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First Time Homebuyer's Guide to Closing Costs

Written on 10-Sep-2009 by homesforsaleinminnesota

Closing costs play a major factor in every home buying contract. Most first time homebuyers do not realize how significant closing costs are in a home's final price; some can go as high as 15 percent. Lenders may often require buyers to pay for these costs upfront while some lenders include closing costs into the buyer's loan. Recognizing what these costs are as early as possible will help homebuyers budget their funds and even negotiate for a lower contract price.

Homebuyers have to keep in mind that lenders base their maximum loan amount not on the net price or the difference between sales price and closing costs but on the sales price of the property. Closing costs can be assigned differently and you can ask your Realtor and lender to assemble a deal that will work best with your budget.

The first step in understanding closing costs is to learn what buyers are typically responsible for. Barron's 'Smart Consumer's Guide to Home Buying' explains that it's important to understand that custom - and not law - dictate how closing costs are allocated and what the buyer and seller are required to pay as part of the contract.

Buyers are responsible for paying all fees and discount points of the loan. These costs are usually added by the lender at the end of the contract and the costs may vary depending on the financial institution. Bankers sometimes waive these fees for favored customers or as part of the contract, however, you still need to estimate these costs as early as possible during the loan financing process.

Paying the homeowner's title insurance policy premium is also the responsibility of the buyer. This has to be paid first even before the home purchasing process begins in most cases. It would be better to pay for this premium upfront so that it won't be included into your loan package. The premium differs with each insurance company so do some research on insurance policy rates for homeowners and shop around for the best deal.

The following costs are usually the responsibility of the seller. Commissions on sales - commissions are given to agents of both the buyer and seller. Commission payouts are set depending on the buyer's and seller's agreements with their respective agents.

Cost of Inspections - The seller is responsible for all home testing and inspections before any contract is signed.

Title's insurance - Insurance on the title are traditionally shouldered by the seller as part of closing costs. Many first time homebuyers incorrectly assume that they need to take care of these costs.

Recognizing each component of the closing costs can give any homebuyer an accurate estimate of the final contract price. You can ask for an estimate from your lender way ahead of the signing date as most are willing to breakdown all these costs and explain how they fit in your loan package.

Homebuyers looking for MN houses for sale can go online and search for properties by price, location and neighborhood by using the Minnesota MLS to find properties throughout the state.

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First Time Home Buyers - Understand the Fees Associated with Maintaining A Home

Written on 29-Jul-2009 by homesforsaleinminnesota

First time homebuyers should understand the fact that each kind of home has different maintenance costs associated with them. Knowing what these costs are can certainly help buyers make an informed decision.

Certain types of homes incur neighborhood association fees or extra taxes and fees imposed by the town or city government; knowing what these fees are in the early stages of your new home search can help you make the best decision given your budget requirements or limitations. Here is a basic breakdown of maintenance costs associated with different types of homes:

1. Condominiums:

An increasingly popular choice for first-time homebuyers, living in a condo means you have access to shared living spaces and amenities. As a result, you'll be responsible for paying association fees and maintenance fees that are based on a percentage of ownership of the building.

The total expenses of the building is divided by a resident's percent of ownership to arrive at the maintenance cost for each resident, explains Ilyce Glink, author of the book '100 Questions Every First-Time Home Buyer Should Ask'. This cost also includes a payment for a building's emergency reserve fund, which varies over time.

2. Townhomes:

Townhomes, also known as 'row houses', are independently owned homes that typically don't incur fees beyond your regular expenses. However, some townhomes are part of a homeowner's association, in which case you will need to pay a monthly fee for maintenance. This fee typically covers the cost of painting the exterior and landscaping common areas.

3. Mobile and Pre-fabricated Homes:

Homeowners of mobile and pre-fabricated homes shoulder all fees in operating and maintaining their homes. These fees are comprised of, but not limited to, water, sewage and garbage, electricity, cable and other services. But some mobile home parks do charge a fee for renting land space. In addition, each park has specific requirements and rules that a homeowner must first agree to.

4. Single-Family Home:

Also known as detached houses, maintenance costs of these houses are solely the responsibility of the homeowners. Single-family homes may also be located inside a community or a village though homeowners will still be responsible for all costs such as maintenance and repairs, lawn upkeep, electricity, water and sewerage services and other utilities.

If you are considering to get a loan, remember that some lenders might package some of these maintenance fees into your loan. I advise that you first talk with your Realtor and determine the maintenance costs for the house you're interested in. Only then should you deal with a lender so that you can get the best possible loan package that is within your budget.

Whether you're interested in a town home or a single-family house, there will be several costs involved with home ownership and maintenance. When you're searching for the right fit, consider making a checklist or worksheet that lists all of the different home options and related fees. Having a side-by-side comparison of the total costs involved can help you make the most informed decision for your new home purchase.
When searching for Minnesota homes for sale, the internet is an invaluable resource. New homebuyers can use the MN MLS to view active listings of homes and real estate throughout the state.

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Tags: mn mls,homes for sale in minneosta,home maintenance

Basics of Buying a Home - Differences Between Different Home Types

Written on 13-Jun-2009 by homesforsaleinminnesota

First Time Home buyer? Read this first to help you out in the home buying process.

No matter where you are in your life, buying a home may be in your very near future. National statistics indicate that most people move between five to seven times during their lifetimes, which means you're likely to move at least once every 5-10 years.

There are different types of homes that can match the unique needs of buyers. There are condominiums suited for the budget and lifestyles of bachelors and newly weds. In contrast, single-family detached homes have the space that can accommodate a large family. Always consider what each type of homes offers and how can they fulfill your needs when looking to buy a new home.

1. Condominium

Condos are perfect for those who are looking for an affordable way to live in a city. Condos became popular during the 70s and buying one does not mean you actually own the unit in the strictest sense, explains Ilyce Glink, who wrote the book '100 Questions Every Home Buyer Should Ask'. Instead, you are investing in the shared properties of the complex such as the stairs, walls, flooring and ceilings.

2. The Townhouse

Townhomes are also known as 'row houses' because they're grouped together with shared walls. Some townhomes require you to join a homeowner's association to cover the cost of common areas such s the parking lot, laundry room and fitness centers, but town homes are very similar in ownership status as a single-family home.

3. Single-Family Detached Homes

These homes come in a wide range of floor plans, styles and sizes. Single-family detached homes can be built on separate lots or be part of a community. In addition, almost all single-family detached homes have independent ownership and maintenance responsibilities. This just means that the owner incurs all fees for the upkeep of the home.

4. Mobile Homes

Mobile homes are designed to be moved whenever needed, so you never purchase the land that the home sits on. Mobile homes are fully equipped with basic home amenities and appliances, and can be an affordable alternative to purchasing a regular home.

5. Pre-Fabricated Homes:

These are pretty much the same as mobile homes as both of them can be moved from one place to another. In addition, pre-fabricated homes generally rent out the land they sit on. Pre-fabricated homes however are superior to mobile homes with regard to building materials and construction.

Knowing the pros and cons of each type of houses will help you in searching for a home and arrive at an informed decision.

Anticipating your future wants and needs will also aid you in your decision. Know what your medium to long-term goals are, or your plans for the next five years, and treat your home as an investment. If you're single then maybe a condominium is the right home for you since it is affordable and will allow you to have an urban lifestyle. But if you have a family and want stability, you want to consider settling in a single-detached home or a town home as these have ample space to sustain your entire family.

Homebuyers looking for houses for sale in Minnesota for sale can go online and search for homes by price, location and neighborhood by using the Minnesota MLS listings to locate properties throughout the state.

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Tags: houses for sale in mn,minnesota houses for sale,mn mls