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Before you even start the home search, research is key. There are a few areas that you should look closely at in every home that you’re touring in order to make an informed decision about each property and your future in it.
Check The Foundation
When you’re walking around the home, note creaky floors, cracks in the walls, and water drainage issues. Maybe you won’t even be able to see if the foundation has any cracks in it or not with your own two eyes. A certified home inspector will, however, be able to tell you what is happening on the property. Cracks in the foundation or major foundational damage can be incredibly costly to you as a homeowner. You’re going to want to know about these issues ahead of time.
Do Some Investigating
Taking a walk around your desired neighborhood can give you a lot of valuable information. You may be able to talk to neighbors who will give you a bit of information about a property. Even wandering around the neighborhood or attending yard sales can help you to see what’s going on, if you can see yourself living there, and if there are any major issues that you should be aware of.
Sellers prefer to sell a home to a buyer who they like. if you see that you have something in common with the seller like the fact that you’re both veterans, you should send a letter along with your offer to let the seller know your connection. It’s also helpful to send an offer letter that lets the seller know how much you love the house and that you can see yourself living in the home. It never hurts to add a personal touch to a home offer.
Keep Your Options Open
Just because a home doesn’t consist of the modern decor you picture yourself living in, doesn’t mean it can’t be changed. If a home happens to be older with less present-day decor in it, be sure to keep an open mind as to the potential that the home has for you.
Make A Strategic Offer
We know that prices that end in 9 are a bit more attractive to the psyche than prices that end in a flat zero. If the asking price for a home is $310,000, you may be tempted to offer $320,000 to shell out the competition, but you may be better off offering an odd number like $312,000. Sometimes a small difference makes a big impact in the eyes of the buyer. Work with your realtor to see if a home you’re interested in has any other offers. Your agent can help you to find a good price point for your offer as well.
Buying a home is a probably the biggest purchase you’ll ever make. In an ideal world, you would take your time before making an offer, visiting several times and studying up on the town and the neighborhood.
These days, you need to act swiftly or someone else may swoop in on your dream home. So how can you get an accurate feel for a neighborhood?
Of course you should perform due diligence, checking crime rates and doing online research about schools and community events. But there's one very simple step you can take to uncover a fountain of immediate info:
Talk to the neighbors.
Although it might feel awkward to approach strangers before or after looking at a house, most people are willing to talk with prospective buyers.
If you see a neighbor outside, politely approach them, tell them you are considering buying the house for sale on the street and ask if they mind answering a couple of questions.
Not sure what to ask?
Here are seven insightful questions that will help you glean some useful info.
1. How would you describe the area, and what it's like living here?
This open-ended question allows neighbors to spill whatever comes to mind first — which most often is the things that they love (and dislike) the most about their neighborhood.
While real estate agents are limited in the information that they can disclose to you about a neighborhood, neighbors don't have such restrictions.
But keep in mind, if you disclose (or it’s evident) which house you're considering, there's always the chance that the neighbors are friendly with the seller, and loyalty could taint their response. And of course, people's perspectives can vary.
Focus on getting a good feel for the vibe of the neighborhood. To get a more accurate picture, try to ask several neighbors the same questions.
2. Do you consider this to be a safe neighborhood to live in?
This question allows you to get more detail about the feel of the neighborhood. You may want to ask if break-ins are common in the area. Is there a neighborhood watch program -- formal or informal? Do neighbors tend to keep an eye on each other's properties when they are out of town?
If you have children or like to take your dog for a walk, traffic patterns may also be of importance. Neighbors will be able to let you know if children can play or ride their bike in the street safely.
3. If you could change anything at all about the neighborhood, what would it be?
This question gives you an opportunity to ask about any drawbacks to the area, such as limited parking, barking dogs or other inconveniences that might become big annoyances if you purchase a home in the area.
4. Which school district is this neighborhood in, and are you happy with the school?
Schools should be a major concern, even if you don't have kids. A good school district usually translates into higher property values; potential buyers with children will want to be in the district with the most desirable schools.
You'll find lots of resources online to learn about school system ratings, but nothing beats hearing the personal experience of families who have kids enrolled in the local schools. And if you have kids, besure to ask the neighbors about any specific school programs that your children may need.
5. Is the neighborhood friendly ... do the neighbors socialize with each another?
Were you hoping for backyard barbecues and Sunday football game watch parties? Running partners and wine buddies? Do you prefer a peaceful vibe or are you looking for a lively social scene for you and your kids?
This question will help you determine whether you're a good fit for the neighborhood. Neighbors may share that there's not a neighborhood social scene, or that there are block parties and an open-door policy. You can learn more about the social scene for both your kids and yourselves.
6. Is there anything that I should be aware of with this property?
Once you’ve asked about the neighborhood vibe, it’stime to turn your attention to the specific home you're considering. Although sellers are legally required to disclose certain information, neighbors might be willing to dish more on the revealing things that weren't evident in the disclosure. If the property you are thinking of buying has run into some problems, then the neighbors would know all about it.
7. How long have you lived in the neighborhood?
Gaining an understanding of how long your potential neighbors have lived in the neighborhood provides you some insight. Neighbors who have been around for a while may be able to give you the back story of why the property is on the market, which is good intel for negotiation.
Homeowners that live in the same house for some time also tend to have a stronger sense of community and take pride in their home and their neighborhood. A well-kept neighborhood is in your best interest as it will impact the value of the house.
The next time you head to an open house, don't forget to set aside a few minutes to chat with the neighbors — what they say could cement your decision that this is the perfect place to live, or it could save you from making a big mistake.
Ready to enter the market? Call us 978.664.3700 -- we're here to help!
Applying for a mortgage can be a lengthy and difficult process. Lenders want to know that they are going to get a return on their investment.
To ensure that they’ll see that positive return they will take a number of things into consideration, such as your income, credit score, employment history, and financial capital.
First-time homeowners often struggle when it comes to these prerequisites since they have fewer years of numbers for lenders to consider. If you’re one of those people, don’t worry--you can still purchase a home.
First-time homeowner loans, which are guaranteed by the U.S. government, and a number of private loans enable people to borrow money for a home without paying a huge down payment or having a vast credit history.
One downfall of said loans is private mortgage insurance, or “PMI.”
In this article, we’re going to talk about what private mortgage insurance is, how to avoid it, and how to get rid of it.
What is PMI?
If you make a down payment on a mortgage that is less than 20% of the loan amount, you will most likely have to pay private mortgage insurance.
PMI exists as a way for lenders to help guarantee they won’t lose money off of your loan. If you make a down payment of 20% or more, then lenders are typically satisfied that they won’t lose money from doing business with you.
PMI is not to be confused with home insurance, which protects you against damage and theft. Rather, it is an additional fee you’ll pay to your lender each month that is added to your mortgage payment.
PMI is calculated based on a few considerations. Lenders will take into account your down payment amount, the value of the mortgage, and your credit score.
In terms of costs, PMI typically costs between .5 and 1% of the total mortgage amount each year.
Naturally, it’s best to avoid paying private mortgage insurance altogether. Private mortgage insurance has no future value for you and your family since it doesn’t count towards building equity and doesn’t protect you from any potential financial harm (your lender is the sole beneficiary of PMI).
Saving for a down payment can take time, and sometimes you’ll need to rent or cut costs while you save. However, if you do take on a loan with PMI, you can still cancel it at a later point.
Canceling your private mortgage insurance
The first thing you should know about canceling PMI is that it usually isn’t easy. You’ll need pay off at least 20% of the home, write a letter to your lender, and wait for an appraisal of the home. Once you’ve done this, you still have to wait while your lender considers your request. In all, this process could take months--months that you’re still required to pay PMI.
Once common way to get out of PMI is to refinance. If the value of your home has increased since the time of you taking on the loan, the new lender likely won’t require PMI. However, you’ll want to make sure that refinancing will get you a lower interest rate and cover the costs of refinancing.