Buying a home is increasingly a multigenerational family affair. Four in 10 parents recently surveyed said they expect to help their children buy a home. That’s more than double the percentage of parents who themselves got help from their parents when they bought their first home.
Home prices that have been rising faster than wages, combined with burdensome levels of student debt, are fueling this trend. Moreover, helping with homeownership is a here-and-now assist that can transform a child’s financial life, rather than waiting to bequeath money down the line.
Whether you are the Bank of Mom and Dad or the adult child eager to buy, a successful intra-family deal requires careful consideration of the various options:
Can you afford it?...
When you’re buying a home, one of the worst possible scenarios is a dream house that turns out to be a lemon. While the term usually refers to a home that looks great but is hiding some internal, serious flaws, there are actually red flags you can watch out for—that will show up way before you even get to an inspection.
Signs of Mold or Water Damage
Use your eyes and nose to check for these environmental issues. Water damage may reveal itself in stains, in damaged wood or flooring and walls that are collapsing. Obvious mold can also be seen by a simple visual inspection, but your nose can detect it even if it’s hidden. Mold isn’t just unsightly—it can cause health issues like asthma, especially in kids.
This is a classic,...
Congratulations on your new home! You survived the paperwork. You got all your belongings moved in and everything unpacked. You even got a lawnmower, some power tools and a massive tool chest. Now what?
Many new homeowners don’t even think about home maintenance until something breaks, but that’s not the best way to take care of your new home. Here are some tips to help you protect your investment and keep your property in good shape for years to come:
Set a Maintenance Schedule
A good place to start is by following a home maintenance schedule. Just as your car needs to have an oil change and checkup regularly, your home and yard will need some regular maintenance, as well.
If you bought new appliances, make sure you send in your warranties and keep...
For $600 or so a year, plus a service fee of around $75 every time you ask for repair, a home warranty can be an inexpensive way to have peace of mind as a new homeowner.
Home warranties cover breakdowns in a home, from HVAC systems to appliances. A broken water heater can be repaired within hours, but if it can’t be fixed, a home warranty can pay for a new one to be installed.
For homeowners with an older house, they may want more things covered than a newer home would need—such as older appliances—and will likely pay more for it. If you just bought new appliances and have a manufacturer’s warranty for a year or more, you won’t need this coverage. You may be able to exclude new appliances from a home warranty to cut down on costs.
Things that can be covered by a home warranty include...
Buying your first home is full of challenges you’ve probably never faced before, and they go well beyond finding a home you like.
Here are some mistakes to avoid as a first-time homebuyer:
Not considering costs beyond the mortgage. Knowing that you can afford the monthly mortgage payment is important when deciding if you can buy a home, but don’t forget to factor in the other costs that can add to your monthly bills.
These include property insurance, property taxes (which can go up every year), maintenance, and higher electric and water bills. Some homes also have homeowners association (HOA) fees that need to be paid.
Shopping for a loan after you find a home. Searching for a home can be fun, but it isn’t where you want to start as a first-time...
Co-owning a property—for example, owning in partnership with a friend, family member or other acquaintance—is gaining popularity. Rising purchase prices have encouraged this, but the truth is, co-owning an investment property has many benefits. Not only do you have other people to share responsibilities and upkeep with, but splitting the costs makes investing in real estate a much more attainable goal for some people.
That being said, just like any business relationship, you need to set some boundaries and have a strategy in place first. Here are some things you should consider:
What is your end goal? There is more than one way to make money from an income property, but you both need to be on the same page in terms of strategy. Some people opt to renovate and sell in a relatively short timeframe, effectively...
For many aspiring homeowners, finding an undervalued property, gutting it and turning it into the upscale home of their dreams is, well, a dream. Flipping a property, however, is a large-scale undertaking that’s not for the faint of heart! Here’s how to make sure the property you buy is a good option for a flip.
Opt for a smaller property. Flipping a home is not an easy job, so a small home in a great location is often the best bet. This also makes it more likely that when the home is finished, it won’t surpass the neighbourhood value, which can make it difficult to sell.
Focus on the structure, not the aesthetics. If you’re about to rip a property down to the studs, things like exterior siding or outdated kitchen features won’t...
Most people who want to purchase a house can’t afford to pay cash and therefore need to take out a mortgage. The type of loan you choose will depend on your financial circumstances and plans and can have a significant impact on your monthly costs, so it’s essential to understand all your options.
Government or Conventional?
The federal government administers several programs to help homebuyers in specific circumstances. The Federal Housing Administration offers loans with down payments as low as 3.5 percent for first-time buyers. The U.S. Department of Veterans Affairs provides loans for current and former servicemembers that require little or no money down. The U.S. Department of Agriculture offers loans for people to purchase homes in rural areas.
If you don’t...
City, town and county governments assess property taxes to fund public goods, such as schools, road repairs, and police and fire departments. In some areas, homeowners pay taxes to the city or county, as well as separate bills for schools, water and sewer services. If you’re looking for a new house, be sure to take property taxes into consideration so you don’t go over budget. If you failed to pay your property taxes, the local government could take possession of your home to cover the debt.
How Are Property Taxes Calculated?
Property taxes are determined by multiplying a property’s assessed value by the local tax rate. The assessed value is generally less than the purchase price or appraised value. Local tax rates vary depending on several factors.