What Every First Time Home Buyer Should Know

A home is one of the biggest purchases you can make and if you’re about to venture into the world of real estate as a first time home buyer it can be a bit nerve-racking, to say the least.  What should be an exciting time can often be overshadowed by the multiple steps that are part of the home buying process and the unfamiliar lingo you’ll hear daily before you even turn that key in your new front door. It might sound stressful, and honestly a little scary, but it doesn’t have to be if you educate yourself and find a realtor who will guide you through the entire process.

Since it’s a lot to take in we’ve listed some first-time home buyer tips to get you thinking even before you begin looking at homes with your real estate agent.

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  1. Start saving early

If you can, start saving for your first home sooner rather than later. Saving more money now means having more for a down payment, which in turn lowers your monthly mortgage payment. While most homebuyers aim to put down 20%, it’s not required when buying a home. You will, however, incur PMI (private mortgage insurance), an additional cost added to your monthly mortgage payment.  Down payment calculator is a good way to figure out how much money you’ll need to put down based on various percentages. Just plug in the amount you are looking to spend, the amount of money you have or the percentage you want to put down, and it will calculate the rest for you.

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  1. How much can you afford

It’s important to know just how much you can afford to spend. This will allow your real estate agent to target a certain price range when searching the MLS (Multiple Listing Services) system. A home affordability calculator can help you determine that amount.

  1. Budget for closing costs and additional expenses

Once you know how much you can afford, keep in mind there are additional expenses, such as closing costs which vary state by state. For instance, in NYC you can anticipate closing costs somewhere in the range of 4 to 5% of your loan amount. Each homebuyer’s situation is different so it’s best to talk with a mortgage specialist early on.

Another good idea is to set aside some money for after you move in. You might need to purchase furniture, appliances, or do some work on your new home. As a homeowner, it’s safe to say unexpected expenses will arise when you least expect them.

  1. Check your credit score

Understand the importance of a high credit score; this is a major factor when applying for a mortgage.  It also determines approval, interest rate, and possible terms of the loan. If your score is on the lower side, work on getting it raised. Focus on paying off any outstanding debt(s) and stay away from opening up any new credit accounts or making large purchases. If your credit needs a bit more help, there are companies who can assist, for a fee, in repairing and raising your credit score.

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  1. Explore down payment options

A variety of first-time home buyer programs are available both through federal and state programs. Loans such as Federal Housing Administration (FHA) and Veteran Affairs (VA) loans are available for those who qualify. If you have less than perfect credit, a small amount of money saved, and do not qualify for a conventional mortgage, you might be eligible for the FHA loan. An FHA loan does require mortgage insurance which stays for the life of the loan, unlike a conventional mortgage which can be canceled after your loan is paid down to 80% or more of the appraised value of the home. Educate yourself on the pros and cons of an FHA loan.

A VA loan is available for qualified U.S. veterans, active military personnel, and certain surviving spouses. There are many benefits to this type of loan and one to look into if you meet the requirements.

  1. Pre-Approval

As you start the home buying process, a pre-approval letter will confirm in writing how much a lender is willing to lend you and at what terms. This letter shows both your real estate agent and the seller that you are a serious buyer, and in some cases will give you the upper hand over a potential buyer who has not taken this step. It’s also necessary to have when you’re ready to put in that offer.

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  1. Hire the right buyer’s agent

Now that you have everything in place and you’re ready to buy your home, it’s time to find a highly skilled, and motived agent who is both knowledgeable about the area you are looking to move in to, as well as the home buying process. Here at Madison Estates, we provide both the information and guidance you’ll need when purchasing your home along with saving you time. With access to one of the largest data basis in New York, we not only find you your dream home we will be there to advise you every step of the way.

Tips for Making Your Home More Desirable Before You Sell

Once you’ve made the decision to sell your home there are a few things to consider before finding a realtor and putting that “For Sale” sign in the ground.

While the most important factor is to set your price for the right amount of money for the neighborhood you’re located in, the next step is setting the stage and making your home stand out to potential buyers.

Because first impressions count, especially in real estate, small changes and touches can make all the difference.

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Make a Good First Impression

Before potential buyers step foot inside, they’re going to be looking at the outside and making a mental note of its curb appeal. You want the most appealing look from the sidewalk to your front door.

  • Landscaping –Clean up both the front and backyard (if you have one) to make sure it looks spotless. Trim any bushes or shrubs so they are well manicured. If you have a deck, you might want to consider pressure washing for a clean look.
  • Dress up your front door – If your door is old and worn, touch it up with a fresh coat of paint as opposed to replacing the door completely. Consider hanging a wreath that shows some of your personal style.
  • Swap outdated fixtures – Take a look at your door knobs, house numbers, mailbox, and outdoor light fixtures to make sure they’re all in good condition.

Create a Welcoming Environment

Once a potential buyer steps inside you’re going to want them to feel like they’ve just walked into their new home. The goal here is for them to visualize themselves living in your property and with a few touches you’ll be able to pull it off. Don’t go overboard though, less is always more!

  • Plants and Flowers – Fresh or not, quality plants and flowers are attractive to the eye when scattered throughout the home. Choose ones with a fresh, clean scent, nothing too over powering. Décor magazines are a great source of inspiration to help in choosing and placing the best greenery.
  • Fresh coat of paint – By giving walls a once over you’re breathing new life back into those rooms. Experts recommend neutral colors (think grays and beiges) because they’re not distracting. Plus, they make the space appear lighter and brighter which can be a big plus for a room that does not receive a lot of natural light.
  • Clean Up – Before each showing it’s important to make sure your home, both inside and outside, is spotless. It’s a common mistake people make when selling.

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Eliminate Clutter

By decluttering, buyers are able to visualize much easier than in a home that’s filled with tons of stuff. You want to showcase the amount of potential space the new owners will have, not the other way around so take a look and see what you can let go of.

  • Closets – Empty by at least half (rent a storage unit if you have to); this will give the buyer an idea of how much storage they’ll have. On the flip side, it’s a good opportunity to go through what you don’t want; that way you won’t have to pack up and move items that you no longer have a use for.
  • Den/Office area – Any bills, mail, papers that you absolutely do not need get rid of and for the rest of the things you do need, find an out of sight spot where they won’t be seen.
  • Play area – Children’s toys shouldn’t be visible; plus it’s a good time to go through everything and donate the ones they no longer play with.

Let There Be Light

The bigger your home feels the more it will appeal to buyers. While you can’t do anything to increase the size, you can make sure it’s as bright as possible.

  • Open your curtains – This will bring in as much natural light as possible.
  • Darker rooms – For those spaces that do not receive as much natural light as others, invest in some light fixtures and strategically place them around to illuminate even the darkest of spots.

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Take Advantage of Space

Sticking with the theme of creating a space that appears larger, lightening is not the only way to achieve that feel.

  • Rearrange and remove furniture – Removing bulky pieces of furniture is another way to open up a room. Those larger pieces make a space feel smaller so if you can eliminate a few it will give off a more open feeling.

Remember, you don’t have to spend a ton amount of money when creating a warm and inviting space that perspective homeowners can envision themselves living in, you just need to make some improvements that will help showcase the beauty of your home.

To Buy or Rent….that is the question!

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It’s one of those major questions you’re bound to ask yourself at some point and probably the biggest decision from a financial standpoint you’re going to make. The answer though isn’t always a simple one, there are a variety of factors to take into consideration. Ultimately, your decision will be based on what makes the most financial as well as emotional sense for your particular situation.

There is a general belief that owning a home is the ultimate goal, the key to the “American Dream.” And while there are many great reasons to support this thinking, numerous pros and cons should be weighed before signing on the dotted line. And regardless of whether you’re a first time home buyer or a repeat purchaser, be sure to ask yourself a few important questions before contacting a real estate agent to get started.

Thinking about buying, consider the following…

Pros

  • Building equity over time which creates stability and security for your family

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  • Tax benefits – great news, now you can deduct many home-related expenses
  • Potential for rental income
  • More creative freedom – you won’t need to ask anyone’s permission (well maybe your spouse) before tackling a new project
  • Unlimited pets (if you want) – there isn’t a no pet policy when you own your own home

Cons:

  • Potential for financial loss
  • Responsible for all maintenance and repairs

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  • Higher upfront costs

Considering renting…

Pros

  • You’re not responsible for maintenance and repairs
  • No real estate taxes to pay
  • No large down payment
  • Credit requirements are less strict
  • Some utilities might be included in the rental agreement
  • Relocating is easier

Cons

  • No chance to earn equity on your property
  • No tax benefits
  • Limited housing security

Regardless of whether you buy or rent these costs you just can’t escape!

Buying

  • Down payment
  • Home appraisal fee
  • Home inspection fee
  • Property tax
  • 1st years homeowners insurance
  • Any additional closing cost fees

Recurring costs

  • Mortgage loan payments
  • Property taxes
  • Homeowners insurance
  • Utilities
  • Maintenance
  • Private Mortgage Insurance (PMI) – if you put down less than 20% of the purchase price you’ll have this added monthly payment

Renting

  • Security Deposit
  • First month’s rent
  • Moving Costs

Recurring Costs:

  • Monthly rent
  • Renter’s insurance
  • Utilities (sometimes, certain utilities are included in the rental fee)
  • Laundry (not all rentals offer washer/dryer hookups)

As you’re going down your checklist, consider the following questions

  1. How long do you plan to stay? – The longer you anticipate you’ll be there the better off you are buying. Buying and selling a home requires a good deal of time and money so take that into consideration if you plan to stay less than five years.

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  1. Would you be happy staying longer than planned? – For first time home buyers, the idea of a starter home sounds great, but what if the time comes when you’re ready to sell and it’s not a sellers’ market? Or other unforeseen circumstances arise and you are unable to move when you thought you would?
  2. How stable is your job and your life? – If things both professionally and personally are not stable you might want to reconsider locking yourself into a big financial commitment at the moment.
  3. How do the monthly costs compare? – Do the math and be realistic. Consider all of the monthly costs that go along with owning verse renting.
  4. Do you have enough money for a down payment? – Sure you can get away with putting down less than 20% but that means you’ll be paying PMI along with a higher mortgage payment. Plus, sellers might choose offers with higher down payments and less contingencies.
  5. Do you have savings to pay for repairs? – All homes require repairs at some point, regardless of whether they’re brand new or not. If you’re leaning towards purchasing make sure you have some extra cash in your account for any unforeseen occurrences.

Whatever route you choose, finding the best real estate agent will help make either process as smooth and efficient as possible.

Jumping into Spring with Tips to Get Ready for a New Season

Spring has sprung and we couldn’t be happier to start packing away the winter clothes, snow boots and basically anything winter related. It’s time to embrace this new season with an appreciation for all it promises to bring. It’s a known fact that the shorter days and colder weather can make you feel down; there’s even a name for it, season affective disorder (SAD, an appropriate acronym). As a result, we are ready to not only dust off of our state of mind but also get our home in order. Just like us, they take a beating from the cold, so it’s important to take care of things we’ve had to neglect due to the weather.  Tackling these projects now will ensure you’re ready to enjoy spring before moving into summer!

Since the exterior of our homes bear the brunt of the cold season starting outside is best:

  • Check all windows and doors – the cold weather can break down the caulking and stripping that seals your doors and windows so take a walk around your home to check for any damage. Replace any old, cracked caulk and/or stripping for proper insulation. You don’t want to let the warm air inside especially when you’re running your air conditioner this summer!
  • Clean out gutters and downspouts – During the winter leaves and other debris can accumulate inside so it’s important to clean out and ensure proper functionality. Gutters direct water away from the perimeter of the home and with rainy months ahead you don’t want clogged gutters, they’ll only cause trouble.

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  • Service your air conditioner –To ensure you’re prepared for the hot summer days that follow spring, it’s a good idea to begin servicing your air conditioners Begin by replacing the filters to ensure the efficiency of the unit. Clogged filters make it difficult for the unit to work properly. For anyone with allergies, consider replacing the filter about every 60 days or so. For the more complicated servicing consult an HVAC professional at least once a year.
  • Landscaping – Check the surrounding areas of your home, both front and back, and sweep away any old leaves, debris, and tree branches. If your yard contains any bushes or plants give them a trim; most likely they’ve gotten a bit overgrown during these last few months. And don’t forget to replace that winter ravaged door mat for a fresh new look.

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  • Trim and siding maintenance – Icy and windy winter conditions can wreak havoc on the exterior which can be fragile. Contact a professional if you spot any damage.

Once you wrap up outside, here are some inside spring cleaning tips to get your home in order:

  • Replace damaged or torn window screens – For anyone who likes to keep their windows open it’s important the screens are in perfect condition. This will allow the maximum amount of fresh air to get into your home as well as keep insects like mosquitoes and flies outside where they belong.
  • A deep clean – Give extra care to cleaning your windows; take down and launder the window treatments, dust off the blinds, and clean them with a damp sponge. Carpets and rugs take a hit during the winter months so a deep steam clean will revitalize them. You can either hire a professional service or if you have some extra time, there are places that will rent the machine to you on an hourly basis.

Window Cleaning

  • Test all emergency systems – Check all of your systems (house, smoke, carbon monoxide alarms) to make sure they’re working properly. These units should be tested regularly and spring and fall maintenance are the best times to do this.
  • Ceiling Fans – You might not realize this but the direction of the blades makes a difference. In addition to giving the fan a good cleaning, you’ll want to change the direction of the fans to blow air down to give the room a breeze and make it feel cooler.
  • Store dry goods in airtight containers – With the warmer weather insects return so it’s important to store all your dry goods in sealed containers as well as wash out your pet’s bowls after every meal.

Food Storage

  • Organize, organize, organize – File, shred, and eliminate any clutter. Clean out cabinets, toss anything old such as medicines and cosmetics, and donate or discard get rid of any unnecessary items you don’t use or need.