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As you move forward with your home purchase, your real estate agent may recommend that you have your home inspected. Sometimes the inspection is required by the lender or insurance company, but sometimes it’s an optional step. Buyers who have the option sometimes consider skipping the inspection to save a little cash. Before you say “no” to the inspection, consider these reasons that it may be an important safety measure to take.
1. The Ability to Walk Away
When buying a home, you want to be completely sure that you’re not buying a home with problems that will cost you thousands after closing. Making an offer contingent on the results of an inspection allows you to legally walk away from your purchase contract if the inspector finds a serious issue. Without an inspection and this contingency, your offer is legally binding, and walking away is a costly choice.
2. Ensure Your Home Is Safe
Home inspectors know how to find problems that aren’t clear to the naked eye. From electrical wiring problems to hidden mold or problems with the home’s structure, knowing about these issues will protect you from buying a home that’s not safe to live in.
3. Improve Your Negotiating Position
If the inspection finds something wrong with the home that will be costly to fix, you can still buy the home if you wish. Armed with the information from the inspection, you can ask the seller to make repairs or give you a different price to cover the problems found. For instance, if the roof is in need of major repair, you can make a new offer that requires the seller to make those repairs, or you can offer at a lower price, using the difference to cover the repairs. Your real estate agent will help you understand the requests that are reasonable as you craft a new offer.
4. Enjoy Peace of Mind
A home inspection gives you peace of mind that you are buying a quality home. When the inspector gives it a stamp of approval, you can know that you are unlikely to have serious surprises when you move in.
5. Find Pest Problems
You don’t want to move in only to discover termites or roaches in the home. Pests can often go undetected until a serious infestation is present, but an inspector knows how to find the hidden signs of pests. Finding pests doesn’t mean you need to avoid the home, but it does mean you should ask the seller for professional pest control measures before you close on the property.
An inspection is an important step when buying a home. The cost of the inspection is small in comparison to the peace of mind and protection it brings. Even if it’s not required, make sure you request an inspection on your next home purchase.
One of the best things that you can add to your home is a solar power system. These can be costly but they save you a lot in the long term on utility costs. While government programs have scaled back for these energy saving improvements over the years, there’s still many benefits to them. You can even get a loan specifically for installing solar power to your home.
Before you take the leap, you’ll want to know for sure if solar will really add value to your home. Of course, you want a return on your investment.
The good news is that there’s no doubt about it that installing solar panels does definitely add value to your home. There’s one caveat to the value: You should own your solar power system as opposed to leasing it through a solar company or a power purchase agreement.
Homes that have solar panels sell for more money simply because they offer a definite return benefit to the future owner.
Does A Leased Solar System Offer The Same Benefits?
Owning your solar system will save you more money in the long run than leasing your system. When you own a solar power system, the FHA requires that the total value of your solar system be added to the total value of your home when you go to sell it. If you lease the panels, this value cannot be added to the home during an assessment.
If you have financed the system, the rules may be a bit more lenient. While you technically don’t own the system, you are paying towards owning the system yourself. Each lender will have their own standards for this, so check with them for specifics, as your home must meet certain standards and eligibility requirements.
Securing A Mortgage With A Leased Solar System
If someone is looking to secure a mortgage with a leased or currently unowned solar energy system, there are a few hurdles that you might face through the process. These problems include:
Solar lease payments must be included in the buyer’s debt-to-income ratio.
The panel owners must have a third-party insurance to cover damage to the property that’s being mortgaged in the event of malfunction or faulty installation of the panels.
Solar Panels Are An Overall Great Investment
It’s really hard to go wrong if you purchase or finance your solar panel system. As long as you own the system, value will be added to your home. You’ll also save on your own utility bills. Your home will undoubtedly become more attractive to buyers if you decide to sell your home in the future.
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In general, if you have less than 20 percent of a down payment for the house you want, you will have to pay private mortgage insurance (PMI). This insurance is a cost to you to protect the lender if you default on the loan. In most cases, it’s better to save the 20 percent down payment, but if you absolutely cannot do that and rent is costing you more than a mortgage payment even with PMI tacked on, then it’s better to buy and pay PMI. Another reason to pay PMI is if you have the 20 percent down payment, but you are buying a house that needs some work — you can make a lower down payment and pay PMI so you have more cash for repairs.
Avoiding PMI
You can avoid paying private mortgage insurance in three ways:
Make a down payment of 20 percent or more of the purchase price;
Get a loan backed by the VA or the Department of Agriculture; or
Get a loan that has PMI, but make sure you can cancel it as soon as you get 20 percent in equity built up.
The easiest way to get the 20 percent down is to put money in a savings account that pays high interest. Put what you have for a down payment in the account, then add money to it every month. Some people find it easier to put $50 per week, while others might want to put a lump sum in the account once every month.
With the VA and Department of Agriculture loans, you have to qualify for these loans. Sometimes your only option might be to get the loan with PMI, but make sure you can stop paying PMI once you have 20 percent in equity. Making extra payments on the principle is one way to get equity to build up faster.
Types of PMI
Your lender has five types of PMI to offer you. The most common is borrower-paid mortgage insurance. This is usually a monthly fee that is combined with your mortgage payment. You need to get 22 percent equity before your lender drops BPMI. You also have to be current on your mortgage payments. Some lenders will cancel the BPMI at 20 percent equity if you ask.
Single-payment mortgage insurance is PMI that you pay in one lump sum at closing. In some cases, the lump sum might be divided into equal payments and paid with your mortgage for the year. If you pay this mortgage insurance up front, your monthly payments are lower. However, if you sell your house or refinance it, you won’t get any part of your premium back.
Lender-paid mortgage insurance means that your lender pays for the PMI. However, your interest rates are higher to make up for those payments, so technically, you are still coming out of pocket for it. Because this type of PMI is built into the loan, you can’t cancel it when you have enough equity. And, your interest rate won’t go down, either. The one benefit of lender-paid mortgage PMI is that even with a slightly higher interest rate, your payments are most likely going to be lower.
The fourth type of PMI is split-premium mortgage insurance. This is a combination of buyer-paid mortgage insurance and single-payment mortgage insurance. You pay this insurance in two parts: One part in a lump sum at closing, then the balance is worked into your mortgage payments. You don’t need a huge lump sum at closing and your mortgage payments will be lower than if you were to have BPMI.
Finally, Federal Home Loan Mortgage Protection, or MIP, that is mortgage insurance you can get if the Federal Housing Administration (FHA) underwrites your mortgage. If you have a down payment of 10 percent or less, you will pay MIP in the form or an up-front payment plus extra payments worked into your mortgage.
Every home seller wants to enjoy a positive property selling experience. Yet ensuring your home selling strategy goes according to plan may be difficult, particularly for a seller who lacks property selling expertise. Lucky for you, we're here to provide the help you need to achieve the optimal results at each stage of the home selling journey.
Now, let's take a look at three tips to help you reap the benefits of a positive home selling experience.
1. Set an Aggressive Initial Home Asking Price
How you price your home will have a significant impact on how quickly your residence sells. If you establish an aggressive initial home asking price, you should have no trouble stirring up plenty of interest in your residence as soon as your home becomes available.
Check out the prices of available houses in your area that are similar to your own residence. Then, you can establish a price range for homes in your area and price your house accordingly.
Furthermore, it often helps to evaluate the prices of recently sold houses in your city or town. With this housing market data at your disposal, you can find out whether you're getting ready to sell your home in a buyer's or seller's market.
2. Remove Clutter
Clutter is problematic, particularly for a home seller who wants to streamline the property selling cycle. Fortunately, home sellers who identify clutter now can eliminate this problem before they list their houses.
Antiques, paintings and other excess items inside your home should be removed. You can always rent a storage unit, which will enable you to keep these items safe until you sell your house. Or, you can host a yard sale or sell excess items online prior to listing your residence.
Don't forget to remove lawn decorations and other clutter from outside your house as well. By doing so, you can instantly improve your house's curb appeal and increase the likelihood of a fast, profitable home sale.
3. Consult with a Real Estate Agent
A real estate agent is prepared to do everything possible to ensure you can enjoy a positive house selling experience. In fact, this housing market professional will offer plenty of support at each stage of the home selling journey.
Usually, a real estate agent will meet with you before you list your house. He or she then will craft a home selling strategy designed to help you accomplish your home selling goals. Next, a real estate agent will promote your house to dozens of potential buyers, set up home showings and open house events and keep you up to date about any offers to purchase your residence. And if you decide to accept an homebuying proposal, a real estate agent will guide you through the home closing process.
Ready to reap the benefits of a positive home selling experience? Take advantage of the aforementioned tips, and you can seamlessly navigate the home selling journey.
Selling a home may prove to be an uphill climb. Fortunately, if you craft a home selling strategy, you can eliminate guesswork throughout the property selling cycle.
A home selling plan is a must-have, and perhaps it is easy to understand why. This strategy enables you to prepare for potential hurdles you may encounter as you promote your residence to buyers, review an offer to purchase and perform other house selling tasks. Plus, if you allocate time and resources to develop an effective strategy, you could streamline the process of selling your residence.
There are several things you can do to ensure your home selling strategy will deliver the best-possible results. Now, let's take a look at three tips to help you craft a top-notch house selling plan.
1. Analyze Your Home
What you originally paid for your house is unlikely to match your home's current value. Luckily, there are various assessments you can use to evaluate all areas of your residence.
A home inspection enables you to identify any underlying house issues and correct such problems before you list your residence. Or, you can always hire a home appraiser who can give you a property valuation.
When it comes to selling a home, it helps to prepare as much as you can. If you conduct a home inspection and appraisal, you could gain valuable insights so you can set a competitive initial asking price for your residence.
2. Upgrade Your House's Interior and Exterior
Your home may have flaws, but you can address these issues right away. By doing so, you could make your house an attractive option to buyers.
Clean each room of your house. Also, eliminate clutter so you can show off the full size of your house.
In addition, mow the lawn and perform other home exterior updates. If you boost your house's curb appeal, you may be able to differentiate your residence from the competition – something that could result in a quick, profitable home selling experience.
3. Collaborate with a Real Estate Agent
A real estate agent understands what it takes to develop a house selling strategy. Thus, he or she can help you craft a home selling strategy and put this plan into action in no time at all.
Typically, a real estate agent meets with a house seller and learns about this individual's property selling goals. A real estate agent next creates a plan designed to help a seller quickly achieve the optimal results.
A real estate agent offers plenty of guidance throughout the house selling journey too. Therefore, if you are unsure about how to showcase your residence to potential buyers, a real estate agent can deliver support. On the other hand, if you are uncertain about whether to accept or reject an offer to purchase your home, a real estate agent can provide an honest, unbiased recommendation.
Use the aforementioned tips, and you can instantly create and implement a successful home selling strategy.
