Tips for Buying a New HomeWritten by Matt McWilliams
Buying a new home can be a daunting task, even for someone who has owned several homes. If you recently purchased your first home, you probably found that is hard to find good advice that is truly useful. You had to learn a lot on our own, but at least now you probably feel comfortable and knowledgeable about whole process.My wife and I recently purchased a new home in Tennessee. Here are some helpful hints we picked up along way: 1. Use all of online resources available. Almost every state and local government has a website where you can research real estate information. The data on home sales, taxes, and neighborhoods is invaluable when you are shopping for a home. We were able to find out most recent sale prices in neighborhood we selected, and we didn't have to rely on a real estate agent to get data for us. Doing research yourself will make you more knowledgeable about market, which is key to making a good purchase. 2. Be realistic about how much you can spend. Try to buy a home in a price range that allows you to put down 20%. If you put down less than this, you will have to pay PMI (private mortgage insurance) to protect lender in case you default on loan. I know that 20% is a lot, but it's not unrealistic. You may not be able to do it on your first home, but hopefully you can on your second home. The profits from sale of my condo enabled my husband and me to have more than enough for 20% down payment on our home. But we didn't put it all down on home - we saved some of profits for unexpected expenses that come with buying a home. We suggest that you do same. 3. Shop for a home in winter, preferably around holidays. Since most people just aren't interested in buying a home when they are trying to deal with holidays, you can pretty much be one of few buyers out there. We bought our home right before Christmas, and it was definitely a buyers market. We had our pick of homes and were able to underbid on asking price, even though we live in one of hottest real estate markets in country.
| | Home Equity Loan vs. 401(K) Loan –Which should you choose?Written by Charles Essmeier
You've finally decided to add that patio you've always wanted to your home. Now you can enjoy barbecue outdoors and get a little fresh air every now and again. But how are you going to pay for it? If you're like most people, you don't have cash for home repairs just lying around house. You'll have to borrow. So where should you go to borrow? Mortgage rates are low these days, so a home equity loan would be pretty affordable, as would a home equity line of credit (HELOC) if you have a number of remodeling projects in mind.
Then it occurs to you -- "What about my 401(K) money? I can get good terms on a 401(K) loan and borrow money from myself!" That seems like a good idea. You can borrow money from yourself and pay yourself back with interest! What could be better than that?.
On surface, borrowing from your retirement savings may seem like a better idea than taking out a home equity loan. The terms are good either way, and interest rates are probably comparable. So, why not borrow from your 401(K) account?.
There are several reasons why it may not be desirable to borrow from your retirement account:.
Most Americans fail to save enough for retirement, so borrowing from your retirement fund may leave you short later should you default. No one wants to be broke when they retire.
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