http://realtytimes.com/122/ScottLauri

This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.

This month’s issue includes topics such as:

“Quick! Take That Low-Interest-Rate Holiday”;
“What’s In, What’s Out with Home Buyers in 2009?”;
“Fix Housing First Coalition Seeks To Revive Economy”;
“The Open House Show”;
“No Place Like Home For Savings”;
“Don’t Miss Tax Deductions On Your Real Estate Investment”;

Plus a roundup of December real estate activity as well as much more advice and information.

I hope you enjoy this monthly newsletter. If you have any comments, please e-mail them to me. Or, if you would like to see a certain topic covered in future months, let me know that too!

A real estate agent’s job is diverse, and the best agents are excellent sources of information. Each day, real estate agent’s are actively involved with mortgage lenders, attorneys, surveyors and taxing authorities, discussing the latest developments in our ever-changing marketplace. Finding the right real estate agent is like finding the right physician. The help of a professional can help satisfy your curiosity. Call or email with your real estate questions.
Read this online and get more information: Are You Curious

It is natural to feel some pressure from even the most easy-going real estate agent–and some uncertainty about making an offer. If you really like a house, there is always the possibility that someone else will share your enthusiasm for it. Whether your local market is active or sluggish, it is sensible to assume that another offer is likely to come in. Perhaps you can afford to “sleep on it”, but moving as quickly as possible will minimize the possibility that the house will go to another buyer.
Read this online and get more information: A Matter of Timing

Eliminating maintenance as a potential issue in the sale can help you ensure that the transaction goes as smoothly as possible. This is especially important when there is active construction of brand-new homes in the area.
Read this online and get more information: Deal with the Defects

You will probably be able to deduct the costs of your move if your new work location means more than an additional 50-mile commute, if you move within a year of taking the job at the new location, and if you work full-time for at least 39 weeks (the total is 78 weeks if you are self-employed). You should keep meticulous records of all of your expenses and consult a tax expert to make sure that you take all the lawful tax deductions allowed by the IRS criteria for expenses related to selling your old home or buying your new one. The IRS publication No. 521 entitled “Tax Information on Moving Expenses” makes good reading before you make a move.
Read this online and get more information: Moving And Taxes

http://realtytimes.com/120/ScottLauri

This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.

This month’s issue includes topics such as:

“Smaller Homeowner Relief Already In Place”;
“Good News for Qualified Buyers”;
“Credit Unions To The Rescue”;
“Finding Discounted Homes For Sale”;
“FHA Still Going Strong”;
“Investor Report: Bailout to Aid Investors”;

Plus a roundup of October real estate activity as well as much more advice and information.

I hope you enjoy this monthly newsletter. If you have any comments, please e-mail them to me. Or, if you would like to see a certain topic covered in future months, let me know that too!

 A groundbreaking ceremony will be held on Saturday Oct 25th at 12:30 and the baseball/softball field just off Elkins road in Milltown.

http://realtytimes.com/119/ScottLauri

This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.

This month’s issue includes topics such as:

“Five Key Areas to Pay Attention to When Buying a Home”;
“Deploy A Strategic Assault On Your Mortgage Application”;
“Too Much To Store and Too Little Space”;
“Finding Discounted Homes For Sale”;
“Ten Fall Maintenance Tips”;
“Understanding Your Electrical System Can Help You Spot Problem Areas”;

Plus a roundup of September real estate activity as well as much more advice and information.

I hope you enjoy this monthly newsletter. If you have any comments, please e-mail them to me. Or, if you would like to see a certain topic covered in future months, let me know that too!

http://realtytimes.com/118/ScottLauri

This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.

This month’s issue includes topics such as:

“What the Housing and Economic Recovery Act of 2008 Means for You”;
“Moving Away From Heavy Gasoline Use”;
“New Fed Rules To Prevent Future Runs on Bad Loans”;
“Open The Doors And Buyers Shall Come — But Prepare First!”;
“Investor Report: Hidden Tax Pitfall”;
“Don’t Overlook The Garage When Getting Your Home Ready To Sell”;

Plus a roundup of August real estate activity as well as much more advice and information.

I hope you enjoy this monthly newsletter. If you have any comments, or if you would like to see a certain topic covered in future months, let me know that too!

When you purchase a home, you can take advantage of a number of lucrative tax benefits, thereby cutting the real cost of homeownership. Getting to know your tax advantages, and keeping track of home improvements, will pay off handsomely in the long run.

Mortgage Interest

For home mortgages totaling up to $1 million, taxpayers are allowed to deduct their annual mortgage interest payments from their income. Homeowners are allowed to deduct mortgage interest for primary residences, vacation homes and rental properties, one way or another.

For your primary residence, of course, interest payments are fully deductible under the $1 million mortgage limit. Your mortgage company will send you a statement at the first of the year showing the total interest paid during the previous year. If you’re in the 15% tax bracket, a mortgage interest payment of $8,000 for the year would reduce your taxes by $1,200. The savings would be $2,200 if you fall into the new 27.5% bracket.

For rental properties, interest payments are counted as part of deductible rent expenses. If an overall loss results because total rent expenses (including interest expense) exceed rent income, the loss is deductible against other income such as wages, but only up to $25,000 in losses. The property owner must be an active participant to qualify and the $25,000 amount is reduced when total income goes over $100,000.

For vacation homes, overall losses are not deductible, but all mortgage interest and property taxes are deductible, either as rent expenses or as additional itemized deductions. A residence is a vacation home if it was used personally more than 14 days or 10% of the days it was rented (if rented more than 140 days).

On home equity loans (loans secured by a primary or second home), interest is fully deductible for loans up to $100,000, regardless of how the proceeds are used. When added to other debt secured by the residence, the total cannot exceed the fair market value of the property. (In other words, you can’t deduct all the interest on a 125% loan-to-value mortgage.)

Property Taxes

In addition to mortgage interest, homeowners also get to deduct property taxes from their income on annual federal returns. You’ll receive a statement of property taxes paid from your lender early in the year. If you purchase a home this year, check your settlement papers when completing your return next year to see if you paid prorated taxes, which would be a deductible item.

Loan Points

Don’t forget to deduct any loan discount points that may have been paid at settlement — by you or the seller. You can deduct loan discount fees in the year you paid for financing to purchase a home, as long as you intend to occupy the residence.

A point equals 1% of the amount of the loan, i.e., one point would equal $1,000 on a $100,000 loan. (Be careful not to confuse loan discount points with mortgage service fees that are sometimes expressed as points — mortgage service fees are not deductible.)

Even if the seller pays the points, you can still claim the deduction. If you choose this alternative, however, you must reduce the cost basis of the property (discussed later) by the deducted amount when you sell the home. However, with current capital gain exclusion levels — $250,000 (single filers), $500,000 (married, filing jointly) — the basis reduction will usually have no tax effect.

Points Paid At Refinancing

Should you ever refinance your home, the rules for deducting discount points are different. In this case, you may not deduct the points in full the year you refinance your home. Instead, you must amortize them over the life of the loan. For instance, if you refinanced to a 20-year loan and paid $1,000 in points, you would deduct 1/20 of the points ($50) for each year of the term of the loan. (Note: If the home is refinanced again or sold, the remaining balance of points from the earlier refinancing is fully deductible.)

If any of the funds from the refinanced loan are used for home improvement, the percentage of the points paid for the part of the funds used for improvements may be deducted in full in the refinance year.

Track Home Improvements

It may be difficult to focus on selling a home when you’re just purchasing one, but you should be vigilant about keeping financial records related to your home from the outset. Bear in mind that when you sell your home, you could have a capital gains tax liability on your home-sale profits. Keeping track of your purchase and improvement costs will help reduce (or eliminate) your tax bill at sale time.

Capital gains. The profit you make when selling a home qualifies as a “capital gain.” Uncle Sam may be able to get a some of those gains if they exceed exclusion limits or you don’t meet the “time and use” tests.

Currently, you can exclude from taxable income home-sale profits up to $500,000 (for married taxpayers) or $250,000 (for singles). There are, however, a few rules:

You must have owned the home for at least two of the five years prior to the sale.

You must have used the home as your principal residence for a total of two of the previous five years. Any two years qualify, including intermittent, non-consecutive periods of time.

You must wait two years between home sales that claim the exclusion.
If you must sell a principal residence before the two-year qualification is met due to a change in place of employment, health, or unforeseen circumstances, you may take a prorated portion of the exclusion. (Consult with a tax professional if this applies to you.)

To compute your capital gain, you must first know your home’s “basis value” — your costs to acquire the home plus or minus any “adjustments.”

Acquisition Costs. The starting point of your home’s basis value is the price you paid for it. But purchasing costs also include most settlement or closing costs you paid, such as fees for title insurance, legal service, recording fees, surveys, transfer taxes, abstract of title, and more. You cannot, however, include fire insurance premiums, rent to occupy the home prior to settlement, mortgage insurance premiums or loan-acquisition costs (such as discount points or credit reports). Nor can you include escrowed amounts for future payment of taxes or insurance.

Adjustments To Basis. You may add certain items to your home’s cost basis and you must subtract certain other items from it. The higher the basis value, the lower your capital gains tax liability will be.

Increases to basis include: the cost of “capital” improvements to your home (e.g., putting on an addition, replacing the entire roof, paving the driveway, installing air conditioning, etc., but not home maintenance or repair expenses); assessments for local improvements; amounts spent to restore damaged property.

Items that decrease your basis include: insurance reimbursement for casualty losses; deductible casualty loss not covered by insurance; payment received for granting an easement or right-of-way; depreciation deduction for use of your home for business or as a rental property; value of energy conservation subsidy; points paid by the seller; gains deferred on sale of a home before May 7, 1997.

For detailed information on these basis issues, consult a tax professional or refer to IRS Publication 523, Chapter 2.

Home-Sale Proceeds. Next, you’ll need to compute the proceeds from your home sale, which equal the sales price minus your selling expenses. Note that selling expenses include broker’s commissions and legal fees. They also include expenses that would otherwise be considered repairs providing they were incurred to make the home more saleable and were completed within 90 days of the sale.

The Calculation. Now you can do the math. Subtract your home’s adjusted basis value from your home-sale proceeds. The answer is your capital gain amount. If it’s over the $250,000 or $500,000 limits, you’ll have some taxes to pay.

If you never sell your home for more than $250,000 or $500,000, you might never have to compute your home’s cost basis. Still, there’s no telling how much your home might be worth in the future, or whether you’ll need to know its cost basis for other reasons (such as depreciating the home as a rental for a period of time). Keeping good records of your home improvements could save you thousands of dollars in taxes later on.

Walk-Through

Just before the settlement meeting (perhaps the evening before if the settlement is scheduled early in the morning), you and your agent will do a “walk through” of the home to check its condition. During this last-minute inspection, you’ll look to ensure all repairs have been made as agreed upon and that no new problems have www.rainmakerecentral.comeloped. If settlement day is also occupancy day, you’ll want to make certain the home is empty and clean.

Miscellaneous Home Deductions

Other home-related tax deductions may apply to your situation, particularly if a move to a new home is job-related or if you use a portion of your home as a home office. Be sure to consult a tax professional to find out more.

If you’re considering your first home purchase, you may want to read our online report, INVEST YOUR RENT: Why Pay Your Landlord’s Mortgage? You can read it right now by clicking on the link.

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

Once your purchase contract has been accepted by a seller, there are still many details to handle before your home purchase goes to settlement — when all parties to the transaction sit down to determine whether the contract has been served and, if so, to finalize the deal. If all goes well, keys are handed over and moving trucks go into gear.

Your real estate agent will handle many of the tasks required for settlement, but you’ll certainly need to be involved and making decisions along the way.

Timing Your Settlement

One prevalent myth has it that you should schedule the settlement date for late in the month in order to pay less interest. In fact, you’ll pay interest starting with settlement day and ending with the day the mortgage is paid off. Thirty years is 30 years, regardless when it begins.

What appears to be a “savings” is the amount of cash you pay at settlement for items that must be prepaid. An end-of-the-month settlement requires less cash because the prepaid items include mortgage interest due for however many days of the month remain between closing and the first of the next month. Therefore, at a January 31 settlement, you would pay only one day’s interest; at a January 15 closing, you would pay 16 days interest. In the long run, however, you’ll pay the same amount of interest, no matter when you close.

Mortgage Matters

If you were pre-approved for a loan, much of the mortgage application process has already been completed. Otherwise, you’ll need to apply for a loan as soon as possible. Remember, your credit score is just a snapshot of your credit worthiness. We’ve seen many buyers adversely affect their credit scores, changing their loan eligibility just before settlement. Here’s how to avoid last-minute mortgage-approval problems:

Don’t order furniture or appliances for your new home, even if no payment is immediately due.

Don’t allow stores to run a credit check for a new credit card when shopping or looking for new furniture or appliances.

Don’t apply for new credit cards, even when stores offer a discount in return for your card application.

Pay all credit-card bills on time, even if it means paying utility bills late.

Refuse increases in your credit limit if the increase is more than you need or is high in relation to your income.
.

Inspections

If you included a home-inspection contingency in your contract, you’ll need to select a home inspector. Once the inspection is complete, you’ll have to decide how to respond to any problems found. Depending on how the contract is written, you may opt to walk away from the deal if major problems, such as a cracked foundation, are identified. Otherwise, you should negotiate with the seller about repairing smaller problems or receiving some form of compensation at settlement.

In many states, a pest inspection is also required. Usually, it’s the seller’s responsibility to order and pay for this inspection. If problems are found, they must be corrected before settlement.

Appraisal And Survey

Your lender will want to verify the value of the home by sending out a professional to appraise the property. What if the appraisal comes in below the contract price? Depending on how your contract is written, you may or may not have to make up the difference with your own cash. It may be possible to renegotiate the price with the seller. The property will also be surveyed to ensure against encroachments.

Insurance

Your lender will want you to purchase two types of policies — homeowner’s insurance and a lender’s title insurance policy — the costs of which are often paid at settlement. The homeowner’s policy will protect the home and its contents against fire, theft, natural disaster, etc., up to a certain limit. You’ll need to decide what type of coverage (replacement vs. actual cash value) and what amount of insurance to purchase. In some localities, flood insurance may also be required.

A lender’s title insurance policy will protect the lender’s investment in the event that a former owner someday establishes a legitimate ownership claim on the property. Note, however, this policy offers no protection to you, the owner. It is highly recommended that you purchase a separate title insurance policy to protect your equity in the event someone else comes forward with a legitimate ownership claim.

Walk-Through

Just before the settlement meeting (perhaps the evening before if the settlement is scheduled early in the morning), you and your agent will do a “walk through” of the home to check its condition. During this last-minute inspection, you’ll look to ensure all repairs have been made as agreed upon and that no new problems have developed. If settlement day is also occupancy day, you’ll want to make certain the home is empty and clean.

Settlement Day

Assuming all goes well, you’ll be relieved to sit down at the settlement table with the seller and finalize the purchase of your home. You’ll have lots of paperwork to sign, which the settlement officer will explain as you go along. This is no time to be sheepish if you have any questions. Once settlement is complete, it is difficult to undo what’s been signed and dated by all parties involved.

If for some reason you are unable to attend the settlement meeting, you’ll need to make arrangements ahead of time, giving Power Of Attorney (POA) to someone who can sign paperwork for you. Note that if your spouse’s name is to be on the deed and mortgage, he or she will need to attend settlement or give POA to you or someone else.

SETTLEMENT: Secrets To An Easy Contract Closing. You can read it right now by clicking on the link.

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

http://realtytimes.com/117/ScottLauri

This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.

This month’s issue includes topics such as:

“Mortgage Rate Locks Become Crucial”;
“Man’s Best Friend May Be Costly When Selling Your Home”;
“Credit Scores Remain Misunderstood”;
“Washington Report: Tax Provisions”;
“Re-examine Your Risk For Flood”;
“Love The House, Hate The Traffic Noise — There Is Hope!”;

Plus a roundup of July real estate activity as well as much more advice and information.

I hope you enjoy this monthly newsletter. If you have any comments, please e-mail them to me. Or, if you would like to see a certain topic covered in future months, let me know that too!

If you do not wish to receive this Newsletter each month, please reply to this e-mail with the word ‘REMOVE’ in the subject line.

Sincerely,
Scott Lauri

 Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).

 Click Here to find other information about the Housing and Economic Recovery Act.

http://money.cnn.com/magazines/moneymag/bplive/2008/top100/

View Homes for sale in Franklin Township here

Negotiations over the purchase of a home begin when you present the seller with a written purchase offer, usually through your real estate agent. The seller can accept your offer, in writing, reject it, or write a counter-offer, usually by modifying the original offer you presented. Several series of counter-offers may go back and forth before you and the seller finally reach an agreement.

The process of contract building ends when both you and the buyer sign the contract. At this point, the home is considered to be “sold,” though the terms of the contract will not be fulfilled until settlement.

Whether you ever reach an agreement, however, will depend on how well you and your agent negotiate the terms of the contract with the seller. If you took the time to prioritize what you wanted in the home and contract terms, you can refer back to those priorities at this stage to help you focus your negotiations.

Work For The Win-Win Solution

The whole point of negotiating is to find that point at which both parties to the contract get enough of what they want. Yet, sometimes the stickiest issues in negotiations over a home sale are very small ones. Sales have been lost, or nearly lost, over minor details when both the buyer and seller insist on getting their way and neither will compromise.

It’s important to be flexible, while keeping your attention fixed on your primary goals and the final outcome. Ask yourself: Should you demand a specific item or group of items to convey with the property at the risk of having your offer rejected? How much would it really cost you to delay, or move up, your occupancy date? Will you kick yourself if your initial offer is rejected (or out-bid) because you offered too little or asked for too many contingencies?

Be aware that market conditions will play an important role in your negotiations. If you’re fortunate enough to be buying in a buyers’ market, you won’t need to be quite as flexible, or generous, as you might need to be if there aren’t enough homes to go around.

Sales Price

Although the offer price is certainly important, it is only one part of the contract. Other contract terms will increase or decrease the amount of money you actually pay for a home. For example, you may offer full listing price (or more), but ask that the seller pay some or all settlement costs, which could amount to several thousand dollars. Keep your calculator handy when negotiating. You’ll want to assign value to everything you receive and offer in the contract.

In a strong market, you could face a multiple-offer situation. In this case, you may want to include an escalation clause in your contract, indicating that you’ll top the highest bidder by a certain amount, say $5,000. Be sure to see a copy of the highest offer before letting the clause go into effect. Also, make certain you have enough cash to cover the difference if your lender doesn’t appraise the home at the contract price.

In a weak market, you may offer somewhat less than the asking price, and hope to get a bargain. Consider, though, that other contract terms might be nearly as important to the seller as the offer price.

Deposit

Your offer will be accompanied by a deposit check or earnest money, representing the seriousness of your intentions. The seller will think about the size of that deposit before accepting a contract that pulls his or her home off the market. The larger the deposit, the more confident the sellers will be of your ability and willingness to follow through with the contract.

Settlement Costs

Different traditions exist in different areas of the country as to who typically pays certain types of settlement costs — loan points, attorneys’ fees, title searches, recording fees, etc. Nevertheless, you and the seller can split these costs any way you want as you negotiate your contract.

You and the seller may agree to pay particular costs. Or, one of you may agree to pay a specified amount, say $2,000, toward the total cost of settlement. Be sure to factor the costs you decide to pay, if any, into your bottom line.

Conveyances

Different traditions exist in different areas of the country as to who typically pays certain types of settlement costs — loan points, attorneys’ fees, title searches, recording fees, etc. Nevertheless, you and the seller can split these costs any way you want as you negotiate your contract.

You and the seller may agree to pay particular costs. Or, one of you may agree to pay a specified amount, say $2,000, toward the total cost of settlement. Be sure to factor the costs you decide to pay, if any, into your bottom line.

Contingencies

You’ll discover all sorts of contingencies in real estate contracts. In most cases, you’ll want to include a financing contingency, making the sale dependent on the your ability to secure a particular type of financing, at or below a specified rate, by a certain date. (Ideally, you’re already pre-approved for a mortgage.)

Another common contract inclusion buyers seek is an inspection contingency. With a “general inspection contingency,” you would have the option to walk away from the contract if you don’t like anything found in the professional inspector’s report. If you include a “specific inspection contingency,” however, you’ll only be able to get out of the contract if certain problems exist or, if other problems are found, the seller isn’t willing to resolve them (e.g., timely repairs at the seller’s expense, reduction in sales price, etc.). Sellers would be more inclined to accept a specific inspection contingency.

You can ask for a home-sale contingency, making your purchase of the home dependent on the sale of your old home within a specified period of time. If you’re in a strong sellers’ market, this isn’t likely to be accepted since it could delay settlement or increase the possibility that settlement won’t occur.

A number of other types of contingencies and terms are possible. Rely on your professional agent’s advice to help protect your interests as you move through the complexities of contract negotiation.

Want to find out more? Read our online report, NEGOTIATE: How To Buy The House At The Price You Want. You can read it right now by clicking on the link.

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

Once you’ve determined how much you can afford to spend on a home — ideally with a mortgage pre-approval — take some time to consider what you’re really looking for.

Make a list of features you want: number of rooms, lot size, amenities (e.g., fireplace, up-to-date kitchen), sidewalks, architectural style, particular neighborhoods or school systems, etc. Also consider whether you’ll need financing from the seller, a particular occupancy date, or other specific contract terms. (Seller listings may mention certain contract terms they will and will not support.)

Now place your preferences in two categories: “must haves” and “wants.” With a clear picture of your preferences, your agent will be able to focus quickly on locating and showing you appropriate properties. You’ll save time and energy, and you’ll be able to choose a home with less anxiety.

Take Notes

One of the frustrating aspects of home shopping is remembering all the properties you look at. You can better keep track of them by creating a standardized form to fill out as you tour homes. (Although some homes may offer a summary brochure of features, others won’t.)

Your form should leave room for each home’s distinctive details: number of bedrooms and baths; interior colors and decorating style; proximity to schools, shopping and work; neighborhood atmosphere; yard amenities, etc. You may even want to take a Polaroid or digital photo of each home to jog your memory.

Cost Vs. Location

Remember, in the world of real estate, a good location is always a good investment. It’s likely to cost you more too.

Home values reflect proximity to good schools, shopping, recreation, cultural opportunities, places of worship, and places of employment. Although you may be able to get more home for your money (or the same home for less) away from such things, consider whether increased travel time and hassles are worth the trade-off. A remote location could be your ticket to serenity or a passport to isolation, depending on your unique circumstances and priorities.

Ask yourself:

Where will family members go most often from this new location? How easy will it be to reach those places? How accessible are schools, churches, grocery stores, medical care, public transportation, shopping malls and neighborhood services?

What is the view from the house and yard? Is the yard right for your anticipated activities? What uses are possible for nearby undevloped land? Is a new road or road-widening project planned?

Is rush hour traffic a problem? What will be the impact of special events such as local high-school games or church picnics?

How easy is it to get into and out of the driveway? Are streets well-lit at night?

What utilities serve the property? Are the rates competitive? Where will you get your mail? Where are the easements, if any?

Is the soil stable? Is part of the property on a flood plain — if so, what is the history of floods on the property?

Does the community have special by-laws or architectural controls over changes to a home? What are the pros and cons?
Assign priorities to important elements of the home’s location. Then make a list of the positive and negative aspects of each property you tour.

Appreciation Vs. Neighborhood

Areas that have experienced healthy market appreciation over the past few years are certainly worth considering. Remember, however, past performance is not always a reliable predictor of future appreciation or depreciation. A variety of factors affect the stability of property values, including local and national economic trends, the quality of original construction, and the life-stage of the neighborhood.

While newer homes tend to appreciate faster than older ones, they may lack amenities that are important to you — shade trees, sidewalks, variety of architectural designs, etc. If you seek the charms of an older neighborhood, the presence of an active homeowners association, preservation group or renewal effort will help ensure the soundness of your investment.

New Vs. Resale

With a new home, you’ll have the advantage of being able to choose the colors and finishes for floors, bath tiles, kitchen counters, cabinets and appliances. You can opt to upgrade and select builder options, and often you can choose a specific lot. Everything will be clean and new when you move in.

On the other hand, you may not be able to see your new home until the final walk-through. There may be a number of items on your “punch-out list” that need to be fixed or finished by the builder’s crew. Often, new-home buyers have to deal with continuing construction traffic, debris, mud, dust and unfinished roads — at least until the development and adjacent developments are completed. And new homes do have a break-in period, often with problems related to settling.

With a pre-owned home, you can actually walk through the home you are buying, and many personal touches, such as drapes and curtains, will likely have been added. You can also tell what the neighborhood will be like by driving through both during the day and in the evening. Shade trees and mature landscaping often give older neighborhoods a more charming ambiance. Generally speaking, you’ll get more home for your money buying an existing home.

The down side of resales: You may find that the seller’s tastes are not yours. It may be necessary to redecorate, even remodel, to tailor the home to your own color scheme, design preferences and lifestyle. Also, appliances and systems may be several years old, perhaps approaching the need for replacement.

Outlay Vs. Return

Some financial planners recommend buying as much home as you possibly can to maximize the significant tax advantages of homeownership and the potential return on your investment. (After all, a $300,000 home that appreciates 20% over five years would sell for $30,000 more than a $275,000 home appreciating at the same rate.)

If your income is likely to grow in years ahead, it might be wise to stretch your budget for the first few years, buying a home that will accommodate your needs well into the future.

Be careful, however, not to ignore the costs of upkeep when making your budget calculations. The more expensive the home and the larger it is, the more costly (and time consuming) it will be to furnish, maintain and repair. Will you have enough discretionary income and time left over for the other priorities in your life?

House Vs. Home

Buying a house is certainly a major financial investment. Buying a home, however, is an investment in your family’s future. Ultimately, the most important question to answer when looking at any home is, “Will we be happy living here?” No one can answer that question for you, but when you find a home that sparks an enthusiastic “yes!” it’s time to consider making an offer.

Learn how to conduct your own home “pre-inspection” before you make an offer by reading our online report,
TIRE KICKING: Secret Tests To Check A Property’s Condition. Simply click on the link to read it right away.

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

Which do you select first: the loan program or the lender? In most cases, it’s best to decide on the type of loan that will best meet your financial goals, then find a reputable lender who can deliver that option to you at a competitive cost.

If you’re looking for a very new type of loan option, or a relatively obscure one, you may only have a few lenders to choose from. For a more “main-stream” mortgage program, you’ll have lots of lender choices.

Mortgage Terminology

Loan programs fall into all kinds of categories, and some have several different names. It’s helpful to understand some basic terminology before begin to consider today’s abundant choices.

Conventional Vs. non-conventional. Conventional loans are simply loans that are not insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). The non-conventional financing backed by the FHA and VA offers lower down payments and special terms to those who qualify.

Conforming Vs. non-conforming. Often confused with the above terms, conforming really refers to whether a loan meets certain guidelines established by the Federal National Mortgage Association (FNMA; “Fannie Mae”), and the Federal Home Loan Mortgage Corporation (FHLMC; “Freddie Mac”). These guidelines apply to loan limits, the borrower’s credit history and type of income, and characteristics of the property being financed, among other things. If all the guidelines are met, the loan “conforms” and qualifies for a lower interest rate and lower costs compared with non-conforming loans that pose a higher risk to lenders.

Jumbo loans. These are non-conforming loans because they exceed the loan limits set by Fannie Mae/Freddie Mac. As of this writing, the limit was $275,000 for single-family homes (except in Alaska, Hawaii and the Virgin Islands, where it’s $412,500). Mortgage loans over those amounts are “jumbos,” which carry higher interest rates. (Note that limits may be changed, usually increased, annually; ask us or a mortgage lender for current limits.)
 Common Loan Options

It seems every couple of months, a new approach to home financing is introduced to the market. Generally, though, you’ll choose from some variety of the following mortgage loan types:

Fixed-rate mortgage. The interest rate on these loans remains the same for the life of the loan, as does the monthly payment.

The 30-year fixed-rate mortgage is by far the most commonly chosen loan type because its low monthly payments allow buyers to purchase more home for their income. Even though the long-term interest expense is high (compared with shorter-term loans), the early years of a 30-year loan reward borrowers with a sizable mortgage-interest tax deduction. For a conventional loan, if you make less than the standard 20% down payment, you will likely have to pay for private mortgage insurance (PMI), until your equity in the home reaches 20%.

Also available: 20-year and 15-year fixed-rate mortgages offering lower interest rates and faster payoffs, but higher payments. Both FHA and VA offer 30-year and 15-year loans, with low or no down payment required.

Fixed rates are a good choice when rates have been stabilized at a relatively low level or when they’re beginning to rise.

Adjustable-rate mortgage (ARM). These loans start at a rate that’s usually lower (sometimes substantially) than fixed rates. However, the rate on an ARM will change according to a predetermined formula based on some financial market index (e.g., Treasury bills). The rate changes at certain intervals (after 1, 3, 5, 7 or 10 years, on a set schedule, then annually). As the rate changes, so will the monthly payment and interest costs of the loan. ARMs have “caps” that limit how much the rate can adjust annually and over the life of the loan.

ARMS are a good choice when rates have been relatively high or when they are dropping. An ARM may also be a good choice if you don’t expect to keep the loan for more than a few years — you can benefit from the low initial rate (and payments) before it adjusts upwards.

Two-step mortgage. A 30-year loan that starts at a lower-than-fixed rate and adjusts once, to whatever the fixed market rate is at the 5-, 7- or 10-year mark. A 7/23 loan, for example, is a two-step mortgage with a rate adjustment at the 7-year mark.

Like an ARM, a two-step loan offers the benefit of a low initial rate, and may be a good choice for borrowers who do not expect to hold the loan full term or who know their income will increase to cover larger payments (in the event the adjusted rate is significantly higher).

Assumable mortgage. FHA, VA and some ARM loans can be assumed by a new buyer with the approval of the lender. In this case, the buyer agrees to pay off the seller’s equity with a down payment, then takes over responsibility for the seller’s loan at the interest rate it was originally issued with. Buyers may arrange for a second mortgage (sometimes offered by the seller) to help cover the down payment, which may be substantially higher than 20% if the seller has owned the home for a number of years.

Assuming a loan is a good choice if its interest rate is lower than current market rates or if your credit isn’t quite up to snuff for getting a new loan. In addition, you may save on closing costs compared with a new loan.

Balloon mortgage. Offered by some lenders, balloon mortgages are also offered by some sellers who agree to “take back” a loan from their buyers. The borrowed amount is amortized over a 30-year period, keeping payments relatively low for, say, 5 or 7 years, at which point the balance of the loan is due in a lump sum.

You may want to choose a balloon mortgage if you expect a large sum of cash to come your way by the end of the mortgage term, or if you expect to be able to refinance at a reasonable rate by that time.

Built-up mortgage. Cash-poor buyers can get into a home without paying private mortgage insurance (PMI) with a built-up mortgage. These are loans that involve two trusts and a smaller-than-20% down payment. For example, an 80-10-10 loan requires a 10% cash down payment with a 10% second trust to subsidize the 80% first mortgage. There are even 80-15-5 loans where the buyer only needs a 5% down payment. These mortgage programs help save buyers money each month by avoiding PMI.

Other mortgage choices. You may encounter a variety of other loan choices that could meet your needs. Be sure to get a detailed explanation of terms and obligations before making your final decision. Remember, rates aren’t everything; compare the total costs of the loan, including discount points and various lender’s fees, before making your final decision.
 Picking A Lender

When looking for a lender, there are several non-financial characteristics your should consider:

The lender’s track record of closing loans, providing professional service and delivering the loan within the good-faith estimate can be much more valuable than a low interest rate.

If you’re looking at a special form of financing, find out how many of that type of “non-conventional” loan the lender has brokered. Not all loan officers work with VA loans, or construction loans or wrap-around loans. These are specialty programs where experience comes at a price.

Consider the depth of a lender’s program offerings. If for some reason your first mortgage choice falls through, you’ll need more than a one-program lender to give you options. The idea is to avoid having to transfer your loan from one lender to another because the first lender doesn’t work out.
Closing the loan is much more important than finding the lowest cost. It doesn’t matter how much you “would have” saved on a mortgage if it never goes to settlement because the lender couldn’t meet your needs.

Find out how you can get a great deal on a home loan by reading our online report, LOWER RATE: Seven Smart Ways To Reduce Your Mortgage Rate. Simply click on the link to read it right away.

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

Is your credit in good shape? Would you know if it were not? When it comes time to apply for a mortgage loan, you’ll want your credit to be as clean as possible to get as much mortgage as you need at the lowest possible rate.

Take A Peek

It’s a good idea to have a look at your credit report before you apply for a home loan. Contact one of the three largest credit bureaus — Experian, Equifax and TransUnion — to get a copy of your report. (Their websites: www.experian.com, www.equifax.com, www.transunion.com.) In fact, you may want to request reports from all three since some information may appear in one report that doesn’t show up in another. (That’s also why most lenders look at a “three-file merged” report.)

Here’s what lenders hope to see:

All bills are current and have been paid on time for at least two years prior to the loan application.

Mortgage or rent payments have not been more than 30 days late.

Installment and credit-card payments have not been more than 60 days late.

Charge-offs should be resolved before making application for a loan.

Old credit-card accounts have been closed out.

Any late payments have been explained in writing.
Looking at your report early will allow you to clear up any inaccuracies you may find. You may also have time to make some adjustments to your financial picture, improving the credit score lenders will base some or all of their decision on.

Your Credit Score

The most recent approach to rating credit — credit scoring — has been replacing traditional underwriters’ judgments for several years now. A credit score is developed using a standard formula that takes lots of factors into consideration including your income, the number and types of credit you have available, the length of your credit history, total credit balances, your repayment history (including judgments and liens), even the number of recent inquiries from creditors.

Your credit score will be given an A, B, C or D rating, depending on the lender’s standards. A score of 800 is considered perfect, but scores above 660 often fall into the top A rating and qualify for the lowest interest rates.

Remember, not all credit flaws are equal — lenders will overlook some more easily than others. The best way to get your credit picture cleaned up for a mortgage loan application is to retire as much debt as possible beforehand. In particular, pay off and close all but one or two credit cards, and refrain from applying for any additional credit (even a gas card or furniture-store financing) until you’ve settled on your home.

Get Mortgage Pre-Approval

Once you have your credit ready for a lender’s scrutiny — and before you even start home shopping — get pre-approved for a mortgage loan. Being pre-approved means the lender has already processed much of the paperwork for the loan (application, credit check, etc.) and has committed (with certain conditions) to lending you up to a specified amount of money for a qualified home purchase. A loan application fee may be required.

Pre-approval is better than pre-qualification, which only gives you an estimate of how much you can borrow, assuming there are no surprises in the credit- and income-checking process. Being pre-approved, however, will give you bargaining power when it comes time to make an offer on a home. You’ll know exactly how much home you can purchase, and sellers will view you as a serious buyer — one who’s likely to go to settlement.

CREDIT REPAIR: How To Move From Rejection To Approval. Struggling with less than perfect credit? Learn how you can secure a mortgage loan by by reading our Free report

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

About ERA Franchise Systems LLC
ERA Franchise Systems LLC is a global leader in the residential real estate industry with more than 30 years experience in developing consumer-oriented products and services. Since 1977, ERA Real Estate has teamed up with the Muscular Dystrophy Association in its fight against neuromuscular diseases, raising more than $30 million. The ERA network includes more than 38,000 brokers and sales associates and approximately 3,000 offices throughout the United States and 49 other countries and territories. Each office is independently owned and operated except offices owned and operated by NRT LLC. ERA Franchise Systems LLC is a subsidiary of Realogy Corporation, a global provider of real estate and relocation services. ERA Franchise Systems LLC information is available at ERA.com.

Purchasing a home is the most complex financial transaction most people ever undertake. The many details involved — from searching for appropriate properties to negotiating a solid purchase contract, from finding financing to bringing about a successful settlement — amount to a full-time job and then some. That’s why it makes so much sense to work with a professional real estate agent.

Before you begin your home search, find a buyer’s agent who will work with you to represent your interests and handle the many details involved in the transaction. (We would be happy to work with you!)

Picking An Agent

Because you may spend a lot of time home shopping and talking with your agent, it’s very important that you have a good rapport with each other. You should feel comfortable asking the agent questions. You should also have a sense that your concerns are being listened to, taken seriously and responded to appropriately.

Here are some questions you may want to ask agents before you sign a contract for representation:

Do you have access to the area multiple listing service, foreclosed listings and other sources of information about available homes? Make sure your agent is well-connected and knows where the new listings are coming from.

Will you show me all the available homes in my price range, even if they’re listed by another company?

Will you provide me with a comparative price analysis for any homes I’m considering buying?

How often will you communicate with me? How and when will I be able to contact you?

Can you supply me with references from other buyers you’ve represented recently?

How extensive is your knowledge about the current mortgage options available? Can you refer me to reputable lenders?

What types of contract contingencies would you suggest I include in my purchase offer? Look for a highly skilled, creative negotiator who can get your offer accepted while protecting your interests.

What tasks will you take care of to ensure my home purchase goes to settlement as quickly as possible?
 What To Expect

If you decide to work with a buyer’s agent, you’ll sign a contract detailing the exact terms of your relationship. Here are a few things you should expect to see in a written agreement of buyer agency.

Agency disclosure: Explains in plain language that the agent works for you, the buyer, rather than sellers, during the transaction. Many states require disclosure to protect the consumer.

Confidentiality: Nothing said to your agent should be repeated elsewhere — especially to a seller’s agent.

Scope/length of work: Details what the agent will do for you and for how long. This involves the search for homes, previewing them for you, negotiating the purchase contract and overseeing the fulfillment of the contract (e.g., monitoring inspections and appraisals).

Compensation: Spells out who pays the agent working for the buyer. Often, buyer’s agents receive a portion of the commission the seller pays his or her agent and broker — but not always. Some buyer’s agents receive a flat fee or hourly fee from the buyer.

Dual agency: Explains what happens if your agent handles your transaction when his or her company is also representing the seller. The agreement should spell out how your interests will be protected.

SEARCH: Quick Checklist For Finding The Perfect Home. Find out more about how you can purchase a home by clicking the link.

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

Getting enough cash together for a home purchase has been a major stumbling block for many would-be home buyers. But it’s less a problem today than it used to be, thanks to new loan programs and changes in the law.

You certainly will need some cash to make a down payment and cover settlement costs — how much will depend on the loan/lender you choose and the terms of your contract with the seller. You’ll also need to budget cash for moving expenses, new appliances and furniture, decorating costs, perhaps even immediate repairs or remodeling.

Down Payment

Although a 20% down payment is still considered “standard” in the lending industry, home buyers frequently purchase with much less. Most lenders will accept lower down payments, say 10%, if buyers purchase private mortgage insurance (PMI) to shield the lender from the higher risk associated with the loan. Often, an initial premium is paid at the settlement table, with additional premiums paid monthly. Other payment arrangements are available, however. (If you buy PMI, you can have it canceled when your equity in the home reaches 20% or more, either through payment on principal or market appreciation.)

The Federal Housing Administration (FHA) offers loans to qualified buyers with as little as 3% down. Veterans can take advantage of no-down-payment loans from the Department of Veterans Affairs (VA). And zero-down loans are now being offered by conventional lenders for home buyers with excellent credit, though the interest rate on these loans may be somewhat higher.

Whether you decide to make a large or small down payment will depend on the amount of cash you have available and your financial goals. Some buyers prefer to make larger down payments to minimize their monthly payments and interest expense. Other buyers make small down payments because they lack cash or they want to “leverage” their investment (watching their homes appreciate on OPM, other people’s money). The low-down-payment strategy also yields a higher mortgage-interest tax deduction.

Settlement Costs

Settlement costs (also called closing costs) cover a variety of expenses including:

Loan or discount points
Loan origination or service fee
Loan application fee
Credits report
Appraisal
Home inspection
Title insurance (lender’s and buyer’s)
Attorney or settlement agent
Recording fees and transfer taxes
Prepaid interest
Prepayments for taxes and insurance
You may also pay other costs, not listed above, depending on the particular transaction. Some of these costs are typically thought of as sellers’ costs, while others are often paid by buyers, with different traditions about who pays which in different areas of the country. Regardless of local tradition, however, you may be able to negotiate to have the seller pay some or all of your settlement costs. You may also be able to reduce your cash outlay by rolling your settlement costs into your mortgage loan.

Of the settlement costs listed, loan or discount points (paid to reduce your interest rate on the loan) may be the largest expense. If, for example, you pay 2 points (a point equals 1% of the loan amount) to reduce your interest rate by 1/4% on a $100,000 loan, you’ll pay $2,000 for points at closing. If you pay all of the other closing costs in cash as well, you could need an additional $3,000 or more.

Your lender will give you a Good Faith Estimate of closing costs within three days of your loan application. It is, however, an estimate — the actual numbers will differ somewhat by the time you get to settlement.

Collecting Cash

If you negotiate to minimize your cash requirements but you still don’t have enough to purchase a home, there are a number of creative options available. Of course, a disciplined savings plan is the first strategy you should consider. Here are a few other ways you can assemble the cash you’ll need:

First-time buyers (defined as those who haven’t purchased a home in the past two years) are allowed to borrow up to $10,000 from their individual retirement account (IRA), penalty free, if the money is used to purchase a home. The $10,000 can also come from parents’ or grandparents’ IRA accounts.

Borrow from a company pension plan or against a life insurance policy.

Get an advance on a future inheritance.

Ask parents or other benevolent individuals for a tax-free gift, accompanied by a “gift letter” indicating you will not be required to repay the gift.

Partner with others (friends, relatives, investors), to exchange their cash for equity in your home (which you can buy out later, if you wish).

SHELTER: Six Little-Known Ways To Help Relatives Finance A Home. Find out more about how you can purchase a home by clicking the link.

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

Before you even begin to think about what type of home you want or what neighborhood you would like to live in, you’ll need to determine what you can afford. The answer will depend, partly, on the amount of cash you can bring to the purchase. But even more important, is how large a monthly payment you can afford based on your income and other debt obligations

Lender Standards

Lenders use a set of ratios to determine the maximum loan payment they think borrowers can handle without getting financially overextended. Most (though not all) lenders use 28% and 36% limits.

The 28% limit is the maximum amount of your gross monthly income that can be used to pay principal, interest, taxes and insurance (PITI). For example, if you have gross earnings of $5,000 per month, the 28% standard would limit your PITI payment to no more than $1,400 per month. With a 7% interest rate on a 30-year mortgage, that $1,400 payment would qualify you to borrow about $208,000 (depending on the cost of insurance and taxes).

But wait! You still have a 36% limit to worry about. This second ratio holds your PITI payment plus all your other payments for long-term debt (e.g., credit cards, car loans, etc.) to no more than 36% of your gross monthly income. Say you earn $5,000 per month and have monthly installment payments totaling $600 per month. The 36% test would limit your PITI payment to just $1,200 (.36 x $5,000 = $1,800; $1,800 - $600 = $1,200). At that payment level, you could borrow about $180,000.

Add your down payment to the lower of the two amounts the ratios qualify you to borrow and you’ll know the top price you can pay for a home. (Of course, your actual numbers will vary from those above; give us a call to find out how much you could borrow based on your particular income/debt situation.)

Beyond Ratios

Bear in mind, just because a lender is willing to loan you a certain amount of money for a home purchase doesn’t mean you should borrow that much. The ratios yield a maximum amount, which may be too much for some borrowers to handle realistically.

Say you live in an area with a high cost of living, or you have an expensive hobby, or there are additional debt obligations on the horizon — college tuition, elder care, child care. The 64% of income you have left over (after 36% goes to your PITI and debt) may not be enough to cover all your other expenses comfortably. You could end up living “house rich and cash poor,” perhaps even defaulting on your home loan.

On the other hand, borrowers who know their income will increase steadily in subsequent years, or who are close to retiring some long-term debt, may want to take the full amount offered by a lender. You may even want to increase the amount of money you qualify for by retiring some of your long-term debt before applying for a loan. Another way to maximize your loan amount is to shop for a lower interest rate — the lower the interest rate, the more principal you can afford to borrow.

QUALIFIED: How Much House Can You Really Afford?
You can read it right now by clicking on the link.

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

Summer yard sale for Jerry’s Kids.

Saturday June 28th from 10am-4pm to benefit the Muscular Dystrophy (MDA), Lupus Foundation and Salvation Army.  The location is the ERA Absolute Realty parking lot at 1600 Jersey Avenue, North Brunswick, NJ 08902

http://realtytimes.com/115/ScottLauri

This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.

This month’s issue includes topics such as:

“Moving Up? What You Need to Consider to Accommodate Your Growing Family”;
“How To Get the Goods On Regreening”;
“ID Theft Hits Home”;
“Keep Cool Starting From The Top”;
“Avoiding Home-Based Business Blunders”;
“Tax Rebate Uses For Sellers”;

Plus a roundup of May real estate activity as well as much more advice and information.

I hope you enjoy this monthly newsletter. If you have any comments, please e-mail them to me. Or, if you would like to see a certain topic covered in future months, let me know that too!

Owning a home offers significant financial and personal advantages. Homeownership works as an investment, a tax shelter, a savings opportunity and a source of personal satisfaction for millions of Americans.

Homeownership is a durable (real) investment. Like most investments, there are no guarantees as to how much a particular home will appreciate (increase in value) over time. However, decades of generally increasing home values have favored most homeowners with good returns on their home-purchase investment.

Owning your own home doesn’t just provide shelter — it provides a tax shelter. Homeowners benefit from a number of tax advantages unavailable to renters. Chief among them is the mortgage interest tax deduction, which allows you to deduct (with certain limitations) the thousands of dollars in interest you pay on your home loan every year. In fact, the deduction is available for interest on second mortgages, equity loans or lines of credit, and second homes too — again, with certain limitations.

Looking at “after tax” take-home income, the mortgage interest tax deduction alone can sometimes make owning a home less expensive than renting. (You’ll find a detailed discussion of homeowner tax benefits in a separate lesson.)

Paying back the principal (borrowed amount) of your mortgage is a solid form of savings. Over time, your monthly payments increase your equity (share of ownership) in the home. You can “withdraw” those savings by selling your home or by taking out an equity-based loan.

Often, homeowners can move up to a larger or more expensive home using the equity from the sale of their first home as a down payment. Or, they can simply tap their equity (through a home equity loan) to purchase a second home, pay for college expenses, make home improvements, or retire high-interest-rate debt.

Owning a home puts you in control. You have greater financial control because your housing costs are more predictable than a renter’s — even if you choose an adjustable-rate mortgage (ARM). And you can remain in your home as long as you meet your ownership obligations, rather than facing lease expiration at the discretion of some other property owner.

Owning a home allows you more freedom to choose your community, styles of architecture and decor, appliances, and other lifestyle options. In short, homeownership offers a level of comfort, security and personal pride that renting simply can’t provide.

FIRST TIME: How To Buy The Most Home For Your Money. To learn more right now about how you can purchase a home, simply click the link.

ANY QUESTIONS?

We’ll be happy to answer your specific questions about your particular situation.
E-mail your questions to us any time by clicking our e-mail address below.

Thank you,

ERA Absolute Realty
732-220-6611
1600 Jersey Ave.
North Brunswick, New Jersey 08902
Office@AbsoluteERA.com
www.HomesofNJ.com

Cheer up. You’re not alone. With some solid real estate counseling and some help from your lender and/or sellers and others, you can not only get your toe in the door, but you can own the house too. It just takes some creativity, a few inside tips and a bit of homework.

For starters:
Examine your goals
How ironclad are your dreams? Can your ideal of a formal dining room or a hot tub on a redwood deck be postponed? Must you have a two-car garage? Lowering your expectations and starting out modestly (in decent housing that meets your needs) can lead to owning those dreams — in time.

Start saving
Get your priorities straight. Without taking all the fun out of life, what’s more important to you, weekends on the road and dinners out or stashing away at least part of your down payment? (Most lenders want to see that some of the money you invest is your own.)

Keep your credit record clean
When you go mortgage shopping, lenders will be looking over your payment records. Don’t let a late-payment habit rise to haunt you. (Reformed late-payers can request creditors to erase the blots on their records — for a small fee.)

Look for financial assistance
Your parents and other relatives may be able and willing to give you gifts that will get you over the down payment hurdle. (Loans from relatives will be counted as debts and will lower the amount of mortgage payments your lender will allow you to carry.)

Get some co-signers
Parents, relatives (and unrelated investors) can either co-sign a loan or share the ownership of your home. With shared ownership, you’ll be the resident but your co-investor may share specified expenses (plus tax advantages and equity accrual), and will share in your profit on sale.

Shop for mortgage loans
Qualifying for a mortgage can be managed in several ways to fit your down payment and monthly-payment abilities. FHA and VA loans come with low down payment requirements, and lenders offer ARMs (adjustable-rate mortgages) at initially low interest rates. (Look for an ARM that can be converted to a fixed rate should rates drop.)

Consider creative financing
Also, new-home builders and other sellers may offer buy-downs that lower your interest rate in the first few years of a mortgage, thereby making a home more affordable. Balloon loans (if they have at least a 7-year term) can often bridge gaps and give you time to accumulate equity and/or cash to pay them off. Home sellers can sometimes help you financially — with a lease-purchase arrangement or a take-back loan. Lenders and sellers are constantly creating new ways to help buyers buy homes. We can help you check them out.

Look at starter homes
Once freed of the vision of “instant dream home,” you can look for housing that will start you on the equity-building path to realizing your dream. Condominiums and townhouses are often much less expensive than detached houses and buying one now can serve well as a stepping stone.

Search for bargains
If you’re handy with tools, a fixer-upper home gives you the opportunity to buy inexpensively, fix up and, in a few years, trade up. And if you’re adventurous, auctioned properties in suitable neighborhoods can also be good values. If you don’t mind a longer commute to work, outlying areas frequently offer homes at lower prices than those found close to town.

Whatever route you choose toward buying your first home, keep cool. It may take time to find the right combination of elements, but there is a home out there for you and a way to obtain it. We’ll be most happy to help you create your path to its door.

Call or e-mail us for more information on buying your first home.

Planning well ahead can help ease relocation stress. By mapping out the process, each step will become more predictable and manageable. Also, be sure to keep communications open and frequent among family members and with outsiders who can help.

Allowing your home to go in to foreclosure is like getting in to a severe credit crash while a short sale is a credit fender-bender.

We’d like to put our expertise on your side and at your service. Your calls and e-mails are always welcome.

North Brunswick - $525,000. New construction. Don’t miss a visit to this 4BR/2+BA two-story. Among its features are central heat/air, pantry and ceramic tile baths with Dual Vanities, soaking tub. Large & livable. Cathedral ceilings, energy-saving thermal glass, formal dining room. Basement. An unusually nice haven for a comfortable lifestyle. http://www.era.com/fast/2235790

North Brunswick - $500,000. Lead a serene life in this nicely-kept 3BR/3BA Colonial near public transportation- recreation- schools. Lovely flourishes include two-car garage, newer furnace and deck. A generous-sized home that suits all needs. Two-story foyer, cathedral ceilings, energy-saving thermal glass. Subdued recessed lighting, fine master suite, attractive large bedrooms. Family room with fireplace and wet bar. Ceramic tile baths. Finished basement. An inviting choice with many fringe benefits! For those who believe in Vaastu Shastra, this house is perfectly located/designed in all respect as required. http://www.era.com/fast/2417423

North Brunswick - $515,000. Come feel the hospitality of this engaging 4BR/2+BA Colonial on a shaded cul-de-sac near public transportation. Ideal offerings include formal dining room, center hall and central vacuum system. Big & bright, with companionable comforts. Foyer, Andersen windows, heat-saving thermal glass. Custom blinds, jacuzzi, generously large bedrooms. Ceramic tile baths with Dual Vanities, spa, 2nd-floor laundry, underground utilities. Two-car garage, basement, deck. Large front porch, full landscaping. Here’s a jewel featuring neat extras. Superbly-kept. http://www.era.com/fast/2429597

North Brunswick - $445,000. Dollar-smart, 3-bedroom three-story on a tree-fringed street near recreation- bus- schools. Among its features are finished basement, ceiling fans and hardwood & tile flooring. Vaulted ceilings, ceramic tile baths, formal dining room. Washer/dryer, central H/A. Two-c