DOLLARS AND SENSE

Common sense answers to questions on personal finance

by Joe Plemon

 Q: My wife and I have been wanting to buy our first house, but with all the negative news about foreclosures and bad loans, we are nervous.  We have a good down payment saved and we are planning on a 15 year fixed rate loan.  What other pointers can you give us? 

A:  Good job with the down payment and fixed rate loan!  You are already on track for a wise purchase.  Hopefully, these tips will be helpful:

·         Get title insurance to protect you from an unclean or disputed title.  If you close on your dream home and the previous owner’s Aunt Matilda shows up claiming the home was left to her in a will, you won’t have to worry.  The title company will deal with Aunt Matilda because they have insured a clean title.

·         Unless you are getting a standard subdivision lot, get the property surveyed.  2.3 acres on the deed may actually be 1.5 acres when surveyed. 

·         Hire a certified home inspector.  You need to know before you buy if there are structural or mechanical problems.

·         Look for a home that is in a nice neighborhood, but toward the bottom of the price range for that neighborhood.  Any improvements you make will have a better chance of increasing the value of the house by bringing it closer to neighboring houses.

·         Overlook clutter, bad landscaping or outdated carpet.  These are issues that can be inexpensively fixed and may help you get a great deal.

·         Don’t overlook a bad floor plan.  This will take major money to fix and, if not fixed, will make the home more difficult to resell.

·         Plan to live in the home at least two years.  Why?  Because after two years, all of the gain when you sell (up to $500,000 for a married couple) is absolutely tax free!

·         Go for it!  A home, when bought properly, is still the great American Dream.