Buying the Right Vacation Home

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The summer vacation season is well underway and quite a few people will be thinking about purchasing a vacation home. For most this won’t be a decision that is taken on the spur of the moment, but is more likely to be something they’ve dreamed of doing for many years.

An article in aol.com highlights the most important points to consider when purchasing a vacation home in order to make sure the whole experience is as personally and financially rewarding as possible. The first thing to consider is where to buy, and this can depend on how you like to spend your vacations. It can be good idea to make a list of all the things you like to do and to prioritize them. Another thing to do is to look at the Best Places to Buy a Vacation Home list which is produced by Zillow. Any area that is included on the list has to have met certain criteria, as for example anywhere considered to be optimal for outdoor activities needs to be within half an hour’s drive or 20 miles of a national park. The list also rates in each place on its investment potential, and looks at the potential for generating rental income as well as any future increases in property values. Rental potential is definitely worth considering, as even though it might not be an option right away, it could be sometime you wish to do in the future.

It’s a good idea to get to know your chosen area as best you can, and to make sure you don’t jump into anything without researching it first. Try to visit the area in the height of the summer season and the off seasons so you can get a better impression of the local community. You also need to consider the proximity of the area to your main property, as apparently more than 80% of vacation home buyers choose somewhere within driving distance of their main home. Choosing somewhere relatively close by can ensure you use it more frequently and it will be much easier to take care of basic maintenance and repairs.

Owning a second home can be an expensive business, as often mortgage rates are slightly higher than for main residences, particularly if the home is to be used to provide rental income. In addition there are all the other general costs associated with home owning such as utilities, taxes, insurance and maintenance. It does pay to take all these things into consideration, as after all a vacation home is meant to be a pleasure not a burden.

Accomplish Buying The Home Of Your Dreams With These Tips

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If you have been waiting to buy a home, now is the time. There are so many wonderful opportunities out there for anyone who has been thinking about getting into the housing market. This article will walk you through some steps that you can take to get a good deal and understand the buying process.

When you are buying a home you should always have people in your own corner. Get your seller agent first thing. Also when you are doing things like having the home inspected or appraised hire your own people as well.

When buying a home in the fall, remember to use closing as an opportunity to save even more money. You want to make sure not to turn the seller off by suggesting a price that is significantly lower than they want. However, you can save additional money through something called seller concessions; seller concessions are when the seller agrees to cover some of your closing costs. These are usually around two to nine percent of the purchase price.

One of the biggest mistakes people make when buying home when buying a home, is falling in love with the decor that was there during the showing or open house. You are buying a home for it's structure, layout and design, not the furnishings. Try to remove these images from your mind and look past them when touring a home.

An auction on a home that is being foreclosed can seem like a great way to get a good price. Keep in mind that there may be hidden liens or back taxes on the property that you will have to pay if you win it. Also, you can get sucked into the competition of winning, and end up going over your budget.

Understanding what you are doing when purchasing a home is essential. Don't just rely on your real estate agent to do all of the work for you. You need to have a basic understanding, so that you can make informed choices. This article has given you some of those basics, as well as, some tips to make the process as smooth as possible.

Security is the Biggest Must-Have for Smart Homes

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When it comes to smart homes, consumers are more interested in their security features than the gadgets that control the homes’ appliances.

New research by Icontrol Networks, a home technology company, shows that 90 percent of 932 respondents recently surveyed say that security is one of the most important reasons for using a smart-home system. In fact, 67 percent rank it the No.1 reason, and the majority of consumers say security is a must-have in any home automation, according to Icontrol’s 2014 State of the Smart Home Report. Fire and carbon monoxide alarms, as well as gas leak alarms, were listed as top security features, according to the survey. “For now, safety and security are driving initial mass market adoption,” says Jim Johnson, executive vice president of Icontrol Networks. “But the convenience associated with a connected home will likely play a greater role as consumers realize how much easier automation makes their lives.”

Seventy-eight percent of respondents also ranked energy management as one of the top features that matter most to them in a smart home. HVAC heating and cooling management was cited as the most important feature in helping to reduce utility bills. Nearly 43 percent of respondents say they’d be interested in replacing their thermostat with a “smart thermostat,” one that automatically adjusts when the home is occupied. Would home owners be willing to pay for the extra costs in making their homes smarter and more connected? The survey found that 51 percent of respondents would be willing to pay up to $500 for a fully equipped smart home; 32 percent say they’d pay $500 to $3,000.

Learn About These Home Mortgage Tips Today!

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You must follow certain steps to get a good deal in a home mortgage. First, research your options. This article has information that can help you get a loan.

Have at least 20 percent of the purchase price saved. Lenders will want to verify that you have not borrowed the money, so it is important that you save the money and show deposits into your checking or savings account. Down payments cannot be borrowed; thus it is important to show a paper trail of deposits.

You will most likely have to pay a down payment when it comes to your mortgage. Some banks used to allow no down payments, but now they typically require it. You should find out how much you need to put down early on, so there are no surprises later.

Try going with a short-term loan. Since interest rates have been around rock bottom lately, short-term loans tend to be more affordable for many borrowers. Anyone with a 30-year mortgage that has a 6% interest rate or higher could possibly refinance into a 15-year or 20-year loan while still keeping their the monthly payments near around what they're already paying. This is an option to consider even if you have slightly higher monthly payments. It can help you pay off the mortgage quicker.

Although using money given to you as a gift from relatives for your downpayment is legal, make sue to document that the money is a gift. The lending institution may require a written statement from the donor and documentation about when the deposit to your bank account was made. Have this documentation ready for your lender.

With this great mortgage education in mind, you should begin your search immediately. Use the tips above to help guide you through the lending process. Whatever type of mortgage you need, you are now able to go out there and get it.

Saving for retirement should trump rush to pay off mortgage

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High house prices can damage your retirement.

It all starts with young couples buying homes with mega-mortgages. Realizing how incredibly much they owe, they start stressing – and using any extra cash to pay down their mortgage.

Sounds sensible, right? And it is, except for one thing. Young couples would achieve a better financial balance by investing that extra cash for retirement than using it to pay down a mortgage that will gradually disappear all on its own.

The percentage of homeowners taking steps to get their mortgage paid off sooner has been steady since 2000. But the way people are attacking their mortgages has changed in a way that highlights the heavy load of paying a mortgage and all the other costs of everyday life.

The latest mortgage market survey from the Canadian Association of Accredited Mortgage Professionals shows that 15 per cent of homeowners have been increasing the amount of their payments in recent years, down from 19 per cent in the 1990s and early 2000s. Instead, owners are increasingly paying down their mortgages with lump-sum amounts. Sixteen per cent of owners did this in recent years, a rate that has crept higher since the 1990s.

Increasing the amount of your regular payments gives you less flexibility to manage your household cash flow – that’s an explanation of why lump-sum payments are becoming more popular. From the perspective of rising interest rate risk, these lump-sum payments make sense. The more you reduce your outstanding mortgage balance, the less you have to refinance at renewal. Moreover, lump-sum payments do the most good in the early years of a mortgage, when your regular payments are skewed toward interest and you barely dent the principal.

But lump-sum payments that come at the expense of retirement saving can unbalance your finances. You’ll be emphasizing your house too much and giving retirement too little attention.

Just as you get the biggest benefit from mortgage prepayment in your early years of home ownership, so do your retirement savings profit from contributions made when you’re young. So don’t tell yourself you’ll make up for neglecting your retirement savings when your mortgage is paid off.

If you contribute $5,000 to your retirement savings annually for 30 years and get an average return of 5 per cent after fees, you end up with $348,804. If you tripled your savings to $15,000 but invested for only 15 years, you’d end up with $339,862. Think you’ll have scads more money to put in your retirement savings when your house is paid off? You may find that other expenses get in the way.

For example, paying off the mortgage may have left you with little or nothing to contribute to a registered education savings plan for your children’s college or university education. You may want to catch up when your mortgage is paid off. There may also be a temptation to take on new debt, maybe through buying a car. Or, you may decide to move to a bigger house and thereby take on more mortgage debt.

A traditional way of looking at the quandary of paying down the mortgage or investing is to compare the interest rate on the mortgage to the return on the investment. Mortgage rates are in the 2- to 3-per-cent range these days, while net investment returns in the 5- to 6-per-cent range are achievable. If you look at those returns on an after-tax basis (mortgages are paid with after-tax money), they should still be a bit ahead of today’s low mortgage rates. At rates closer to historical norms, mortgage pay-down make more sense.

If you bought a house at the April national average resale price at $409,708, your mortgage with a 5-per-cent down payment and mortgage default insurance premiums included would be $399,926. If you made monthly payments at $1,893 (assumes a 3-per-cent mortgage rate), you’d have the mortgage paid off in the standard 25 years, assuming no prepayments. If you paid $946 on an accelerated biweekly basis (26 payments per year), then you’re down to 22.2 years.

That’s an entirely reasonable time frame for getting a mortgage paid off in advance of retirement. Even if you buy in your mid-30s, you’re clear of the mortgage before 60 without making a lump-sum payment. You don’t need to rush.

Finally, let’s ask a veteran financial planner how she answers the question of paying down the mortgage or investing for retirement. “I have a philosophy of doing a little bit of a lot of things,” said Barbara Garbens of BL Garbens Associates Inc. “A combination of both is probably what I would recommend to a client.”