Stairway To Security: Home-Buying Advice

The process of home buying is one we all have to go through at some point in our lives. It certainly is a lot more difficult now due to the economy, and there are other things you may wish to consider before entering into the home buying market, but as you may discover, it is not a straightforward process. This is why it is worth asking yourself some key questions before you enter into this arena.

What sort of home is suited to your needs?

When entering into home buying, you need to consider if the home you have your eye on is suited to your long-term plans. Do you plan on having children, and if so, will there be enough room for them to grow up, learn to walk, etc.? Many people underestimate this step and think that getting on the property ladder is enough, but find themselves living in a cramped space and getting on each other’s nerves!

Do you need specific features for this home?

From the internal features, such as the bathroom and kitchen, all the way through to the neighborhood itself, you need to be sure of what you are entering into. This will be the biggest purchase of your life, and you need to be sure that it caters to everyone’s needs. By the same token, there needs to be some flexibility here because nothing is perfect, and you could be chasing a rainbow for years on end!

How much can you afford?

A massive question to ask. This breaks down into two parts, firstly how much will a lender be willing to lend you, and how much can you feasibly afford to make sure that you can afford everything else without bankrupting yourself to get the monthly payments in. Lenders will take into account everything, from your outgoings to debt to your earnings, and will decide what you are actually good for. Likewise, you may want to look at the total costs, so this will include the property taxes, the neighborhood costs and how much down payment you can physically afford. The bigger the down payment, the less the repayments will be. But you need to be ruthless in your assessment of your own outgoings.  

Who will help you through the process?

The whole house buying process is a minefield. There are hidden fees and the worry that the estate agents you have chosen are “good enough” as well as the whole financial concerns you will have yourself throughout the process. There is advice available on certain parts of the buying process that you may not be aware of at http://www.skyfiveproperties.com/blog/escrow-process-earnest-money-closing. And with a better understanding of the whole structure, you are better equipped to ask the right questions. It can feel like you are being led blindly, but this is where your own research comes in handy too. You know what you want out of your own home, and so you should know the fine details.

It is a big task, but it is one that is worth your time, effort, and research. The goal is to build a home for your future, so make sure that it is a good one!

The Big Benefits Of Owning An Income Property

If you are looking for ways to invest your hard earned cash then look no further than an income property. If you haven’t heard of this type of investment before, an income property is a property that is bought or developed for the single purpose of earning an income. Of course, as with every investment out there, you must make sure you understand the risks attached. However, for every risk, there is a benefit, and we are going to talk you through the major benefits of investing in an income property.

You’re The Boss

There is no greater feeling than being your own boss, and that is exactly what you’ll become when you invest in an income property. You’ll get to choose which type of property to invest in, who your tenant will be, how much rent you are going to charge and whether you will manage it yourself or hire and agency. This freedom and a boss-like feeling are not achievable with a lot of other investments. Take stocks or funds for example. Sure, you can choose which to invest in and how much you’ll invest, but you won’t have the chance to control or manage it.

Big Old Tax Write-Offs

As the owner of an income property, you are entitled to huge tax deductions. Of course, we recommend you speak to a professional accountant that specializes in this area of business, someone who can educate you on the best ways to save money on your property taxes. But to give you a brief understanding, you will be able to write-off your mortgage, as well as any credit card payments you made on home improvements. You can also write-off any insurance, maintenance, travel costs, legal and professional fees. What’s more, that is only the tip of the iceberg, but your accountant will be able to explain the full extent of the tax benefits available in this area of investment.

It Will Give You Some More Pocket Money

The whole point of having an income property is to generate an income, which means having tenants occupy it for an agreed rental price. Of course, it is as simple as taking away mortgage payments from your rental fee and keeping what is left, which because there are associated costs with having a property, such as maintenance costs and potential periods of vacancy. But let’s say you had an income property that you were renting out for $1000 a month, and your mortgage repayments were $600, you won’t be keeping $400. That is because roughly 10% of that $1000 dollars will be required to cover maintenance and vacancy, as such you will be left with around $280 a month. But this accounts for over $3000 a year, and your mortgage is getting paid off.

Appreciation Is Awesome

This has to be one of the greatest things about property because, if you get it right, you can see your property appreciate so much it will be like having a second income. It could be that you buy at the right time – when the market is low – or in an area that suddenly sees a huge amount of infrastructure get upgraded. There are so many factors that can have an affect, from transport links to schools, all of which will see your property rocket in price. Of course, it can go the other way too, as we saw in 2007 and 2008 when the entire economy collapsed and house prices plummeted. So make sure you do your homework first.

5 Tricks to Paying Off Your Mortgage Faster

With these tricks it’s easier to pay your mortgage faster than you ever thought possible! We’re sharing everything you need to know to get it paid off early.

We all dream of the day when we have officially paid off a mortgage and we officially own our own home.

It may, therefore, be music to your ears to learn there are some handy tricks to help you quickly pay off a mortgage.

1. Overpayments

One of the best ways to quickly pay off a mortgage is by making overpayments each month.

Many people make overpayments to shave years off their mortgage repayments, whilst reducing the amount of interest to pay on a property.

So, not only will you own your home at a much faster rate, but you will save money, too.

If you would like to identify how much money you could save on the property, you can use a loan repayment calculator to identify how many repayments you will be required to make when making overpayments.

2. A 20% Deposit

If a homeowner borrows more than 80% from the lender, they will be required to pay private mortgage insurance.

The insurance is approximately 1-5% of the loan, so can increase the length of your mortgage.

So, if you want to quickly pay off a mortgage and avoid private mortgage insurance, it is recommended to put down a 20% deposit on a property.

If you cannot afford a 20% deposit, it might be worth considering purchasing a lower-priced property.

If you currently own your own home and want to avoid paying private mortgage insurance, it might be worth overpaying on your mortgage to ensure it drops below the 80% line.

However, it is important to note that this is only possible if you have a credit score of 700 or higher.

3. Boost Your Savings

If you want to purchase a property sooner rather than later, you should try to be economical with your finances.

For example, you should aim to reduce your expenditure by purchasing items you need, over the items you want.

Combine the money savings with an increase in earnings, and the house could be officially yours before you know it.

To boost your savings:

  • Ask your boss for a pay raise
  • Monetize a hobby
  • Open a high-interest savings account
  • Skip the daily coffee purchase
  • Pack your own lunch
  • Cut back a cable package
  • Change insurance providers

4. A 15-Year Mortgage

There is a big difference between a 15-year and 30-year mortgage.

While a 15-year mortgage will cost you significantly more than a 30-year mortgage each month, it will also ensure your home will be yours in just over a decade.

Another benefit of a 15-year mortgage is that you will pay less interest on a property, so the house will actually cost you less than the 30-year alternative.

5. One-Off Lump Sum

If you cannot afford to make overpayments each month, you should at least attempt to pay a one-off lump sum when possible.

So, if you suddenly receive an influx of cash, such as a workplace bonus or inheritance, use the money to pay off your mortgage.

The money could ensure your home is yours sooner than expected, even if it is just by a few months.

By actively taking steps to pay off a mortgage, you can guarantee the property will officially be your own at a much faster rate, and you will remove the biggest monthly expense from your outgoings.

Now that you’ve learned these helpful tricks, you’re armed with the information you need to pay your mortgage off faster!