agriculture, the Federal Housing Administration, and the Veterans Administration, which offer no-down-payment, or low-down-payment, mortgages if your credit number is at least 500.
Did you know that you can share home equity with an investor? It works like this: You and your partner investor combine forces and put down a healthy down payment, and you live in the property for an agreed-upon number of years. At the end of that period, you either buy your partner out or sell the property and split the profits. Of course, equity sharing means you’re not the sole owner, but it does give you added financial clout up front.
Sometimes, broadening your financial perspective can bring the property you want within your grasp. Financing through traditional means can restrict your options or saddle you with a mortgage that’s beyond your means, so explore other avenues available to you.
Image courtesy of Pixabay
Are you thinking of renting out your home? In that case, you need to ask these 10 questions to anyone wanting to rent your house:
1. When are you planning to move in?
This is the question that shapes the rest of your engagement with the potential tenant. The answer here will help you determine whether or not the tenant’s timelines synchronize with yours. If, for example, a tenant wants to move in a month from now but you want to rent it out sooner than that, then there is no point in engaging the person any further.
2. Why are you relocating?
If the tenant is moving into your property after falling out with their previous landlord, you need to know what led to the fallout. Was it because of dishonoring their rent obligations? Was it because of neglecting their other tenant responsibilities as per the lease agreement? The answers they give will tell you whether or not to let them rent your property. In the same vein, ask them how long they have lived in the previous apartment and how long they intend to live in yours. If you establish that they have a habit of hopping from one apartment to another within unreasonably short durations, politely decline their application.
3. Have you ever been evicted for any reason?
This question seeks to clarify the #2 question even further. Maybe they weren’t evicted in their immediate former home, but you cannot conclude that they have never been evicted in the past. Ensure that they give you sufficient details about their journey since they started renting.
4. How stable are you financially?
If they are unstable, chances are that they will give you problems with the rent. Experts say that a good tenant is the one whose monthly rent doesn’t exceed 40% of their total monthly earnings. That is to say that if you expect the tenant to pay $1000 in monthly rent, they should be earning at least $2500 per month. And because monthly income isn’t a perfect indicator of financial stability, make a point of running a credit check to determine how much debt the tenant is in. If your new tenant is in the Gig economy, you might want to ask more questions if they are financially stable.
5. How many people will you be living with?
The last thing you want is to rent your house out to an individual, only to realize later that he brought in his extended family and some of his friends to live with him. There is nothing wrong with housing a needy friend or relative, except that more people mean more wear and tear to your property. Besides, overcrowding in homes is listed by most fire departments and health professionals as a major health and safety risk.
6. Do you own any pets or support animals?
If yes, how many do you have? This is important to know if you have a renting policy that doesn’t allow pet ownership. If you have a set monthly/annual deposit for pets or a limit as to how many pets a tenant can have, make it clear to them beforehand.
7. How clean is your criminal record?
As a tenant’s credit history is significant to your property’s financial future, so is their criminal history to your - as well as your other tenants' - security. Don’t underestimate the number of ex-convicts looking for rental homes in the US today. In 2015, a tenant screening by SmartMove showed that at least 22% of all tenants-to-be had a criminal record. Even if you don’t have a problem renting out to an ex-convict, having this information with you is necessary when planning your rental unit's overall security.
8. Are you prepared to pay all moving costs upfront?
Some landlords require tenants to pay a security deposit, one month rent deposit, and first month rent in full upon signing the lease. If you are such a tenant, or if there are other moving costs attached to your house, then let the tenant know beforehand.
9. What kind of a neighbor can you describe yourself as?
A new tenant can be so unruly that they force their neighbors to end their lease earlier than intended. If they like to play loud music or bring home too many friends, you need to know so that you can append a rule within the lease that will keep their unruly behavior in check.
10. Do you have any follow-up questions?
This sounds obvious but it is very important. You need the tenant as much as they need your property, so you will be wrong not to give them the chance to ask you the follow-up questions they could have. This presents you with the opportunity to appeal to the tenant.
It’s that time again!! Tax time, that is! As people everywhere are grumbling about the hefty task of filing taxes, there are a few of us that are in a position to get a nice sized tax refund check from the IRS. While the hopes of getting caught up on bills, buying a new car or house, or taking that much needed vacation become reality and fill the minds of many, are we making the best use of our funds? We spoke with several of Charlotte’s leading professionals in the finance industry, including mortgage brokers, tax and financial advisors and accountants, to answer that very questions, and here’s what we found...
According to Charlotte’s leading financial professionals, here are some ways you may want to consider allocating your money:
1. Emergency Fund: Whether you are bulking up your existing emergency fund or starting a brand new one, this is top of the list for all financial advisors. Life happens! Be prepared for unforeseen circumstances could be the difference between staying above water and drowning in a growing pile of debt.
2. Debt Payoff: We aren’t talking about any and all debt though! It seems to be the consensus that you should focus on outstanding credit cards and revolving debt.
3. Invest In Something With ROI: Start your own scalable business, or purchase one already existing! Also, we can’t count out the stock market, municipal bonds, and CDs, all ways to allow your money to work for you!
4. Purchase Home/Invest in Real Estate: Put aside the money for a down payment for your first home, or an investment property.
5. Make Payment on Large Ticket Bill: This can be making an annual payment towards protective services, such as life and auto insurance; or getting ahead on a large monthly bill that makes you sweat, like rent/mortgage or car note.
5. Credit Repair; if needed: use a professional (important) to work on your credit profile. Credit controls cash flow. With good credit you save on ridiculous interest rates and put yourself in a great position to makes moves towards financial independence.
6. Spend on Yourself!: YOU are an investment! Make sure you are taking the time out for self-care. Mental health is vital, especially when working hard and making sacrifices that don’t show rewards immediately. This will keep you fresh and rejuvenated moving forward. This could mean visiting a therapist, enjoying a deep tissue massage, or, yes, taking that much needed vacation!
Regardless of how you decided to allocate your money, make sure you have a plan. Most importantly, speak to a financial advisor or professional to see where you can actually maximize your efforts. There’s no wrong answer to this question, unless of course your answer doesn’t create a better position for you, your family or future financial security.
Special thanks goes to those individuals that contributed to this post: Candace Millner, Eleazar Graham, Tomeka Purcell, Tony Proctor, Greg Cooley, Vincio Chavez, Brandie Jackson, and Cearra Friday.
As the new year rings in new resolutions, motivations, and goals, many of us are considering selling our home in the upcoming year or simply giving our home a much needed face lift. But the question is, which updates and renovations will give us a healthy return on investment (ROI) and/or give us the best possibility for a quick sale at maximum profit?
The following updates will give you the biggest bang for your buck and get your home in tip-top condition for sale, making it more desirable to potential buyers.
1. Fresh Paint: A fresh coat of paint can do wonders. Consider sticking to neutral colors such as grey, white, charcoal, beige or light blue.
2. Update Flooring: Rip up old carpet, refinish hardwoods, and replace worn vinyl or linoleum.
3. Small Bathroom Uplift: Upgrade hardware, replace vanity, and re-caulk around the tub, shower and sink.
4. Energy Efficient Updates: Adding insulation, replacing appliances, and replacing windows.
5. Declutter: Pack up items that ‘personalize’ your home and things that you won’t need or use while your house is on the market. You want buyers to be able to visualize themselves in your home.
6. Curb Appeal: A little landscaping can go a long way. Along with flowers, bushes and lawn maintenance, considering a new front door with a spruce of color (that matches!) to attract buyers.
According to the Remodeling 2019 Cost Vs Value Report*, whether you plan to sell soon or stay in your home a little longer, the following renovations will give you the highest return on investment in the greater Charlotte market:
*© 2019 Hanley Wood Media Inc. Complete data from the Remodeling 2019 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.
If you are thinking about selling your home or doing renovations, you should contact your favorite real estate professional to discuss what would be the best options for your particular market and situation.