When a couple is thinking about purchasing a home, they may wonder about whether to go new or old. There are benefits to making a brand new home purchase that people tend to forget about. Knowing how buying a new house – advantages for homeowners, will work, can help a couple make a good and informed choice when it comes to home buying. Realizing what is involved with making a home choice, will effect the type and age of home that is bought. Many couples will look at the pros and cons when it comes to newer and used homes, so that the choice they make is the right own for them.

One of the advantages to buying a recent property, is that the home may take several months or years to create. That can give someone the time they may need to make financial plans and save the down payment. With an older home, the down payment has to be made at the time of sale. With most resale homes offering quick closings that doesn’t give someone much time to save. A new home can provide people with the time they need to put a large down payment down on the listing.

Picking a model home, can also allow a couple to pick how the house will look. They can pick everything from the brick color, to the floor type and accessories in the kitchen and bathroom. Choosing the materials and colors can be a fun and exciting experience for anyone to engage in.

When a new buyer walks into a resale home, they may see many areas for improvement. Things like the paint may be of older dated colors, the floor may be old and dated as well. The kitchen and bathroom areas may also feature older cabinets and color choices, leaving a new owner with expensive bills to get it into shape.

When a new home is sought after, a couple can take advantage of knowing that everything in the home is new and wont need to be replaced. An older model may need certain things done in the home fairly quickly after moving in. The furnace, windows and roof are typically the first things to need to be fixed.

When a couple looks for a new home, they can truly pick out what they want. There are lots of builders who offer many different exterior looks as well as interior floor patterns. It could be simpler to look for a home, when they are searching through floor plans and house styles.

Moving into a new residence, can give people peace of mind. They don’t have to worry about the expensive of unexpected repairs, and they also do not need to think about paying thousands to upgrade certain aspects of the house. They can just move in and enjoy living there.

Couples who are buying a new house-advantages for homeowners, may seem numerous. That is because there are lots of reasons why buying new homes can be better. There could be less stress involved and more of a selection when it comes to how the home looks on the outside and inside.

We hear about historically low interest rates on home loans practically every week. Rates on 30-year fixed mortgages are well below 5% and still falling! Interest rates like these would have home buyers lining up to buy any available real estate in any other market. But now very few people are taking advantage of these low, low home loan rates. Why is that?

The biggest problem is that a lot of homeowners are upside down on their mortgages. Over the last few years property values have fallen significantly in every state. Many homeowners are finding that their homes are worth less now than when they bought them. Cash out refinances have exacerbated the problem, and sometimes even caused homeowners to owe more than the current value of their home.

The maximum loan amount is typicallly a percentage of a home’s current value – current value being the key word. It’s not possible for people to pay off their old loan with proceeds from a new loan with a lower balance. That’s true for a refinance or for selling one house and buying another. Unless a homeowner can come up with the cash to make up the shortfall, they’re stuck, no matter how well qualified they are.

In this economy the unemployment rate is high, but as concerning is the length of time it has been so high. Many homeowners have been out of work for an extended period of time. Many more are underemployed – working part time jobs or jobs far below their qualifications and income. In spite of this, a lot of them are making ends meet somehow. They’ve cut back on spending, stay-at-home moms have gone back to work, and they’ve started their own businesses. But they can’t show sufficient income to prove to a lender that they can make a lower mortgage payment than the one they’re making now. Changes in employment make it difficult to qualify for a loan even if the income is sufficient. Two years of steady employment in the same field is considered standard by most lenders. Borrowers who switched to a different field because they couldn’t find work in their chosen field, or borrowers who took a contract position won’t qualify until they have a two year history to show.

The standards for qualifying for a loan have become more stringent. The huge number of defaults can be traced back to lending practices that were too lenient. As a result, lending requirements have become much tougher. They want to see higher credit scores and lower debt ratios than they did years ago. The chances that a homeowner has a lot of cash in the bank and nearly perfect credit, after surviving employment problems, falling home values and other challenges, is slim.

First time buyers face all of these problems, except for being upside down on their mortgages. Unfortunately potential first time buyers with sufficient verifiable income, a hefty downpayment and great credit are in short supply. Fear of losing their jobs or of home prices falling further has detered many of those who actually are in a good position to buy a home. This isn’t a comfortable time for a beginner to take the plunge.

So those tantalizing interest rates that we keep hearing about in the news remain just out of reach. Something that’s technically true, but simultaneously too good to be true.

If you are one of those in a position to buy a new home in California, this is the time to do it. Once the market turns around, interest rates will rise quickly. San Diego new homes are sure to appreciate in the long run.

categories: real estate,finance,loans,homes,housing,economy,home loans,new home

Some may say that being able to buy and then afford a home in this market is an unreasonable goal. If you meet certain conditions you could be able to get into your first home even in this market.

Before taking this major step there are a few things you need to know. Even in the current real estate market, taking a few simple steps can put you on the path to successfully buying and keeping your first home.

Before you do anything else, you need to know how much you can realistically afford. Talk to a licensed and experienced Realtor in your area, or find an online mortgage calculator. It would be a frustrating waste of time to look at houses that you can’t afford, and it would be less than optimal to look at homes that are smaller than what you need. If you know what your price range is, you’ll start off on the right foot. A good Realtor who is familiar with your local market can help you find the best homes in your price range and help you through the loan application process.

Find out what your credit score is. If there are any errors, this is the time to fix them. If your score is low, start working to clean it up. Your credit score along with your available down payment will play a role in determining what interest rate your will have for your loan. Also the more you have available as a down payment will reduce your loan amount which in turn will reduce your monthly payment.

No and low down payments are available and require little if any cash, from the buyer. Today buyers are able to purchase a home with as little as four percent down. Compare that to the average down payment of twenty percent 20 years ago. Many factors will figure into how much you need to put down. Look for a special loan that allows you to buy with little or no cash down. No down payment loans can be challenging to find in today’s market. Again your circumstances will determine what you qualify for. If you are a veteran you can probably qualify for a VA Loan but low down payments in the form of FHA loans are also available.

The FHA Loan is a low down payment mortgage that requires only a 3.5% down payment. FHA loans used have fairly low maximum amounts, putting them out of reach of buyers in expensive metropolitan areas. Recent increases to more than $700,000 in some geographic areas have made them accessible to almost all first time home buyers. Many first time buyers have not saved up enough to make a 20% down payment, so an FHA loan with only 3.5% down is an ideal solution. Keep in mind though that borrowers who put down less than 20% are usually required to pay PMI (Private Mortgage Insurance) again depending on the loan program so keep in mind your particular circumstances always play a part in this process.

After a few years of making mortgage payments, your equity will have grown. Once you have 20% to 22% equity in your home, you should be able to cancel your private mortgage insurance and save that money each month. Think of it as a cost of getting your foot in the door of homeownership. It’s usually easier than saving up a 20% down payment.

Even if you could come up with a 20% down payment, you may choose to apply for a loan with a lower down payment. Then you could use the extra money for other things, like debt consolidation, your child’s college education, or future mortgage payments.

What does all of this mean to you? Use the resources available and you can be opening the door on your new home, even in this market.

Many homes on the market today are short sales, which take a long time to buy. Another option is to buy new construction, like these new homes in San Diego. Builders often help their buyers in obtaining home loans.