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Mortgage News Roundup

August 14th, 2014

Hand with pen pointing to MortgageToday we’re going to look at how to buy a flipped home, how home buyers can avoid a money pit, four ways to help your kid buy a house and remind you again that 2014 is a great time to buy a home. Contact a reputable loan officer and find out what you can afford. If you’ve been on the fence, talking with a professional will help you put together a plan of action.

CNN’s Money Magazine published the 5 top consumer complaints. Number two was home improvement and construction. When renovations or repairs go wrong, it can take a serious financial — and emotional — toll, said Susan Grant, director of consumer protection for the Consumer Federation of America which conducted the survey.  In Florida, for example, one contractor falsely told a 92-year-old woman that another contractor had used his company’s materials on her roof and that he needed to inspect it. He then claimed she had a leaky roof that needed immediate attention and eventually convinced her to pay more than $20,000 for repairs, much of which was unnecessary or extremely overpriced, according to the report.

If you feel something is wrong, you’re probably right. Trust your instincts and don’t shy away from getting help.

How Homebuyers Can Avoid Falling for a Money Pit

And speaking of draining money into home improvement and construction that spins out of control. So what should you do if you buy a house that doesn’t live up to your expectations? Your options are limited, unfortunately.

  •  Litigation. You could hire a lawyer and go after the sellers or builder who sold you the property. In fact, that’s about the only practical solution if you want to get your money back. But it depends on the laws in your state.
  • Home Inspection Always get the home inspected. It won’t find everything but it’s the best defense you have from buying a problem house. They can’t open up walls, but you should look for one who has an infrared camera as that can help detect leaks in the ceiling.
  • Talk with the Neighbors They may be more than happy to tell you what the owner complained about.

4 Ways to Help Your Kid Buy a Home

Read the full article on how to help your children buy a home on Yahoo Finance.

To sum it up:

  1. Help with the down payment
  2. Be a co-signer on the mortgage
  3. Buy in cash
  4. Be the lender

No matter which route you choose, it’s important for anyone who takes on a mortgage to know the risks — and benefits — that come with it.

How to Buy a Flipped House

Buyers often assume a flipped home is like new. The newly renovated home gets top dollar, and the buyer assumes it is perfect.

Most buyers don’t realize that some contractors or property “flippers” are anxious to move on to the next job, and their work may be rushed and subpar as a result. Experienced flippers also want to get the most money for their investment and know certain tricks for hiding problems like charging the air conditioning unit to mask leaks.

To prevent a money pit situation, you will need to be vigilant. Always get a detailed home inspection (we’re repeating this tip because it’s that important). Review all the disclosures. Review the receipts for the work done.

Be on the lookout for telltale signs of rushed worked such as:

  • Light switch plates that aren’t flush with the wall or are at an angle.
  • Crown molding that isn’t completely matched at the corner.
  • Gaps between the counter tops and the wall.
  • Gaps in bathroom tile.
  • Doors or cabinets that don’t close tight.

And find out what you can about the flipper. You want to research if there have been any complaints filed for prior houses. Did they live in the house. Talk with any friends who are involved in real estate and see if they’ve heard about the flipper’s reputation.

Usually there’s something not quite right about every house. The more you know going into a purchase, the smaller the problem will be.

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