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buying a house

Moving To A New City and Buying A House-Follow These Steps

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buying a house in a new city

If you’re trying to relocate and but a house at the same time, it’s a challenging task. Coordinating a move can be surprisingly stressful. Add to that the challenges that can come with purchasing a house when you don’t already live in that area, and you could easily become overwhelmed. Luckily, the situation isn’t impossible. If you’re buying a house in a new city, follow these steps to achieve success.

Estimate Costs Before Buying A House In a New City

First and foremost, you need to get a firm grip on what you need to spend both for your move and your new home. Packing up and heading to a new city can be incredibly expensive, and often involves costs people don’t expect.

Spend time gathering accurate numbers for your moving costs. This includes moving company or truck rental fees, packing materials, storage units, and anything else you might have to cover before you get settled in a new house. Then, set that amount of money aside, ensuring you don’t spend it on anything else.

Once that is done, you’ll have a good idea of what you have left for home purchase costs. Along with a down payment, you need funds to cover your earnest money, home inspections and appraisals, closing costs, and anything else that you either have to or want to handle with cash.

After completing those calculations, you need to do more math and figure out how much you can spend on the house itself. You need to factor in all costs, such as the mortgage payment, insurance cost, property taxes, and more. At that point, you’ll know what price point you can look at when you start your home search.

Research the Housing Market and City’s Neighborhoods

Once you know your budget for buying a house, it’s time to figure out what your money can buy. Get online and conduct some searches based on what you can afford to spend. See if you can easily find options in that area or if your choices are limited. For example, can you get into any neighborhood or just some of them? Can you live in the city, or do you have to look to others outside of your target destination?

You’re not trying to find the right house yet. Instead, you’re striving to understand what your money will or won’t get you. If it turns out that you have to stick with specific neighborhoods, then you’ll want to shift your research efforts and learn as much as you can about those areas. This can include anything from crime rates to school district performance statistics. You should also look at employment rates, local job opportunities, commuting and public transit options, walkability scores, access to core amenities, and anything else that influences your quality of life.

Take a House-Hunting Exploration Trip Before You Move

Ideally, you want to be able to see what the various neighborhoods have to offer in person before you commit to a house. By scheduling a house-hunting trip in advance of your move, you can explore the areas where you are likely to buy and even look at some available properties.

Connect with a realtor that specializes in your target area. Have them find a few listings that align with your criteria and take a day to explore them. Make sure you also leave room in your trip for some excursions alone. You want to see what these neighborhoods are like not just in broad daylight (when you’ll probably be touring houses), but also at night. Similarly, checking out the locations on weekdays and weekends is wise.

Go to the City to Find Your Ideal Home

In many cases, you’ll need to make multiple house-hunting trips before you actually move. But, once you select target neighborhoods, that doesn’t mean you should buy a house in that area site unseen. Instead, it’s best to make a trip before you make an offer and see it in person. That way, you won’t be caught off-guard by something that wasn’t in the listing’s pictures.

Make Your Choice Well Before You Move

It’s important to understand that it typically takes 30 to 45 days to close on a home once the processing starts. However, it can go longer, especially if there are any unique aspects to your application or something unexpected occurs. For example, if your home inspection reveals a problem you want or need the seller to fix, that may result in a delay if it takes time for them to address the issue.

That timeline doesn’t factor in a few other activities as well. If you have a back-and-forth with the seller about the price, that can add days or weeks to the process. Similarly, any time between making an offer and it being accepted isn’t in that 30- to 45-day window either. For regular sales, that can add a couple of days. With a short sale, waiting for a reply to an offer can take several months. Foreclosures may only take days for an offer to be accepted but can take longer as well.

You need to take those timelines into consideration. If you don’t, then you may end up in your city without a place to live. If that happens, you could get stuck in hotels or a short-term rental.

Ideally, you want to be able to get the process well underway before you actually move. Otherwise, make sure to have a backup housing plan, just in case everything takes longer than expected.

 

Do you have any tips that can help someone buying a house in a new city? Share your thoughts in the comments below.

 

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Buying a House? A Credit Union Mortgage Might Be Best

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home mortgage

You have so many different options for banking today. In addition to traditional banks, there are online-only banks. You can invest with robo-advisors and apps. If you need money, you can get a personal line of credit or set up a Go Fund Me account. With so many options available, it can be difficult figuring out what the best choice is at any given time. If you’re looking for a home mortgage, then you might want to consider going with a credit union. They’re almost always cheaper than a traditional bank for mortgage loans.

What is a Credit Union?

A credit union is a type of bank. However, a regular bank is owned by a company or corporation. For example, Wells Fargo and Bank of America are regular banks.

In contrast, a credit union is a co-op. When you join a credit union, you become a member who partially owns the credit union. Therefore, credit unions tend to work harder than traditional banks to secure the best options for their members. After all, the members themselves own the bank.

Credit unions historically served particular groups of people. For example, there are firefighter’s credit unions and teacher’s credit unions. However, today, you can find a credit union for just about anyone. For example, San Francisco Credit Union is open to any resident of the city.

You Get More and Pay Less at a Credit Union

A traditional bank is a for-profit company. In contrast, a credit union is non-profit. As a co-owner of the bank, the extra “profits” or benefits go back in your own pocket. Therefore, you get better rates and lower fees when you use a credit union instead of a traditional bank.

In terms of rates, you get more interest. For example, if you open a savings account at a bank and open another at a credit union, you’ll most likely discover that you earn more interest on the credit union savings account.

In terms of fees, you often find that you aren’t charged for things at a credit union that a typical bank would charge you for. ATM fees, overdraft fees, and similar charges are often not a problem at credit unions. Of course, each credit union is different, so you’ll always want to check the terms of your own account. Don’t assume anything. Generally speaking, though, you’ll pay less and earn more when banking with a credit union.

People Choose Credit Unions for Loans

Although there are benefits to opening a checking/savings account with a credit union, the real reason that people opt for credit unions is often because of the loans.

First of all, if you’re already a member of the credit union, then loan approval usually happens very quickly. You can apply to become a credit union member just to get a loan. However, you’ll have the best luck if you’re already a member. Therefore, if you know that you’ll need a loan in the near future, you might want to set up a checking and/or savings account with the credit union first.

More importantly, credit unions often offer the best rates for loans. If you were to apply for a loan through your regular bank and also apply for one through your credit union, chances are that the interest rate would be a lot lower on the latter than the former.

In other words, you can borrow money more easily from a credit union, and you won’t have to pay back as much in interest. Of course, your credit history will still play a role in the decision process for a loan. However, your credit union will also consider other factors, which your regular bank may not. They’re more people-friendly and consider different human circumstances. Therefore, if you have irregular or non-traditional income, a higher-than-average debt-to-income ratio, or some other credit history quirk that would cause another bank to turn you down, then you might have better luck with a mortgage company.

Get Your Mortgage Through a Credit Union

You can get any number of different types of loans through a credit union. However, it’s an especially good choice for people who need to get a mortgage. After all, a mortgage is probably the most significant loan you’re ever going to get. When you’re taking out that money, to be repaid over such a long period, it’s critical to get the best rate possible. You’ll find better rates at your credit union than through a regular bank.

The most important difference is the interest rate. When you’re taking out such a huge loan, even a small percentage difference can make a huge impact on how much you end up paying overall. But that’s not the only way you’ll benefit when you get your mortgage through a credit union. You might also find that your closing costs are significantly cheaper. When you work with a traditional bank (or a mortgage bank), you work within a system that’s designed to rack up the fees. When you get your mortgage through a credit union, you work within a system that’s designed to give you the best rates.

Plus, you get the personal touch that banks just don’t offer. When you buy a house, especially for the first time, it’s a really huge decision. It’s confusing. You will probably have a lot of questions. And while you can certainly get many questions answered by your real estate agent, it also helps to have your financial team on your side. Your credit union will go the extra mile to provide customer service that helps you understand each step of the process, what your options are, and how to make the best decisions as you buy your home. They’ll also help you with funding a non-traditional home that other banks might turn their noses up at.  Good place to start looking is here.

A Mortgage is a Long-Term Relationship

No matter how long you have an account at a regular bank, it usually feels like an impersonal service. In contrast, you truly build a relationship with your credit union over time. This is particularly important as a homeowner. Inevitably, you’re going to need some additional financial help for your home. Perhaps ten years down the line you’ll need to replace the roof. Maybe you’ll grow your family and want to add on to the home. Or maybe you’ll just need money for something else, and you’ll want to refinance your home to get that cash. Whatever the reason, you’ll have a better chance of getting a great home-related loan if you’ve established a relationship with your credit union over the years. Getting your home mortgage with them and paying it off consistently is a great way to establish that relationship.

Plus, your credit union is likely to stick with you throughout the loan. Many traditional banks sell and re-sell their loans over time. As a result, you might start out sending payments to one company only to find a few years later that your checks need to go somewhere else. While that’s usually not a big deal, it can feel like a hassle when it happens. Things can go awry. Moreover, you can really start to feel like you don’t know who’s dealing with your money. You don’t have those issues when you work with a credit union, which is typically unlikely to sell your mortgage.

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Should We Buy a House Next to a Cemetery? (Your Advice)

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house next to cemetery

When purchasing a house, there are a lot of considerations to take into account before making the purchase. This reader writes wondering if their dream house is ruined by a single (but major) fault.

We have been looking for a new house for about six months now. We finally found what I would consider to be our dream house in every aspect except for one problem. The house is located right next to a cemetery.

This does not bother me or my husband in the least bit, but I have heard from other people that it is considered an “incurable defect” that may make it very hard to sell in the future. Because we consider it to be our dream house, we have no thoughts of selling, but I also know that things change and we may have to sell years down the line if our circumstances change.

Do you think that having a cemetery next to the house will greatly reduce the appreciation value for future years? We know that it will have some impact on the price since the sellers are offering it at a lower price than comparable houses in the area. I think that we can even negotiate the price down more if we want. But if the house appreciates at a similar rate as other houses in the area and we give the discount that we receive, I don’t see how this could be a bad thing. Am I missing something in the equation?

Would you advise this couple to purchase their dream house even with it being next to a cemetery? Why or why not?

What is the Best Age to Buy a House?

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best age to buy a house
Millennials have historically been the generation to change tradition. When it comes to home buying, that is no different. While many people may think your early-to-late 20s is the best age to buy a house, many millennials are waiting longer to settle down, have a family and buy a home. So, if that’s the case, when is the best time to purchase a home?

What is the Best Age to Buy a House?

There is no black-and-white answer to this question. Like many other personal finance topics, discovering the best age to buy a house may differ from person-to-person.

Young Home Buyers

When it comes to buying a home, you have to be at least 18 years old to sign the legal documents necessary. Other than that, there is no “best” age to buy a house.

Millennials were kind of slow coming into the home-buying market, compared to previous generations anyway. Many publications, such as Bloomberg, reported that millennials seemed to have no interest in buying homes. They wanted to rent.

This generation wasn’t stalling on buying their home for a bad reason though. Most millennials are waiting longer to get married and have a family and didn’t need the space yet. They were also facing a fairly tight existing-home market.

With the tight market and simply waiting until later in life to start a family, millennials have had more time to save. This has put them in a position where they are able to afford a hefty down payment and purchase some pretty fantastic starter homes.

Toll Brothers Inc., a luxury home builder, has reported that 23 percent of their current revenue stems from millennial buyers. Considering the median price of a home built by Toll is over $800,000, that’s not too bad! At the same time, many millennials are also purchasing homes that are more practical for their current needs (like tiny houses). So, if millennials are buying expensive homes and tiny houses, what is the best age to buy a house?

Things to Consider Before Buying a House

While many say your 20s is the best age to buy a house, there really is no “perfect” time unless your situation allows for the purchase of a home. If you’re considering buying a home in the near future, bear these things in mind:

  • Why do you want to buy? Before you consider buying a home, evaluate your reasoning behind wanting to buy. It is a huge investment and shouldn’t be taken lightly. If you’re buying a house just to have a house, you may want to think twice.
  • Do you know what you can afford? After you know why you want to buy, evaluate what you can afford. This will mostly be determined by how much you make and the area you live in. Check out this piece on how much you need to make to afford a $1 million home.
  • Will you stay there five years or more? If you’re not going to stay in the house for at least five years, don’t buy. Wait until you’ve settled down a little more and then purchase a home. After all, it is an investment and a 30-year investment for most. Not to mention, you likely won’t be able to make the money you need when reselling.
  • Do you have emergency savings? Being a homeowner means that you may come into some emergency repairs. Say the kitchen sink needs to be fixed, or the furnace needs to be replaced, having emergency savings can prevent you from falling into a financial rut.
  • Have you saved for a down payment? A huge part of deciding when the best time for buying a house is is whether or not you have the cash saved for a down payment. To avoid costly private mortgage insurance (PMI), you’ll need to put down around 20 percent.
  • Have you interviewed real estate agents? Once you’ve done the research, saved the cash and decided you’re ready to buy a home, it’s time to decide who will help you find your new place. You’ll want to find a real estate agent that you get along with and truly understands what you want for your new home. You can ask for references as well, to see how they’ve treated previous clients. After all, you will be paying them for their assistance in finding your new home.

No matter what, buying a house is a serious investment and should be treated as such. While there is no “best” age to buy a house, there is definitely a right time to do so.

How did you decide when you were ready to buy your first home? 

Photo: Cash Crate

Why Should You Save?

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Why You Should Save

There has always been importance placed on saving money, but why? If you have enough money to pay for what you need, then why do you need “excess” money to put aside? Well, everyone saves for different reasons, and if you are still looking for one, here are a few reasons you should be saving right now.

Vacation

What better reason to save than for a vacation? If you’ve wanted to go away for a while, go on a cruise or visit a city you’ve never been to, it takes some planning (and saving). You can have fun with your money, but you have to save to be able to do that.

Retirement

Even if you are young, it is never too early to start saving for retirement. No one wants to work forever, and most people aren’t able to work once they get older. Putting aside money so that you’re able to retire is important. This is often hard because you won’t see this money for many years, but it will be well worth it.

Emergency Fund

Everyone needs to have a savings account where they set aside money for emergencies. Whether it is an unexpected flat tire, car repair, medical bill or even unexpected charge on your bank account, you should always have some extra money set aside for emergencies. If you do not, many people use their credit cards if they do not have an emergency savings account, which leads to more debt, which is not ideal. Usually, you’ll want to have about $1,000 set aside in this account just in case. This will cover most car repairs and many other emergency situations. Once you use it, you need to work to save it back up.

Buying a House

Another reason to save is so that you can buy a house. Renting a home or an apartment is practically like throwing money out of the window. Sometimes, renting is all someone can afford or all they can get with their current situation, which is fine. However, if you are able to, you should save for a down payment on a home. Owning a home will pay off in the long run, so your saving efforts and the amount you spend on a home will be well worth it.

New Car

Just like a house, you can save to buy a new car, or save to pay off your car. If you currently have a car payment, your budget can become a lot more free if you set aside some money to pay off your car (or buy a car in full if you don’t have one yet). Usually, if you have the full amount to put on the car, the dealership will also strike you a deal, which is another great reason to save.

These five reasons to save are only a few. Everyone has their own reasons for saving, so it is important to discover what means the most to you. Whether it is having an emergency fund, buying a car or saving for retirement, savings is extremely important when it comes to how you are able to spend your time (and your money).