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answers to common real estate questions |
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QUESTIONS 1. Who pays the typical fees attached to the home buying process? 2. What are some of my options for paying off my mortgage? 3. What are some tips or general rules to prepare for first-time home buying? 4. How can a student purchase a home without at least two years of job experience? 6. What legalities are involved in using home plans? 7. What are some of the most common tax mistakes made when filing? ANSWERS
Seller pays for:
2.
Paying a little extra on your mortgage each month can save you big
money.
$50/month extra Loan payoff:
$100/month extra Loan payoff:
Source: Family Money 3. Save,
prepare and research. Bidding wars for homes are becoming
more common as demand for houses continues to grow. According to
a report in Ladies’ Home Journal, gone are the days of offering
20 percent under the asking price. In today’s market, it pays to
go in with your highest offer — which requires some careful financial
planning.
4. A lender may use your educational time and job performance during an internship or residency toward the two-year employment qualification. This is particularly true when the level of knowledge required on the profession is highly technical, substantial and can be documented as several years of on-the-job training. The lender needs assurance that your are well educated
and can earn a living in your chosen profession. Reviewing your
scholastic standing as well as your performance evaluations and
work habits can help prove your stability to the lender. 5. One of the key numbers in qualifying for a home is the amount of income you earn. For people who receive a straight salary, it’s pretty easy for the lender to determine that number from a current pay stub. If you work on commission, because your income can fluctuate, the amount you earn isn’t as easy to determine. The lender will most likely average the past several years’ commissions to arrive at a predictable amount of income. If your commissions have been steadily increasing, the lender could agree to put weight on your current income from commissions. You will need to provide the lender with information on why this income is likely to continue, including documenting a stable client base, and providing commission agreements and 1099s. Source: Norwest Mortgage and National Association of Realtors 6. If you are preparing to purchase plans to build a new home, you need to know how you can legally use those plans. Home plans are copyrighted. Just like books, movies and songs, federal copyright laws protect the intellectual property of architects and home designers. Don’t copy designs or floor plans from any publication, electronic medium or existing home. Don’t use plans to build more than one house — the original purchaser is licensed to build a single home from the plans. Plans and blueprints cannot be redrawn without first obtaining the copyright owner’s permission. If you need to make changes in the design, you must purchase a reproducible set of plans. Even so, modified designs cannot be reused — the original designer still holds the copyright on the modified design. Anyone who participates in copyright infringement may be responsible, and penalties can be severe. The responsible parties are required to pay actual damages caused by the infringement (which may be substantial) plus any profits made by the infringer. Source: Better Homes and Gardens® Home Plan Ideas 7. Tax mistakes occur by the millions. As you carefully calculate your taxes in the next several months, keep in mind that it’s easy to make mistakes. According to the IRS, six million mistakes were caught by the agency in 1996 on forms 1040, 1040A and 1040EZ. Even hiring a professional is no guarantee against goofs — there were 1.8 million mistakes by professional tax preparers, with more than 35,000 of them on Form 1040EZ, the simplest of the three tax forms. The most frequent blunders:
Source: IRS, reported in Family Money |
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