- Can you negotiate the
price on new homes?
It can be difficult to
negotiate the sales price with a developer because they may claim their prices are based
on fixed construction costs. But it doesn't hurt to try.
Experts say builders more likely to be flexible on price at
the very beginning and the very end of a development project. Early on, most developers
want to move people in quickly so the project picks up momentum. Later, developers may be
more inclined to accept lower offers when only a few units remain.
If negotiating the price doesn't work, buyers commonly
negotiate for better amenities (upgrade carpet, light fixtures, etc.) or lot location.
Experts say a developer will rarely pass up a deal over a couple hundred dollars' worth of
carpeting, for example.
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- Do sellers have to
disclose the terms of other offers?
According to
experts, sellers do not have to disclose other offers.
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- Can I get a HUD home for as
little as $100 down?
If you are strapped for cash
and looking for a bargain, you may be able to buy a foreclosure property acquired by the
U.S. Department of Housing and Urban Development for as little as $100 down.
With HUD foreclosures, down payments vary depending on
whether the property is eligible for FHA insurance. If not, payments range from 5 to 20
percent. But when the property is FHA-insured, the down payment can go much lower.
Each offer must be accompanied by an "earnest
money" deposit equal to 5 percent of the bid price, not to exceed $2,000 but not less
than $500.
The U.S. Department of Veterans Affairs also offers
foreclosure properties which can be purchased directly from the VA often well below market
value and with a down payment amount as low as 2 percent for owner-occupants. Investors
may be required to pay up to 10 percent of the purchase price as a down payment. This is
because the VA guarantees home loans and often ends up owning the property if the veteran
defaults.
If you are interested in purchasing a VA foreclosure, call
1-800-827-1000 to request a current listing. About 100 new properties are listed every two
weeks.
You should be aware that foreclosure properties are sold
"as is," meaning limited repairs have been made but no structural or mechanical
warranties are implied.
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- How can Fannie Mae help a
home buyer?
Fannie Mae's Community Home Buyers
Program allows first-time buyers with little cash to obtain 95 percent financing.
Participants may put down as little as 3 percent of their own money, with the remainder
permitted in the form of a gift from family members, a government program or nonprofit
agency. Mortgage insurance is required on all loans above 80 percent loan-to-value ratio
when borrowers do not use their own funds for at least 5 percent down.
The program is administered through participating lenders.
There are income limits in different states. However, the income restriction is waived
when borrowers participate in the Fannie Neighbors program. Fannie Neighbors also has
lower income requirements for borrowers who want to buy in designated central cities.
People who are borrowing in either of these programs must
attend a seminar on home ownership and the home buying process.
For a list of participating lenders, call Fannie Mae at (800)
732-6643.
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- Do states offer help to
home buyers?
Most states have a housing finance
agency, usually located in the state capital, which offers help for first-time home
buyers.
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- Is PMI always required on
low-down home loans?
A growing number of private
lenders are loosening up their requirements for low-down-payment loans. But private
mortgage insurance, or PMI, usually is required on very low-down loans.
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- Are 40-year mortgages a
good idea?
Smaller monthly payments are the
primary advantage of adding 10 years to the traditional 30-year mortgage, but real estate
experts say the shorter-term loan usually is more beneficial for the home buyer. The
drawback becomes apparent simply by calculating the cost of additional interest payments,
which can total thousands for a few dollars difference in mortgage payments.
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- What about a splitting
my mortgage in two and paying bi-weekly?
Some
people set on paying off their home loan early and reducing interest charges opt for a
biweekly mortgage. Monthly payments are divided in half, payable every two weeks.
Because there are 52 weeks in a year, the program results in
26 half-payments, or the equivalent of 13 monthly payments per year instead of 12. Using
the biweekly payment system, a homeowner with a $70,000, 30-year biweekly mortgage at 10
percent interest could save $60,000 in interest and pay off the balance in less than 21
years.
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- Should I add on or buy a
bigger home?
Consider these questions before
making a choice between adding on to an existing home or moving up in the market to a
bigger house:
- How much money is available, either from cash reserves or
through a home improvement loan, to remodel the current house?
- How much additional space is required? Would the foundation
support a second floor or does the lot have room to expand on the ground level?
- What do local zoning and building ordinances permit?
- How much equity already exists in the property?
- Are there affordable properties for sale that would satisfy
housing needs?
Ultimately, the decision should be based on individual needs,
the extent of work involved and what will add the most value.
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- What kind of return is
there on remodeling jobs?
Remodeling magazine
produces an annual "Cost vs. Value Report'' that answers just that question. The most
important point to remember is that remodeling a home not only improves its livability for
you but its curb appeal with a potential buyer down the road.
Most recently, the highest remodeling paybacks have come from
updating kitchens and baths, home-office additions and extra amenities in older homes.
While home offices are a relatively new remodeling trend, for example, you could expect to
recoup 58 percent of the cost of adding a home office, according to the survey.
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© 2008 Century 21 Real Estate LLC. CENTURY 21 © is a registered trademark licensed to Century 21 Real Estate LLC. Equal Housing Opportunity. Each Office is Independently Owned and Operated.
