Five Tips to Buyng A Second Home
Many new home buyers in Vermont are second home buyers, buying a vacation home. Vermont seasons have something for everyone…terrific skiing in the winter, perfect maple syrup making weather in the spring, warm days and cooler mountain evenings in the summer, and gorgeous foliage in the fall.
Purchasing a Vermont vacation home is an exciting venture, but there are some things to think about that are different than when you purchased your primary residence.
1. What is the travel time between your primary home and the second home location? Is it a doable drive or travel distance, or will it become a deterrent to actually enjoying your vacation home?
2. What type of activities does the vacation home location offer and are these activities of interest to you? It is a good idea to visit the vacation home location at various times of the year to get a better idea of what the area is really like.
3. If you are financing your vacation home, interest rates are generally higher and down payments larger. I am glad to put you in touch with a local lender for you to talk loans with.
4. The interest paid on the mortgage for your vacation home is tax deductible, if you don’t rent it out for more than two weeks a year. But unlike your primary residence, the profit you make from the sale of the property is subject to capital gains. One way around capital gains is to sell your primary residence, move into your vacation home and live there for two years before you sell it.
5. Insurance is another consideration. Homeowners insurance in a vacation home is usually higher than on your primary residence because it is vacant for much of the time.
One of the best recommendations I have for you is to get the assistance of a well qualified Realtor who knows the area who has lived in the area for awhile. If you are thinking of buying southern Vermont vacation home, I’m your Realtor!! Give me a call at 800-659-1819 # 103 or visit my website. I am a long time resident of Vermont and a long time Realtor. I’d love to help you buy your dream Vermont vacation home!
Saving The Down Payment For Your Vermont Home
Foreclosures are on the rise. Lenders are tightening their belts and their lending practices. No money down loan programs are becoming harder to find, which means Vermont home buyers need to have money available for a down payment. Here are some tips on how to come up with the down payment.
1. Ask for help.
Ask relatives if they would be willing to contribute to your down payment or give you a no interest loan with no repayment time frame.
2. Borrow from your life insurance.
If your life insurance has built up value, you can borrow against it. this does not count as a debt because you are borrowing from yourself.
3. Borrow from your IRA.
First-time home buyers can take $10,000 for an IRA to put toward a home purchase, penalty free.
4. Increase your income.
Get a second job and stash or do free lance work.
5. Change your withholding taxes.
This will give you more take-home pay, which you can start saving!
6. Consider government backed loans.
VA and FHA loans require lower down payments and there are many state loan programs available.
For more information on how to save your down payment and the Vermont home buying process, visit my website or give me a call at 800-659-1819 #103 for more personal service.
Ludlow Home Buyers Can Now Finance Repairs
Vermont Housing Finance Agency (VHFA) has made it easier for home buyers purchasing a rehab to borrow the money for needed repairs.
For mortgage loans that close on or after Feb. 1, 2007, VHFA will now allow the total cost of repairs to be included in the mortgage loan as long as those costs do not exceed the lesser of $25,000 or 25 percent of the purchase price which must include a 10 percent contingency. For loans that meet specific requirements, VHFA will purchase loans from lenders with an outstanding escrow for those repairs.
Eligible repair items include: items to complete the property, increase living space, construct a garage (maximum two-car), correct structural issues, bring property up to building codes or standards, correct or add needed safety features, repair or modernize mechanical and/or plumbing systems or fixtures and to repair or improve internal or external surfaces.
Contact me for more information on this program at 800-659-1819 #103
To Buy Or Not To Buy?
In a slowing real estate market, buyers often ask is it better to buy now with low interest rates or is it better to wait and see if prices will drop. If I had a crystal ball and could tell you this, I would probably be retired on a tropical island somewhere, but I can give you a couple of insights.
Interest rates have been hovering around 6.5 percent for over a year and there are no indications that this will change any time soon. The minor fluctuations in rates we have been seeing don’t really effect your payment much.
Say you have a loan for $100,000. At 6.5 percent the payment on a 30-year fixed rate loan is $650. If the interest rate drops by 0.5 percent it only brings your monthly payment down $5.00. You would have to see a dramatic drop (or increase) in rates for it too effect your pocket book.
Will housing prices drop? The National Association of Realtors is predicting a rising market throughout 2007. Also, it is almost March and spring is the busiest time of year in real estate. Historically, prices increase in the spring which means gambling on a drop in prices may not be a great gamble.
Confused? Give me a call at 800-659-1819 #103. I am glad to discuss this with you further. Or visit my website. Here you can view all Ludlow, VT homes for sale.
Buyers Have More Buying Power
Home buyers acquired more buying power with the recent changes in 100 percent loan guidelines.
The guidelines for 80/20 and 75/25 Conforming Fixed-Rate loans now allow seller contributions up to 6 percent of the sales price or appraised value, whichever is less. Previous guidelines allowed only 3 percent contributions.
Now it’s easier to purchase the new home you deserve! Are you thinking of buying an Okemo Mountain home? Visit my website to view all real estate listings.
Risks Of Home Ownership
It is often said the American Dream is owning your own home. But, is it right for you? There are risks involved and understanding these will help you make a good decision for you and your family.
1. Increase in monthly housing expenses. Taxes and insurance costs related to your home are sure to increase overtime, but usually these increases are off set by tax advantages and a pride of ownership.
2. You are your own landlord. No more calling the landlord when something breaks down. Maintenance and upkeep are yours. but, youo can also decorate anyway you want!
3. You must sell to move. No picking up and moving with a 30 day notice. You must plan ahead and give enough lead time to get your home sold before relocating. However, you benefit from the equity buildup since you first purchased your home.
4. Property values can go down. Over the long term real estate appreciates, but markets are cyclical and in the short term there is a possibility for your home’s value to go down. Take into consideration how long you will live in the home prior to deciding to buy a home.
If you would like to discuss if buying a home is the right decision for you, contact me. I’m glad to help. Also, visit my website to search all Vermont real estate listings.
What The Fed Said – A Translation
If you are one of those people who keeps an eye on interest rates and the stock market, and listens intently to what happens on Wall Street and with Federal Reserve, you will appreciate the post on BankRate.com, What the Fed said: A Fed translation.
No need to learn Fedspeak, it has been translated for you!
Tags: bankrate.com, federal reserve, interest rates
What Is Earnest Money?
In medieval days, a father would send an entire herd of cattle as a not-too-subtle hint that his daughter be married into a certain family. Nowadays, when you’ve decided a particular home is “the one” for you, you can, thankfully, leave the cattle at home. You are asked, however, to deposit a small percentage of the sales price of the home you want to purchase–it’s called “earnest money.
“Your earnest money is a good faith deposit that accompanies your offer. It is usually a personal check, but a short-term promissory note is sometimes acceptable. A sizeable earnest money deposit indicates financial strength and assures the seller of your commitment to purchase the property.
Once your offer is accepted, your earnest money check is cashed and deposited with the title company, attorney or with the listing broker. Your funds are held in a separate trust account reserved only for earnest money deposits. In most cases, everything proceeds smoothly to the closing day when the total amount of your earnest money is credited to you as a portion of your down payment.
Your earnest money is totally refundable if the offer is not accepted or if some condition in the contract is not satisfied. For example, your earnest money is refundable if financing is not approved with the terms specified in the contract.
If you’re thinking of buying a home in Vermont, give me a call or visit my website., were you can view all real estate listings, get the current market value of your home and more. It would be a pleasure to assist you in finding “the one” that you’d like to call “home.” My knowledge of today’s real estate market will aid you in making wise decisions in every step of your transaction.
Tags: earnest money, vermont real estate, vermont market values
30 Year Mortgage Rates Drop Again
Vermont 30-year fixed mortgage rates drop for 5th consecutive week.
BankRate.com is reporting a drop in mortgage rates for the 5th consecutive week. Rates are now the lowest they have been since the end of March. The gap is narrowing between the fixed-rate and adjustable-rate mortgages, making refinancing a sensible option for many homeowners.
If you are thinking of buying a Vermont home and would like to learn more about interest rates and how they effect your buying power, contact me or visit my website. I’m here to help!
Tags: BankRate.com reports drop in interest rates, buy a home in Vermont, buying power
First Time Buyers are Picky, Picky, Picky!
Wells Fargo Home Mortgage has just revealed a study of first-time home buyers and just what they are willing or not willing to compromise on when buying a home.
Both buyers and sellers may want to take note of the findings:
40% are unwilling to buy a home smaller than the’d like.
40% are unwilling to buy a home needing significant improvements.
46% will not buy further from work than they would like.
70% will not move to a less desirable neighborhood.
97% of first-time home buyers would never go back to renting.
77% believe buying their home is the best investment they ever made.
Nearly 75% of first-time buyers believe that the value of their home will go up in 2006.
78% of renters believe that it is generally true that people cannot obtain mortgages without perfect credit, and 52% of renters believe that they personally can’t get a mortgage because of credit issues. But 46% of the first-time buyers surveyed didn’t believe their credit was “excellent” or even “very good.”
56% of renters believe that a downpayment of 15 percent or more is required when buying a home, and 55% believe that size of a downpayment is a personal barrier for them. But 74%reported they put less than 15 percent down.
I believe “picky” is a good thing. Buying a home is the largest investment most of us make and it needs to be right for you. Contact me, or visit my website, if you are thinking about buying a home near Okemo Mountain in Vermont. I am glad to work with “picky” buyers!