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2020

Buying a home is a big deal and we are here to help. Here are some useful homebuying tips, ideas and advice. 

Berkshire Hathaway HomeServices North Properties

www.northproperties.com/

 

HOMEBUYERS’ ADVICE

The Best Homebuying Strategy

You don’t want to throw money away on rent anymore, do you? Instead, you can build an asset that can grow large if you handle your money wisely.

Your best strategy? Prepare financially now.

Down-payments.  Small down-payments spell risk for lenders. You’ll pay a higher interest rate, and you’ll have to get private mortgage insurance, about 0.5 to 1.0 percent of your mortgage. That’s about $2000 a year on a $200,000 mortgage, which will add about $167 to your monthly bills.   

While 20% down is ideal, paying PMI allows you to get into a home faster with less money down. You’ll benefit in a desirable housing market where home equity is rising.

The costs of homeownership. According to The Motley Fool, you should prepare to pay about two to five percent of the transaction in closing costs. Afterward, expect to pay for maintenance and repairs, which average about 1% of your home’s value annually. Property taxes can be reassessed annually by multiplying your home’s value by the mill rate (percentage) for your county. Prepare for utilities to rise in winter and summer.

Debt management. Money guru Dave Ramsey says buying a home when you’re in debt is like running a marathon with weights chained to your legs.

Rutgers University economists suggest your monthly consumer debt service should be no higher than 10% of your net income. At 20% or more, you’re in the danger zone. Divide your monthly consumer debt payments by your total net income to find your percentage.

HOMEBUYERS’ ADVICE

Buying a Flipped Home

On the surface, the house looks great – fresh paint, new appliances in the kitchen, new carpet throughout and maybe an updated bath. The colors are modern and appealing and the home has been staged to perfection. That’s the goal of a flipped home - to make you feel like you could move right in without being bogged down with repairs and updates.

But, beware. While some home flippers are good, others are unregulated professionals who buy homes that are undervalued due to poor condition. They move fast to get the home back on the market quickly to minimize their holding costs. They seldom take time or spend the money to address high-cost items, like plumbing, foundations, and electrical replacement.

How do you know whether the home is a flipper-upper? Bankrate.com suggests getting as much information as you can about the home’s history:

  • Has the home sold within the last six months or so and for a much lower price than the current asking price?
  • Is the home owned by a non-occupying seller?
  • Has the seller owned other homes for short periods before reselling them?
  • Are the updates largely cosmetic? New sink, old pipes?
  • Were permits obtained where necessary?
  • Is a detailed seller’s disclosure, recent home inspection, and list of improvements available?

Your Berkshire Hathaway HomeServices network professional can help you get vital information about the home so you can look past the dazzle of new décor and evaluate this home fairly compared to other properties in your price range.

HOMEBUYERS’ ADVICE

Four Things To Do Before You Move In

You’re almost done! All that’s left to do is to pack up and move in to your first real home. Here are a few tips that will make your moving day as a new homeowner easier.

  1. Sort your belongings. Moving can be more expensive when you cart along items you don’t really want or need. A great way to do it is to sort and pack at the same time. Think in terms of three piles – keep, donate, trash. Trash the trash and drop the donations off at the first opportunity. Put your “keep” pile into moving boxes labeled by room.
  2. Plan your storage options. Closets, attics and cabinets can fill up quickly, especially if you’re downsizing. Where will the out-of-season sports gear go? What about holiday decorations? How are you setting up your kitchen? What goes in the garage besides tools? Where will you put valuables? 
  3. Plan your car trip. Whether you’re moving across the country or near the same neighborhood, pack your car or rental with necessities, including first aid, drinks, and snacks. Each family member should choose their favorite items to bring, like blankets, pillows, games, books, and a change of clothes – just in case you don’t have time to unpack those items the first day in your new home.
  4. Meet your neighbors. If possible, introduce yourselves to your neighbors beforehand to let them know you’re moving in. You’ll have a greater sense of familiarity and belonging on moving day.

HOMEBUYERS’ ADVICE

Is It Time To Buy a Vacation Home?

You may be feeling fairly flush these days, with a bigger salary, job security, appreciating homestead and other wise investments. Now might be the right time for you to buy a vacation home.

According to the 2019 U.S. Vacation Home Counties Report compiled by the National Association of REALTORS, the median price of vacation homes between 2013 and 2018 appreciated 36% compared to existing and new homes at 31%.

Like many vacation home buyers, you may be thinking of a great family getaway, but you can also use a second home as an additional way to build equity. You can lease it for income, and then use the property as your primary residence upon retirement.

Banks have stiffer qualifying requirements and charge higher mortgage rates for non-primary homes. Federal tax laws allow you to deduct interest for both a primary and second home up to $750,000 for married couples and $375,000 for singles, as well as local property tax amounts paid. However, you only have one homestead that qualifies for the owner/occupant tax rate from your local taxing authority.

If you rent the property fewer than 14 days, you don’t have to report rental income to the IRS. Otherwise, you should go to IRS.gov or ask your accountant to explain rental income rules so you can be better prepared at tax time.


9542 E. 16 Frontage Rd. Onalaska, WI 54650

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