Buying a home is expensive. A lot of people want to have a home of their own but do not have enough cash or can’t get enough funding to afford a mortgage. On the other hand some people are looking for ways to be able to take advantage of tax benefits from being a home owner. So they turn to co-buying.

“Neither of us had a big enough chunk of money to put down for a home in a desirable neighborhood,” Brian Free told the U.S. News & World Report about his decision to purchase a home with his friend. “However, aggregating our resources allowed us to find a home that suited our needs.”

However, co-owning anything with a friend or relative comes with risks. But there are things you can do to reduce the risk of running into problems. Careful delibiration and planning is a must.

• Think about how you will hold title

  The decision on how to hold title will affect your say in legal documents. Unmarried co-buyers can share a title as TIC (tenants in common) or as JTWROS (joint tenants with right of survivorship). Co-owners who are married can take title via community property or tenancy by the entirety.

• TIC versus JTWROS

  With JTWROS both owners have equal shares in a home. When a co-owner has passed away, his share will go to the other owners. Consequently this means that the last surviving owner gets all the shares. In a TIC, the shares may or may not be equal. Each co-owner has its own title. Right of survivorship doesn’t work in TICs. When a co-owner dies, his share will not go to surviving co-owners. Each co-owner can pass their share to their family members or whoever they want to will it to. TICs can be dissolved if a co-owner buys out the share of the other co-owner/s. Or to sell the home, one co-owner can file a partition action.

• The similarities of a TIC and JTWROS

  In both ownership arrangements, owners have rights to the property. If it is rented or sold, co-owners each receive each will receive a part of the money that is according to their shares.

• Secure a co-ownership agreement

  It is important to lay the ground rules and protect your share. It is wise to make things clear for all parties involved before problems arise. No matter how close you are with the co-owners, there is always a possibility that ownership issues will be challenged. A co-ownership agreement can help resolve the issue.

• What are the ownership percentages?

  Joint tenants have equal shares. Co-owners in a TIC agreement can divide the shares based on the amount that each has put in for the downpayment.

• How are ongoing costs divided?

  They refer to ongoing costs like mortgage payments, property taxes, insurance, utilities and maintenance. The division of expenses like this should be part of the co-ownership agreement. Co-owners may divide this according to their shares or according to the amount of time each co-owner will put in in maintaining or improving the property. You may want to open a joint checking account so each co-owner can withdraw from this account to pay for ongoing expenses.

• What if a co-owner wants to sell?

  The co-owner who wants to sell does not need to get the approval of the other co-owner as to whom they could sell it to. However, the other co-owner can object to the sale because of their right of first refusal.

Their major responsibility is to protect your interest as a buyer and as their client. Their main roles are the following:

• Educates you about your market.
• Negotiates on your behalf
• Analyzes your wants and needs.
• Guides you to homes that fit your criteria.
• Coordinates the work of other needed professionals.
• Checks and double-checks paperwork and deadlines.
• Solves any problem that may arise.

Buyers are now in a better position when it comes to buying a house. Gone are the days when real estate is a hot market and you need to make an upfront offer as soon as a property is put up for sale.

Competition has mellowed down in most areas. This gives buyers an opportunity to be able to deliberate on what is available and take advantage of the best deals. How do you determine the climate of your market? According to economists, real estate is directly related to employment. So if there is a rise in employment, you can say that the value of your property is also looking up. In the Midwest real estate is not doing as good as auto manufacturing. Prices are low and is not expected to rise anytime soon. It might take a while until the market rebounds.

Things buyers can keep in mind to get the best deal in the market:

• Do your homework and negotiate fairly.

  In a changing market, the biggest problem is human nature. Market value can drop or stagnate. But sellers often refuse to believe this. To them, the price of their home is based on how dear it is to their heart regardless of its actual market value. On the other hand, buyers take advantage of a market slump and make unrealistically low offers. Before you make an offer, research and think about important things like the features of the home that you want to be in the home, the size of the home and the going rate of properties in the area.

• Research on comparable sales.

  Find out how much the last one in the area sold. According to Beverly Durham of ReMax Gold Coast Realty in Camarillo, Calif., “See what’s going on out there.’’ Don’t insult the seller by making a very low offer. You’ll drive them away. Your goal is to make them consider your offer.

• Why is the seller putting it up for sale?

  Find out as much as you can about this. Is it because of retirement, job-related, divorce, they need to relocate, or they simply want to sell to the highest bidder.  This information is crucial. If a buyer knows this, they can either negotiate better or decide to look elsewhere.

• Check the MLS (Multiple Listing Service).

  They usually state what the seller owes. Or your agent can provide this information for you.With this information, you could negotiate accordingly.

• Timing.

  According to Durham, “After 45 to 60 days the seller is usually absolutely sick of keeping their house spotless and sick of people walking through.’’ After this period the seller will be anxiouse to sell their house.

• Go for newer or well-maintained houses.

  It will cost you time, effort and money to fix damages.

  Even in a tight market, it’s okay to ask the seller to add the closing costs to the price of the house. It’s better to pay 20% downpayment and roll the closing costs into the loan than pay 15% downpayment and pay upfront for the closing costs.

• Be reasonable

  when you ask for extras.You can also ask for new kitchen appliances or washer and dryer. Durham said you can even ask the seller to pay for the first year of homeowner association dues. But don’t ask them for things that involve workmanship. Durham said, “Don’t ask them to paint.’’“They won’t do it the way you want. They’ll do a lousy job.’’

  When you consider buying a home, think about staying there for atleast five years. Remember your goal as a buyer is to get the home that you want; not to outsmart the seller.

Are you looking to finance a new home? Or are you finding the best mortgage rate to refinance your home?

The first step is to shop around. But what does that really mean? Research and prepare. Take time to think and analyze different mortgage plans. You could save a lot by doing this. Take this for example: on a 30-year mortgage for a $300,000 house, a homeowner would pay approximately $1,520 each month at a 4.5 percent rate. But if the homeowner chooses a slightly higher rate of 5.10 percent, it would increase the monthly mortgage payments to $1,633, which would make a difference of $40,680 in 30 years. (Figures were calculated on a 20 percent down payment.)

The best thing you should do is retrieve your credit scores. If lenders retreive them multiple times, it can lower your score. 

If you’re looking for a lender, look into their track record. Ask family and friends about them and when you’ve narrowed down your options to two or three lenders, compare their rates.

Before you compare rates, establish a budget. Think about how much maximum you can afford to pay every month.

The lender should be able to give you a comparison of loan terms with conventional methods of financingso you can make an informed decision. Don’t just jump into a plan with low rates. Make sure you understand all the costs with it.  Rate lock is a contract with the lender that ensures the interest rate will not change. But you will need to get the loan within a certain period of time; usually 60 days. If the rate increases, you will not be affected. Using a mortgage calculator , compute the monthly payment at different interest rates. If you find a rate that is lower than your limit, lock in to that rate.

When you see rates that are lower than your limit, act fast. Don’t miss out on good deals and offers.Some lenders offer a “float down.” This means that even if you’re already locked in on a low rate, you can get even lower rates. Specific contracts may vary depending on lenders.

When you look for a lender, don’t just consider one. Look into other lenders as well. Different lenders offer different products. Understand the products. Some products for example have low rates for new homebuyers but not for those who want to refinance.

It’s a good idea to try different institutions from a direct lender, credit union or a community bank. Once you’ve made up your mind on a lender, ask what other fees are added to the loan. You might choose a plan with a low rate but have a lot of additonal charges. Before closing the deal, make sure you know the total amount of the loan.

Once this is settled, decide when you want to close the deal. Discuss your intended date with the lender. Ask about the charges for loan lock periods. Lock in for the best rate and the right amount of time.