Waiting For The Dream House

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Once upon a time, when pork chops were a nickel apiece and people paid cash for their cars, prudent advice for young people was to wait and save up enough money until they had cash to pay for their dream house — or at least 50 percent down.

Grandparents, who probably lived through the Great Depression, may be horrified not only at today’s prices, but also at today’s financing advice.

In many areas of the country, though, it’s foolish to wait. In some areas, a young couple may wait a year to accumulate a few thousand dollars, only to find that during that year, the same house they could have bought has gone up in price by more than they were able to save.

In most states, attractive special deals are available for first-time homebuyers . Any good real estate agent who specializes in the areas you want should have information. Especially in those parts of the country where prices are rising, it’s just as well to get in immediately.

These days it’s prudent for many people to buy whatever you can comfortably afford right now. There’s no need to wait till you’re married and ready for a Ozzie and Harriet family either. Singles, single parents, unmarried couples make up a substantial part of the homebuying public these days.

Take advantage of today’s remarkably low mortgage interest rates , move in, start getting the income tax advantages of home ownership, and then save up for your dream house.

When you find it, you’ll have something to trade in, something that may well have gone up in value in the meantime.

Written by Edith Lank

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The Basics: Home Buying 101

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You need three things to buy a house — good income, good credit, and some cash. And if you lack any one of those, sometimes even if you lack two, there is often a way around it.

After all, if you have enough cash, income and credit won’t matter. You can simply pay cash for your home. If that’s your situation, in fact, you’re in a strong negotiating position and can sometimes buy at a bargain figure, because you represent a sure thing, a simple transaction, for the seller.

So what if you have good income and credit, but lack money for down payment and closing costs? Several options are open to you. For starters, veterans can obtain a VA-guaranteed loan with no down payment at all. And if you can find sellers who agree, the VA will allow them to furnish the cash outlay you need, covering everything from bank points to your prepaid property taxes.

Any buyer can apply for an FHA-insured mortgage, with down payment of less than three percent. New regulations allow the down payment to be furnished by a relative. Some of your closing costs (prepaid mortgage insurance premium for example) may be financed along with the rest of the loan. And a cooperative seller may agree to cover some of your other costs.

Or perhaps you’ll find a seller willing to “take back” financing — let you pay month by month on a mortgage, with nothing down and minimal closing costs. You’ll need a sterling credit record and really dependable income before a seller is likely to take such a chance on you, and it will help if the seller doesn’t need immediate cash. Small income properties owned by elderly landlords who are tired of managing tenants are likely bets.

In recent years, many new programs have offered special opportunities for those who can’t meet the usual credit qualifications for mortgage loans. Some of these programs are federal, others are state-sponsored or even local. Some require you to receive credit counseling and attend education seminars on how to manage money. Any good real estate agent should have information on what’s available in your area.

Written by Edith Lank