Choosing the Right House Cambridge MA
Choosing the Right House
Experienced and first-time buyers run into the same types of problems when buying a house, however first-time buyers are often more likely to miss important details.
For example: it is a good idea to buy a cheap house on a nice block, but make sure that it will not take five years of remodeling to make it a good home.
Experienced buyers recognize that there is a difference between a house that need structural fixing up and a house that needs a little cosmetic work. There is a big difference between needing to replace the carpet in the dining room and paint a few rooms and having to rip out all of the pipes to replace them with new plumbing. If you cannot tell the difference between structural and cosmetic, then it is in your best interest to consult someone. On the other hand, when selling a house, it is best to make the house shine.
Coming up with a down payment for the first time can be a pretty difficult task. The new growing trend, however, are zero-down loans, according to the National Association of Realtors. Yet being one hundred percent leveraged in one’s home may not be the best solution to financial woes. A Dallas broker warns, however, that “Borrowers are at greater risk today because they are over-extended.” Zero-down loans deal with higher interest rates and mortgage insurance.
First-time homebuyers benefit from the government in that in many cases there are grants available that will help with down payments and closing costs. Currently, federal FHA loans require a two to three percent down, but it has been proposed for 2007 that a zero-down program be available for buyers with good credit.
Bridging the Gap
A bridge loan is for more seasoned buyers who must oftentimes take out two mortgages because they are faced with the predicament of having to sell their home at the same time as buying their new one. The best solution for these buyers is to allot plenty of time for a smooth transaction on both sides. The bridge loan allows a buyer to pay for a down payment until he/she can pay for it when his/her home sells.
For a bridge loan to work, you must use the same lender to sell your current house and buy your new one. The term for a bridge loan is one year and once the sale of your home is complete, the loan is paid in full.
Bidding for a house can be stressful in a competitive market. Often buyers will have to pay more than the asking price to acquire the home they want. Contingent free offers are common in these situations where an “escalator clause” allows the price to increase if the competing party makes a higher offer. You must specify how high you are willing to go.
Experience is always an asset within the real estate market and it is good for new buyers to seek out wisdom from seasoned buyers.
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