When a family is looking to buy a home they are faced with a decision whethere to buy a new home or to buy an existing home. There are a few things that should be considered before buying.

One of the first things to think about is the design and the layout. The newer home generally include bigger rooms, ample clisets, and larger and moree bathrooms. Along with this theree are moree options such as paint color, cabinet type, flooring type, and custom wiring. Also a new home could feature walk in clisets and extra bathrooms. An existing home is just what the previous owner had for a design, it may not be what you would like however this can be all changed . But to renovate could be an expensive job and also upgrades could be very cistly, which can be like new contstruction many times. Anyone who loves a Victorian style home or hardwood flooring will love an existing home.

An existing home can be cheaper to buy, but in the long run they will usually require moree maintenance which will increase the cist. When buying a new home it should not require any maintenance for many years because they generally come with aluminium siding, and pressure treated decks, unlike new homes. However a price negotiation can be done with an existing home.

Buying a new home will mean new insulation, newer windows, and a moree efficient heating and cooling system. Usually when buying an existing home they use moree power, have older windows and are less energy efficient, which is similar to old homes many times. Existing homes are not as safe as newer homes this is because a newer home has recent fire alarms, and along with this it would have a burglar alarm. Existing homes would have to have these updates made and in turn it would be anothere expense.

Buying a home is an expensive and an exciting process. It will make everything easier if you create a list of everything you are seeking in a home. This will help you make a well informed choice.

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Would you be willing to bet $300 of your own money that your home is worth what you think it is? Unless you’re ultra-competitive and will bet on pretty much anything, my guess is your answer would be a resounding “No!”

When you go to buy a home, or refinance your existing home, that’s exactly what you’ll be doing in most cases. This is one of the lesser known and most common mortgage ripoffs that occur because people outside the industry don’t know better. Knowing this and other mortgage financing secrets can save you hundreds or even thousands of dollars.

Purchasing a home, unless you’re independently wealthy, involves borrowing the majority of the purchase price from a lender, typically a bank. Before the lender will give you the money, they’re going to want some assurance that the property you’re going to buy is worth at least that much money, and in most cases more. It’s unusual these days to find any lender that will give you 100% of the value of a property. It’s typically 15-20% now. A far cry from the wild and woolly days before the mortgage market crash!

So, let’s say you want to buy a house. You go out and find the perfect house. You and the seller haggle back and forth and settle on a price of $100,000, just to keep the math simple.

Now you go find a lender and ask them to give you a mortgage. They tell you “Okay, we’ll give you $80,000.” You’re okay with that, so you proceed with the mortgage application.

As part of the mortgage application process, the lender will require an appraisal of the property. The appraisal must be done by a certified professional appraiser. The lender isn’t going to take the owner’s word for it!

Typically, the lender schedules the appraiser’s visit. The appraiser calls the property owner and arranges to visit the property. You, the applicant, are required to pay for the appraisal before it can take place. In my area, this fee is generally around $300.

So, you’ve now paid $300 to have the property appraised. If the appraiser agrees that the property is worth at least $100,000, no problem. The application process moves forward.

What if the appraiser says the property is worth less than $100,000?

Ready…?

You don’t get the loan, and, worse, you don’t get your $300 back! You just bet $300 and lost!

Lenders have been doing this for years and it’s become accepted as a way of doing business. People simply suck it up, pay the $300 and hope for the best. In recent years when property values were rising rapidly, this was rarely a problem, unless the seller had ridiculous expectations and the buyer no clue about the real value of the property. Nowadays, however, property values are declining and it’s much less certain that the seller, however well intentioned, really knows the value of their property.

Some reputable mortgage brokers have adopted a policy of paying for the appraisal out of their own pockets. This puts the onus on them to do their homework and have a good knowledge of the current property values in their area. From their perspective, it eliminates the possibility that they would have to call a potential customer and tell them they just blew $300.

The buyer will pay the appraisal fee as part of the normal closing costs, so it’s not like they don’t have the obligation to pay it. With the broker paying the fee first, this eliminates the risk on the part of the buyer and is simply good customer service. Shop around for mortgage lenders and brokers and always ask them who pays the appraisal fee!

This is just one of today’s money secrets that can help you navigate the rubble of the mortgage industry without getting scammed!

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