1. No or Low Down Payment
Buying a home with no or a low down payment is not a good idea. A large down payment increases the amount of equity the borrower has in the home. It also reduces the bank’s liability on the home. Research has shown that borrowers that place down a large down payment are much more likely to make their mortgage payments. If they do not they will also lose money. Borrowers who put little to nothing down on their homes find themselves upside down on their mortgage and end up just walking away. They owe more money than the home is worth. The more a borrower owes, the more likely they are to walk away and be subject to credit damaging foreclosure.

2. Adjustable Rate Mortgages or ARMs
Adjustable rate mortgages or ARMs sound too good to be true and they can be. The loan starts off with a low interest rate for the first two to five years. This allows the borrower to buy a larger house than they can normally qualify for. After two to five years the low adjustable rate expires and the interest rate resets to a higher market rate. Now the borrowers can no longer make the higher payment not can they refinance to a lower rate because they often do not have the equity in the home to qualify for a refinance. Many borrowers end up with high mortgage payments that are two to three times their original payments.

3. No Documentation Loans
No documentation loans or sometimes called “liar loans” were very popular prior to the subprime meltdown. These loans requires little to no documentation. They do not require verification of the borrower’s income, assets and/or expenses.
Unfortunately borrowers have a tendency to inflate their income so that they can buy a larger house. The problems start once the mortgage payment is due. Because the borrower does not have the income they are unable to make mortgage payments and often end up face bankruptcy and foreclosure.

4. Reverse Mortgages
You have seen the commercials and even infomercials devoted to advocating reverse mortgages. A reverse mortgage is a loan available to borrowers age 62 and up. It uses the equity from the borrower’s home. The available equity is paid out in a steady stream of payments or in a lump sum like an annuity.
Reverse mortgage have can be dangerous and have many drawbacks. There are many fees associated with reverse mortgages. These includes origination fees, mortgage insurance, title insurance, appraisal fees, attorney fees and many other miscellaneous fees that can quickly eat at the home’s equity. Another drawback; the borrower loses full ownership of their home and the bank now owns the home

Avoiding the pitfalls of the mortgage maze will hopefully help you keep in good financial health as a home can be your best investment.

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The best part is that once you begin searching through the lists of homes this site has for sale, you do not have to leave the comfort of your own home. With less stress surrounding you, it becomes easier to begin your search, and this in turn means that you will have the right mindset to find a great piece of property that you can call home.

If you want to keep up to date without searching, you can sign up to receive daily email alerts. The alert will email you every morning with new listings, price changes, back on markets and open houses in your towns and price range. This daily email program allows you to find you the perfect home. In your search you can choose the number of bedrooms and bathrooms you prefer, the area it should be located in, and the overall price range that you are willing to budget for.

And don’t forget I am always a phone call away when you are ready to learn more about the homes you have been searching.

This is a Colonial style home and features 8 total rooms, 2 full baths, 1 half bath, 3 bedrooms, 0.52 Acres, and is currently available for $489,000.

For complete details click here.

This is a Colonial style home and features 8 total rooms, 2 full baths, 1 half bath, 3 bedrooms, 0.52 Acres, and is currently available for $489,000.

For complete details click here.

1. Don’t Stop Talking. Money is still a taboo topic and we often don’t have a clear idea about how our partner thinks or feels when it comes to spending versus saving. Talking about your goals with your partner is a simple way to make sure you’re both on the same page when it comes to your finances.

2. Find Balance. Balance power around money. One person making all the decisions and having all the control when it comes to finances is often a recipe for disaster. Find ways for you both to be equally engaged in all money decisions.

3. Create a System. Have a clearly defined money management system that covers everything from who handles the mail to who sends out the checks. Without a well thought-out plan in place, it’s more likely that things won’t fall through the cracks.

4. Immediately Address Problems. When problems arise, address them immediately (no secrets allowed). Avoiding the issue only makes it more toxic and drives a wedge in the relationship.

5. Have Annual Checkups. Schedule an annual money checkup. Things change and just like our physical health, money management needs an annual checkup to keep it healthy and relevant. Set aside time to sit down with each other and evaluate what’s working, what needs to be fixed and address any questions or concerns that either of you may have.

1. Now is a good time to pounce
In many second-home hot spots, prices are still close to their five-year lows. According to Fiserv, single-home prices in Napa, Calif., for example, are down 47% from their 2006 peak; the average house in Ocean City, N.J., costs 24% less than it did in 2006. And though a few hard-hit markets like Las Vegas, Tucson, and Miami could fall a bit further, most economists believe the biggest declines are behind us.

Meanwhile, sales in places such as Myrtle Beach, S.C., and Palm Beach saw double-digit increases last year. “Now prices are starting to move up,” says Myrtle Beach broker Rod Smith.

2. A home is a better deal if it’s rentable
You may think you’ll keep the retreat all to yourself, but it’s still smart to shop as if you’re going to rent the place out. That’s because a home’s rental potential can affect its resale value, says Fredericksburg, Texas, agent Catherine Jeffrey.

Before you bid on a house, make sure the homeowners association or township allows short-term rentals (many do not). And keep in mind that renters prefer homes with at least one bathroom for every bedroom, says Jeffrey.

3. Don’t count on rental income to pay your bills
The typical property rents out just 17 weeks a year, says Christine Karpinski of vacation-rental site HomeAway.com. Plus, you’ll need to pay for cleaning, maintenance, insurance, and maybe management fees (at least 15% of income).

Sales of doomsday bunkers up 1,000%
To get a handle on a property’s income potential, ask a management company for a history of rental dates and rates for homes comparable to the one you’re considering. If your monthly loan payment is less than or equal to one peak week of rent, you’re likely to break even, says Karpinski.

4. Your loan rate depends on how you use the house
Lenders have raised standards across the board, but they’re giving extra scrutiny to vacation homes. Use the property primarily as a second home and you’ll pay about the same mortgage rate as you would on a primary residence, says HSH Associates vice president Keith Gumbinger. If you need rental income to qualify for the loan, however, the house is treated as investment property — so you’ll have to fork over as much as 25% for the down payment and pay up to one percentage point more in interest.

5. Tax benefits can be sweet
Rent the house out for two weeks or less and you won’t have to report a cent of income to the IRS — and you can still deduct property taxes and mortgage interest.

Stay there for less than two weeks or 10% of rental days, whichever is greater, and you can deduct operating costs — everything from cleaning fees and maintenance to linens and repairs — in addition to interest and property tax. Use and rent a lot? You’ll have to allocate the write-offs between personal and rental use, which gets tricky, says Rick Shapiro, a CPA in West Hartford, Conn. So talk to your tax guy before you buy.