Home Buying Advice by Sunvestor's

"A Sunvestor's Guide to Owning a Great Home AND a Great Investment" offers street-smart preparation for buying the right property at the right price, while avoiding financial pitfalls along the way. The step-by-step format guides you through each phase of the process, but goes way beyond the basics.

Taking an investor's approach to purchasing residential real estate, it's perfect for both first-time home buyers and seasoned professionals.   Written by a real estate appraiser and broker, the book emphasis how doing your research and buying in a methodical, value-oriented way can really pay off.

Most homes won’t appreciate in value the way they have in past few years so buying mistakes will be more evident upon re-sale. The reader will learn how to make money at purchase and 20 ways to find the type of property that goes up in value faster than average.

Find out more about Sunvestor’s Guide…

Income Tax Savings

Because of income tax deductions, the government is basically subsidizing your purchase of a home.  All of the interest and property taxes you pay in a given year can be deducted from your gross income to reduce your taxable income.

For example, assume your initial loan balance is $150,000 with an interest rate of eight percent. During the first year you would pay $9969.27 in interest.  If your first payment is January 1st, your taxable income would be almost $10,000 less – due to the IRS interest rate deduction.

Property taxes are deductible, too.  Whatever property taxes you pay in a given year may also be deducted from your gross income, lowering your tax obligation.

As always, we advise you consult with a tax professional about your tax situation.  If you have a comment or question, please feel free to leave that below.

A Matter of Small Things When Buying a House

When looking for a house, the majority of the potential homebuyers usually pay more attention to the things of considerable size – big house, big rooms, big yard etc.  What is usually being overlooked are the small things that can create big problems later.

One thing usually overlooked by a future homeowner is the closet space in the house.  Often times it is only after moving in a that a homebuyer discovers the closet space in the house is not ample for the whole family.  One possible solution to this problem would be to purchase a wardrobe and ask the seller to pay for it.  The seller may or may not agree.  Moreover, the new wardrobe may take a lot of space in your previously spacious room making it less attractive and comfortable.

The second thing likely to be overlooked is whether there are ample electrical outlets in every room.  The problem of having too few outlets can be solved by using extension cords.  However, if the same problem occurs in several rooms, solving it with extension cords could become a fire hazard.

The third small thing that can be a big problem later is whether all the rooms have heating and air conditioning.  If the problem is spotted before buying the property, the seller may pay for new heaters and air conditioners.  However, overlooking a small detail like this may equal a great number of very cold, as well as some unbelievably hot nights.

Are you a cautious or a reckless buyer?  Share your experiences with us.  We would love to hear from you!

Better to Buy a House Than to Pay Rent?  

That depends on when you buy, and how long you own.  Buy at the wrong time — like during the kind of buying frenzy that much of the country has just experienced — and you could well end up wishing you had rented instead.  

Boom market or bust, home buying has so many extra costs — from upfront "points" paid to a lender to title insurance and appraisal fees — that over the first five to seven years, a renter who invests the equivalent of a down payment in stocks could easily do better overall than a house buyer. 

Compounding that problem: Most homeowners move within seven years.   As the ownership timeline stretches out to 15, 20 or 30 years, however, the buyer will almost certainly do better than the renter, especially given the tax benefits of paying mortgage interest over traditional rent and the big rebate when the owner finally sells.  

Be sure to leave us your comment below about renting versus buying.    

More Tips for First Time Homebuyers

Outside of classes, how do you figure out the main things you need to know for the buying process?  Here are some suggestions:

• Consider numbers experts give you on affordability as a ceiling, not a floor. Real-estate people often say the sum of your monthly mortgage payment, homeowner's insurance and property taxes shouldn't be more than 28% of your monthly gross income.  Meanwhile, your monthly debts, including your mortgage payment, shouldn't be more than 36% of your monthly gross income, they say.  But think of your circumstances.  Do you want to spend a lot of money at this stage of life on traveling?  Do you want to put money away so you can stay at home after a child is born?  Count your own values, dreams and limitations in your calculation.

• Try to put down at least 20% of a home's cost. Otherwise, you may have to buy "private mortgage insurance." If you don't have that much cash, consider a "piggy-back loan," which basically involves multiple mortgages for different percentages of the home's price.

• Borrow what you need to borrow, not what you can borrow.  Lenders will often offer you the maximum you can borrow but don't feel it's necessary to go maximizing your borrowing capacity.  If someone hands you a credit card, that doesn't mean you have to go max it out.

• Hire a lawyer, especially your first time out.  When you find a place you like, a lawyer can help you spot objectionable phrases and clauses that find their way into contracts.  If you don't have a lawyer who is familiar with all the details, all the legalese in the document and jargon, you're not going to understand it.

Talk to us about your buying options, and what might be best for you.  When buying real estate, one size does not fit all.  Everyone's circumstances are different, so there is no steadfast rule that covers every situation.  We'd love to assist you in answering any questions you may have. 

Leave us a comment below if you like.