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When the economy started having problems in the late 2000s, it came out that many people had bought more home than they could afford and the housing industry crumbled. People were underwater on their mortgages, or couldn’t afford to pay the mortgage at all and lost their homes. With the repercussions of the mortgage crisis fresh on the minds of many lenders, it’s worth examining whether you actually need that big of a new home before you buy.

Costs Associated with Big Homes

Keep in mind that big homes are quite often associated with big costs. Not only is the purchase price of a big home larger, but other costs associated with owning a large home are proportionally higher. These costs include things like:

• Property taxes
• Home insurance
• Heating costs
• Cooling costs
• Furnishing the home
• Upkeep and maintenance

In terms of property taxes, you could be looking at a cost of thousands of dollars more per year for a large home compared to a small home. In heating and cooling costs, you could may hundreds of dollars a month more to heat and cool a large home – particularly if it’s old and isn’t well insulated or energy efficient. And upkeep and maintenance costs more on a big home by sheer virtue of the area involved – a new roof, for example, can cost tens of thousands of dollars more on a large home versus a small home. Make sure you understand the scale of these associated costs before you buy.

Why Do You Want a Large Home?

If you’re thinking of buying a large home, ask yourself why. Do you want a big home for raising kids? Do you want more space for equipment related to a hobby? Do you want a home office for a business you may start in the future?

Be realistic about your needs. If you have legitimate reasons for buying a big home, then it might be the right choice for you in spite of the higher costs. But if you just want a large home, just to have a large home, but don’t have the finances or lifestyle to justify it, you might be better served by downsizing to a smaller home out of the gate instead.

If you’ve been thinking about buying a home, you don’t have to have all of the questions answered and challenges overcome up front. If you’re lacking money for a downpayment, or your credit score is less than perfect, you may still be able to buy a home with the aid of government programs. What government programs are available to help home buyers, and how do you find them?

FHA Loans

The Federal Housing Administration, or FHA, is a government agency that falls under the realm of the U.S. Department of Housing and Urban Development (HUD). If you’ve been unable to obtain a traditional loan from a standard lender, you might still be able to qualify for an FHA loan. With an FHA loan, you can typically buy a home with a smaller than normal downpayment, often as low as only 3.5% of the purchase price, which can usually be 100% gifts from a generous relative or two, if need be. Additionally, you may qualify for an FHA loan if you’ve got a lower credit score than a traditional lender will accept. Look into the FHA programs that might work for you if you’re having trouble reaching your goal of home ownership through traditional methods.

VA Loans

If you’re a veteran or a widow or widower of a veteran who died of service-related injuries, you may be eligible for a Veterans’ Administration (VA) loan. With a VA loan, you may be able to buy with as little as no money down (100% financing), and your closing costs may be covered by a gift, if need be. VA loans have other benefits, too, so if you think you qualify for a VA loan, look into the VA programs that might apply to you.  VA loans are not just for first time home buyers either.  If you previously owned a home you still may qualify for a VA loan and its many benefits.

USDA Loans

If you are considering a location that is less populated, or willing to commute from a less populated area, The United States Department of Agriculture (USDA) Rural Development (RD) Single Family Housing inititiave may be a great match for you.  USDA RD encourages homeownership in less populated areas across the United States.  There are family size income ceilings for this program, though.  So, If you have a property in mind you can visit the USDA website and verify if the property qualifies based on location, and if your income is below the ceilng established for that county, based on your household size.  USDA offers 100% financing as well for your new home purchase, if downpayment is a concern for your particular situation.

Check with Your Real Estate Agent or Lender for Options

These and other federal government programs may be able to help you reach your goal of home ownership. Check with your lender or real estate agent for more details about these programs, and to find out whether you might qualify.  All you have to do is ask!

Non-traditional home buying options make it possible for first time buyers, credit challenged buyers or economically-strapped home buyers to own their own homes. And a lease purchase option is one of the most common non-traditional financing options. But this type of program isn’t a great option for everyone. Some people might be better served by waiting to buy and instead focusing on developing better creditworthiness, or by saving more money for a downpayment and a cash reserve. Here are some thoughts to consider as you ask:  Is a lease purchase program right for you?

How Are Your Finances?

Many people who have trouble saving money for a downpayment turn to a lease purchase program because it essentially builds the downpayment into the purchase. When you sign a lease purchase contract, many sellers will credit a portion of your rent as a downpayment toward buying. But if your finances aren’t good otherwise, it may be a better idea to keep renting and work on improving your overall financial picture. Even if you don’t have all the money you’d traditionally need for a downpayment, you should have enough money for a cash reserve in your savings account, and to handle closing costs if you buy.

How’s Your Work?

Do you have steady employment? Is there any possibility of downsizing or any trend toward restructuring in your industry? Or does your work require you to move around periodically? If there’s any instability in your work, it might not be the best time to buy. Ideally, you want to be reasonably certain you’re not going to have to hunt for a new job when you buy. And if your work might transfer you or require you to move around the country any time in the next few years, buying could be a liability.

What Will Change in the Next Year?

Generally speaking, a lease purchase option is best for people who will be experiencing positive changes in the next year or the next few years. It’s great for people with upward mobility who expect to get promotions or raises soon. It’s good if you’re close to having the money you’ll need for a downpayment, or if you’re working on improving your credit. But if there aren’t positive changes on your horizon and you’re having trouble getting approved for traditional financing now, don’t assume that you’ll be able to turn things around in a year. You should have a plan for positive developments in the near future, or wait until things are more favorable for you to buy.

Shopping for a home and looking for something with enough room to add a pool? Or are you a current homeowner who is thinking of selling down the road, and wondering how adding a pool will affect your resale value and potential buyer perception? Adding a pool may seem like an easy way to beat the heat in these dog days of summer, but it comes along with some baggage that can affect the value of your home, and your ability to resell it. If you’re thinking of adding a pool, think through a few things, first, and you’ll be glad you did.

How Does Your Region Feel about Pools?

Some parts of the country love pools. In places like Florida, you’ll find a pool in what feels like every back yard. If you live in one of these areas where having a pool is a normal occurrence, chances are good that it won’t hurt your resale value, and could actually help you sell your home down the road.

But if you live in a region where very few homes have pools, adding a pool could actually HURT your home’s resale potential. Pools require additional maintenance and costs, and take away from backyard space that could be used in other applications. If you add a pool in a region where most people don’t have pools, this could make buyers look elsewhere for homes that better meet their needs.

Is There Room for a Pool?

If you do live in a region where pools are commonplace and adding one won’t hurt your resale ability, you have to evaluate whether there’s room for a pool. Is there a good place to put a pool? Does it still leave room in your yard for regular recreation, like playing with children or giving dogs room to run? How about safety concerns?  Adding a fence around the pool, may make it look awkward in your backyard scheme and planned design.  If adding a pool would consume your entire backyard, or if the pool would be awkwardly placed, it’s probably not a good idea to spend your money on it. It could hurt your resale ability even in a region where practically every backyard has a pool.

Buying a home is an admirable goal, and it’s something that many people dream of doing. If you’re like most people, you save and sacrifice for years to come up with your downpayment, and then you struggle for months on short rations as you work to pay for all of the unexpected expenses that come along with homeownership. But don’t get caught off guard! Many people don’t budget enough of an emergency cushion when they buy a home, and leave themselves without any resources after the closing is over. This is when things really get serious, so don’t put yourself in this situation!

Consider the Additional Costs of Buying a Home

Buying a home comes along with a lot of costs that you might not consider if you’ve never owned a home before. Things like closing costs, inspection costs, appraisal costs and lender fees can eat into your cash reserve well beyond the basic cost of a downpayment. You might have attorney fees and title search fees to make sure your closing goes smoothly. And then you may have to spend money to furnish your home or make repairs once you move in! Don’t underestimate all of the unexpected costs that come along with home ownership.

Make Sure You Leave Yourself with an Emergency Cushion

The last thing you need is an emergency repair that hampers your ability to pay your new mortgage. Or to find yourself joining the ranks of the unemployed in this tough economy. But it’s a scenario that people are finding more and more common! Make sure you leave yourself with a healthy emergency cushion when you buy.

Conventional wisdom says that you should maintain enough money in your savings account to get you through at least six months if you should lose your job or become incapacitated. Don’t deplete this fund to buy your home – make sure you have this money above and beyond your downpayment, and more too, or you could find yourself in a really tight financial spot shortly after signing on the line!

Traditionally, buying a home is something that young married couples did when they were ready to start a family. It was a sign of their commitment to one another, and they’d look for a home with room for a family to grow into. Maybe a yard for kids to play in, and a few spare bedrooms for the children they expected. But in the past few decades, perceptions of buying a home have shifted. More and more singles have bought condominiums and homes as investments, without waiting until they were ready to start a family. If you’re single and house hunting, here are a few things you’ll want to consider:

Carrying the Mortgage

If you’re single and thinking of buying a home, is your income enough to carry the mortgage? Single buyers may have an additional burden to overcome without an extra person’s income. You should have more money saved in the event of an emergency, because if you lose your job there won’t be someone else to pick up the bills. And if you’re self employed or if your income fluctuates, you may need to be able to document more income than if you were part of a couple, because your sole income will be the deciding factor in getting a mortgage.

Coming Up with the Downpayment

Even if you can afford to carry the mortgage, coming up with a downpayment as a single individual can be very difficult. Without the second income to contribute to your downpayment savings, or the help of some generous family members or relatives, it can take significantly longer to accumulate the sum you’ll need to buy a home. Some state government programs can help you buy with a lower downpayment, though, or you may be able to get that much-needed help from friends and family. And if you still can’t come up with the cash for a downpayment and carrying the mortgage, there’s always the option of buying a home as co-owners with friends or family.  So don’t let that dissuade you from home ownership.

Talk to an experienced, local lender, familiar with your market and the downpayment assistance programs that are available in your community and consider all options as you pursue homeownership.  They will be able to guide you down some paths available for your particular situation.

Married couples who buy a home together often go into the housing search with a common set of expectations: that they’ll own the home together. But the reality is that owning a home together may not be the best choice for all couples. There are questions of inheritance and tax implications that you should consider when you’re deciding how to own a home as a married couple.

Questions of Inheritance

Most new couples starting out don’t have inheritance questions to worry about, but an older couple who might be on a second marriage may need to consider inheritance issues. What if one of the parties wants to leave their share of a home to a surviving child instead of the spouse? You have to answer the questions of who should get the house when you’re deciding how you should own it.

Tax Implications

Tax implications are another important consideration for a married couple who decide to hold the home together. By holding a property jointly, some couples increase the chances that the IRS could take more money in taxes from the estate. In these cases, it may be more advantageous for one party to own the home individually to relieve tax consequences. You should talk with a tax professional to determine what type of ownership is best for you.

Joint Tenants vs. Tenants in Common

The two most common types of home ownership for married couples is joint tenancy with rights of survivorship and tenants in common. Under joint tenancy with rights of survivorship, the deceased spouse can be cleared from the title with a certified copy of the death certificate and the home belongs solely to other spouse. It’s important to note that even with a prenuptial agreement in which a share of the home is left to prior children, if you buy a home as joint tenants, the share automatically goes to the remaining spouse upon death.

Under tenant in common, each spouse can co-own a property, but each spouse can leave his or her share to anyone – not just a spouse. This is a good situation for marriages where a spouse wants to leave his or her share in the home to a child or other survivor instead of the other spouse.  Be sure to investigate all of your title options when considering your new home purchase.

When a married couple buys a home, the legal questions are relatively simple. They typically buy with one of two ownership styles, and the only questions to resolve are tax-related and inheritance issues. When a couple that isn’t married but is living together buys a home, though, the purchase becomes a lot more complicated. Not only do you have to decide on ownership style, but you need to resolve all of the details of your home ownership – in writing.

Who will maintain the property?

One question many people don’t think about when they buy a home together is who will be responsible for maintaining the property? Is the couple equally responsible for maintenance, or is one party in charge of maintenance? If the couple splits, this becomes a very important question, as the individual responsible for maintenance continues to be responsible even after a split.

Who will inherit a co-owner’s share upon death?

Who will inherit the co-owner’s share upon death? Will it be the surviving spouse, or a child or other party? If a child or someone else inherits a share of the property, how is that share disposed? Does the surviving spouse get the opportunity to rent the property, or are they required to sell and split the profits? You should really spell all of these details out in a contract to avoid messy disagreements.

Equal or unequal interests?

Do both owners share equal interests in the home? If one person contributes a huge portion of the downpayment, or is primarily responsible for paying the mortgage, that person may want a larger share in the home. It may be an awkward conversation, but it’s worth having it to avoid disputes down the road.

Keep Careful Records During Ownership

No-one wants to think about what happens if they split up. But it’s a good idea to keep careful records during home ownership in case there are any disputes if the worst does happen. Keep records of any major purchases and expenses relating to the home, including who paid for what. If you do split up, these records could be extremely important to dividing assets from the relationship.

One untapped source that many first-time homebuyers (and some repeat buyers) don’t know about is programs available from your state. Every state offers some type of home buying program for first-time buyers, and many states also offer other incentives to encourage home buyers to take the plunge. These programs can provide great resources for buyers, including some financial incentives, but they may come with some restrictions that could affect where and how you buy. Here’s what you need to know if you’re considering one of these programs:

Income Ceiling

When you’re applying for state-backed mortgage incentives or financial aid for home buyers, you might be restricted by your income ceiling. An income ceiling means that your income may have to fall below a certain level to be eligible for these programs. It’s worth finding out the requirements in your area, though, as these programs can be quite helpful.

Location-Based Incentives

Many of the incentives that state programs offer to help you buy a home are location-based incentives. You may only be eligible for these incentives if you buy in a certain town, or a certain area of town, and state incentives may not apply when you buy in a specific town. Make sure you know what areas are eligible for state incentives if you apply, and make sure you can find a home you want in the covered area!

Who’s Eligible?

Most of the state incentive programs are only designed for first-time homebuyers. This is part of the big drive to encourage buyers to take the plunge into home ownership, which is good for taxes and good for the economy. Some states also offer incentives for buyers who have not owned a home for a specified number of years; typically three or five. Check with your state housing and finance authorities to determine what programs are available in your area, and whether you might qualify for them.  Also, make sure you are working with a lender who is well versed in these programs, as they do come with some extra paperwork usually, but can be a tremendous financial resource for you and your family members as you consider your downpayment options.

The entrepreneurial spirit is integral to the American lifestyle, and many people currently operate or have operated a home-based business at some point in their life. If you currently own a home-based business and you’re shopping for a house, or if you think you might start a home-based business in the future, you’ve got to keep some extra considerations in mind. Operating a home-based business has some legal repercussions, and the layout of the home can also factor into whether it’s the right place for you.

Consider Zoning Restrictions

The most important thing to consider if you’re shopping for a home where you can operate a home-based business is zoning restrictions. Zoning restrictions determine whether you can operate a business from your home. For example, in an area zoned for residential use, you may not be able to operate a home-based business. But certain types of businesses may not be affected by zoning, or may have exemptions. This can quickly become a complex topic, so it’s best to consult an experienced realtor who can help guide you to appropriately-zoned areas if that is a concern for you.

Does the Home’s Layout Work for You?

If you find a home you love in an appropriately-zoned neighborhood, you have to evaluate the home’s layout. Is there a good office space for your home business, or will you have to work out of a corner of the kitchen? Will you be meeting clients in your home, and if so, will you have an appropriate space to hold these meetings? If you maintain a product inventory, is there a space to store it, or will it overrun your garage and basement?

Think about your home-based business both now and in the future. If your business does well, how will you grow? Will you be able to renovate the home to support your needs, or will you rent office space or offsite space to conduct your business? Operating a home-based business adds another layer of complexity to the home search process, but finding the right home for your needs is possible if you think ahead and examine all of your options.