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Down Payment Tips

Many people dream of owning a home but don’t think it’s possible because they lack the resources for a down payment and closing costs. Here are tips for securing that down payment.

1) Borrow from your retirement account: Many people have been investing in a 401(k) plan or traditional IRA for years and first-time homebuyers may borrow up to $10,000 for their down payment without incurring a penalty. For those self-employed or if your employer allows it, you also can borrow up to $50,000 from your current 401(k) and pay yourself back over five years at a low interest rate.

2) Ask family: Sure, you may be too proud to ask for money, but if relatives can help you and your family move into that dream home, isn’t it worth it? If you do get help from a family member, the lender will ask you to sign a gift-letter form, attesting to the relationship. The lender may also require your relatives to explain where they got the money and prove that they are financially able to make such a gift.

3) Look for down payment assistance grants: Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to own a home.

4) Come to a lease/purchase agreement: Homeowners who can’t sell their homes in this market may consider a lease/purchase agreement, where you rent the home you want to buy and a percentage of your rent is applied toward the down payment. If you go this route, make sure you get a contract outlining all the details so both parties are protected.

5) Add it to the wedding registry: Several mortgage companies allow those getting married to set up a down payment registry. This is a great way to celebrate the joining of two people in matrimony.

6) Cut back and save: If none of the other ways will work for you, there’s always the old-fashioned “saving for a rainy day.” Try putting aside 10% of each paycheck and make your meals instead of going out for them. If you’re married, save the money you would spend on birthday, anniversary and Christmas presents and put it toward your house. You also may need to forget that vacation this year.

These sacrifices may seem significant but they will be worth it once you’re inside your own home.

Prudential Showcase Properties is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity.

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Single-family home sales will continue strengthening, according to latest report from the Urban Land Institute (ULI).

The Real Estate Consensus Forecast, ULI’s semi-annual survey of the nation’s leading real estate economists and analysts, examined 26 economic and real estate indicators in the third quarter. The report predicted healthy estimates for single-family housing as compared to ULI’s March report.

“The predictions diverge from the previous forecast [from March] in that it is more optimistic regarding the single-family housing sector,” said ULI Executive Director Dean Schwanke.

According to the report, single-family housing starts are projected to increase by 145,000 units in 2013, while home prices are expected to rise 3.9%. Meanwhile, single-family home starts, which have been near record lows, are projected to increase from 530,000 in 2012 to 800,000 in 2014. All of these numbers show improvement from ULI’s March forecast.

“Finally, the single-family housing sector is experiencing a turnaround that is expected to continue,” said Schwanke. “The ULI Consensus Forecast from March projected a stabilizing housing market, and the most recent numbers have been strong, leading forecasters to be even more optimistic going forward.”

Prudential Showcase Properties is an independently
owned and operated broker member of BRER Affiliates LLC. Prudential, the
Prudential logo and the Rock symbol are registered service marks of Prudential
Financial, Inc. and its related entities, registered in many jurisdictions
worldwide. Used under license with no other affiliation with Prudential. Equal
Housing Opportunity.

Homes for sale in Dothan, Alabama

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Should I stay or should I go when my home is showing?

Gently put, most agents say that when potential homebuyers come to see your home, it’s best that you leave the premises.

Perspective buyers don’t want to see owners hovering or milling about. When they do, they get uncomfortable and feel as if they are intruding. This often causes buyers to look quickly without gaining a proper feel for the home.

The reason sellers give for sticking around is that they believe home shoppers won’t be able to find everything, and the sellers want to point out the important features. Another is that owners feel they can help “sell” the property by talking about the positives.

Rest assured your real estate agent is well trained in showcasing your home, and in reading buyers and knowing when it’s best to relay information to them. If you bombard a seller with too much information all at once, you are going to leave a less-favorable impression. You might even hurt your cause by calling attention to something buyers aren’t interested in.

Let buyers discover your home’s features themselves at their own pace.

Some sellers choose to wait outside in their car or on the patio, which is better, but still not ideal. Again, if prospective buyers feel like they are being rushed they are going to move on to the next property on their list quickly.

Face it, there are some parts of selling a home that can be challenging and vacating the home is at the top of that list—especially when there are kids to care for, dinners to cook and work to be done.

However, you want buyers to spend as much time as they want in your home, envisioning the possibility of living there someday. So go to a neighbor’s home, the library or shopping. The inconvenience will be worth it in the long run.

Prudential Showcase Properties is an independently owned and operated broker member of BRER Affiliates, Inc. Prudential, the Prudential logo and the Rock symbol are registered service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. Used under license with no other affiliation with Prudential. Equal Housing Opportunity.

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