Teak Outdoor Furniture – 2 Things You Should Know Before You Buy Teak Furniture – May Save You Money
Have you ever purchased wooden furniture only to have it unusable within a year or two because of dirt, mildew or rotten wood? If so, you may want to take a closer look at teak outdoor furniture. Whether it’s for your home, garden, patio or deck, teak wood is the #1 choice for outdoor patio and garden furniture.Teak (Tectona grandis) is known for its beauty, strength and durability and is found to be grown mostly in India and Indonesia on large plantations. Teak trees can grow very tall to 150 feet and have rough, reddish green leaves. Teak wood also contains rubber and silica that resist water, mold and mildew allowing you to leave teak furniture outdoors all year round. The trees sap has natural anti-bacterial and anti-fungal properties that make teak known for its resistance to disease and termites. Natural oils found in both the heartwood and the semi heartwood, make it extremely resilient to moisture and will not rot for many years with virtually no care whatsoever.Because of the high cost associated with teak, you need to know and understand 2 very important key factors regarding teak wood before you invest your hard earned money on any piece of teak furniture.#1 The 3 Grades of Teak Wood#2 Moisture Content and Moisture Levels in Teak WoodThose 2 factors may not seem to be all that important but I can assure you they are. Once you understand why this is relevant you can then purchase teak furniture with confidence so that you, your family and friends can enjoy your investment for many years to come.Three Grades of TeakTrue Grade “A” teak is the mature heartwood, very dense, almost always completely free of knots, tightly grained and rich in natural oils. This grade of teak makes up only 20% to 25% of a mature log which is a very small percentage of the timber making it rare, hard to find and in high demand. You will find this Grade of teak to be the most expensive. When Grade A teak is new it has a rich golden honey brown color and as it ages it will turn to a handsome silvery gray patina color that many people love because of it’s natural state.Grade “B” teak is the semi-mature outer heartwood, the color is lighter and occasional streaks of black and some small knots are acceptable for this grade which is why it is much more affordable when using it to manufacture outdoor furniture.Grade “C” teak is referred to as sapwood and is the outer section of the tree. Sapwood is very soft, can be easily damaged and has large almost white color variations. Because of its lack of quality, virtually no protective oils, it is extremely cheap to purchase and in some cases it is simply tossed out and not used at all because of it’s low quality.Teak Furniture ~ Moisture Content LevelsAlthough Grade A teak is a good measure of quality, it is not always the case. You may have Grade A teak with high moisture levels which is just as bad as Grade C.Ultimately, the process to produce high quality teak is in the drying process. This is very important. The least amount of water in the wood, the better its quality. Keep in mind Teak wood should be dried to a maximum level of 12% however, the recommended level of 8% is of the highest quality. If the wood is not dried to these levels, the beautiful teak furniture you purchased, for what you thought would be a lifetime, will most likely warp, split and over time become rendered useless.The correct method of drying teak furniture is in kiln ovens at a set amount of time and temperature. Kiln ovens are not only an expensive piece of equipment but they are expensive to operate. The size of these ovens take up a lot of space and are time consuming to operate.The problems begin when the majority of factories in Indonesia do not have the proper equipment because either they cannot afford the ovens or they do not have the space for them. These factories owners will actually air dry the furniture instead of using kiln ovens before shipping to the United States or the UK. It almost goes without saying, teak furniture dried in this fashion is not quality teak, at all.The few factory owners who actually own kiln ovens are not using the recommended time allowed to properly dry the teak furniture due to the high cost involved in running the machines. Since it cost more money to dry teak from 16% to 8% than it is to dry it from 22% to 16% they will try to dry the teak quickly, cutting the time in half by removing the teak before reaching the maximum requirement or even at 22% or higher and proceed with making the garden, pool and patio furniture you may unknowingly buy.At this rate you no longer have the qualities that make up Grade A or Grade B teak wood and you are better off not purchasing this type of teak at all. Buyer Beware!Teak Furniture ~ Asking the Right QuestionsI hope this information helps you to better understand what to look for when shopping for outdoor patio furniture. Be sure to ask questions before making a purchase. Most retailers will advertise the type of Grade but not always the moisture content. It’s up to you to ask at what level is the moisture content.Don’t be fooled if a retailer tells you he doesn’t know what the moisture content levels are in his teak furniture. He knows exactly what levels of moisture he has in the furniture he supplies and should not hesitate to share that information with you.And don’t believe it if they tell you Grade does not matter or that no one sells real Grade A teak anyway. If they cannot give you a straight answer you may want to keep shopping until you find an ethical retailer.Teak Furniture ~ Proper Care and MaintenanceProper care for the finish of your teak furniture depends on your preference. If you like the silvery gray patina color, as many people do, then you don’t have to do anything. However, if you would like to keep the rich golden honey brown color it is recommended to treat your teak outdoor furniture with a little teak oil 1 or 2 times per year to maintain its natural luster.Contrary to the many claims that you do not need to do anything at all, teak outdoor furniture, especially dining furniture should not be left outdoors all year round in the harsh weather and not expect some consequences. When the teak dining set you plan to use on a regular basis accumulates dirt, stains, scratches, wear and tear it can make the best teak furniture set look worn just after a short period of time. Do yourself and your teak patio furniture a favor and cover it with a good breathable furniture cover in the winter. You’ll be glad you did!
How You Can Enhance Your Credit Score Swiftly And Efficiently – Easy Steps
Pay Off Your Credit Card BalancesAmong the ways to raise your credit score promptly is to pay off revolving accounts like your. Ideally, it could be ideal to obtain your balance on every card beneath 30% of its credit limit. Say for instance the credit limit for one of the is $1500. It is best to keep its balance beneath $450, which is the 30% of the card’s total credit limit.For those who have many and also you can’t afford to pay all of their balances at the similar time, it will be greatest to pay down the cards with balances closest to their limits. This will significantly enhance your credit score because the three reporting bureaus as well as the FICO automated credit scoring program will see the big gap in between your balance and your credit limit as a plus factor for your.Limit Your Credit Card TransactionsConsumers are seldom informed that big balances on, specially those closest to their credit limits, have an enormous negative impact on their Even for those who often pay off your credit card bills on time and in full every month, it does not matter especially if you still reach your credit limit every month – the credit scoring program doesn’t care about your on time and full payments. Why? Because credit providers submit your outstanding balances from final month’s billing statement to the credit reporting bureaus, these balances are then reflected negatively in your newest.To be able to remedy this, you need to keep track of your expenses and carefully examine the balance on each card. You need to keep in mind that the ideal credit card balance which will boost your score dramatically is below 30% of its credit limit. So you must review your billing statements, know your limit, get the 30% rate, and begin limiting your card transactions.Use All your CardsOne of the mistakes produced by shoppers that negatively influence their score is transferring all of the balances of their high-limit to a single low-limit credit card. This transfer is called consolidation of accounts. It could be far better to have little balances on each credit card than to have a major 1 on a single card since the FICO method will take this consolidated account as a negative aspect in your score.Furthermore to this, by employing all of the for transactions that falls below your 30% credit limit, the credit providers is going to be able to update your accounts using the bureaus often therefore rendering far more credit report information and facts utilized by the FICO scoring program to compute your credit score. The extra information, the far better credit score you’ll get.Check With the Lenders’ Recorded LimitsIn some circumstances, may possibly be artificially depressed due to the fact the lenders are submitting reports to the credit bureaus that reflects a lesser credit limit than you in fact have. It is best to check together with your lender and see if their submitted reports are free from errors, specially your credit limit. When you found an erroneous entry for the credit limit, inform the organization and they will swiftly update this for you.You’ll find some credit card businesses that do not report your credit limit to the bureaus. This isn’t excellent simply because the bureaus will take your highest balance as an approximation of the credit limit. In order to fix this dilemma and increase your, you must pay off your balance before the statement arrives. You’ll be able to generally check your online account for the transactions you have produced and pay your balance prior to the cut off for the billing statement.Bring Back the Old Cards to LifeDid you know that the older your credit history, the superior? Yes, this is really a reality. According to Craig Watts, an executive at the FICO credit scoring program, employing your oldest cards as soon as in awhile can assist regain a stronger a credit score. In the event you stopped making use of your old credit cards, the organizations that issued them may quit updating your accounts at the credit reporting bureaus. If this takes place, these cards won’t be capable of positively have an effect on your credit score given that they’re deemed as inactive accounts.To get a far better credit score, it is best to use your old credit cards, charge a tiny amount each month, and pay their balances in full once the statement arrives. By reactivating your old credit history, you’ll have much better and higher credit scores in no time.
How to Write a Business Plan for a Computer Repair Business
So, you have decided to open up a new computer repair business, but really are not sure how to proceed. If that is the case, below we are going to tell you everything that you need to do in order to not only make an educated business decision. But also, the steps you need to take to create a comprehensive business plans that will at the very least, provide you an excellent road map for your new venture.There are many different kinds of formats used to create a business plan. In this example, we are going to assume that you will not need an outside financing source and that your computer repair business will only be a local operation, at least initially.The concept behind a business plan is relatively simple to understand and execute. Essentially, you want to make sure that what you are thinking about opening is financially viable, and if so, then write down everything that you need to accomplish in order to turn your idea into a profitable endeavor. Below we are going to layout a traditional business plan and let you know precisely how to complete each section.# 1 – Executive Summary – You really do not have to work on this section of the business plan if you do not planning on showing it to anybody, or you are not looking for investors or an outside financing source. That being said, if you are really serious about turning your new enterprise into a profitable going concern that has the ability to not only grow, but is also sustainable, you should sit down and spend a few hours writing out the executive summary.The executive summary which is also sometimes called the management summary, goes at the very beginning of the report, but should only be written AFTER you have completed the entire business plan. Its intended purpose is to capture the reader’s attention, get them interested in the business, and briefly explain the concept and everything else that is contain in the report.# 2 – Business Description – This is where the real work starts when you decide it is time to get serious, and begin writing out your business plan. What you want to try and do is to get all of you ideas down on paper so that you can refer back them in the future if you need to.Please do not be concerned with you writing style at this point, but only the information. Later, after you are sure you have included everything that you want or need, you can go back and clean up the material. Below are some of the things that need to be discussed in this section.A) Why you believe this is a good business to start.B) What do you know about this type of business.C) What skills are you bringing to the table.D) What skills do you need to acquire.E) Who is your market.F) Why is there a need for the service or product you plan on supplying?G) Why you believe that your business will be able to serve your market better than any of your competitors.H) What will make your business standout from the competition.Okay, you get the idea. Please do not limit yourself to the things we discussed above, but also include anything and everything else that you think could be important.# 3 – Market Analysis – This might be the most important consideration for anybody that is thinking about opening up a new computer repair business. After all, if there are already 14 other similar companies competing in your neighborhood, it would probably be a good idea to think about doing something else.In all seriousness, you really have to understand your competition at the highest level, know what their fees are, be familiar with the services they provide, and figure out a way to improve on everything that they do. If you are confident you can meet or exceed the stipulations mentioned above, then your new business just might have a chance of succeeding. Below you will find some of the areas you need to research and be familiar with.A) Write down each and every store or standalone operation that you will be competing against.B) Note each and every service that they provide.C) Figure out exactly what they charge for each job.D) Here is the tough one, ask yourself, now that I know everything about my competition, how am I going to everything they do, better and cheaper?If you are able to answer that last question, and you are happy with the way you answered it, you just might have a real chance of making it.# 4 – Organization and Management – More than likely when you first start your computer repair business, you are not going to have any employees. But, there are going to be certain jobs, like setting up a computer network for a large company that could require a little extra manpower. If so, have you thought about who you know that you can bring in at a moment’s notice that would be willing to work part-time.Next, people that enjoy working on computers are usually very organized and hopefully you happen to be one of them. If not, it is really going to be very hard for you to run a company that is in an industry that is time sensitive. After all, when you tell somebody that you are going to arrive at their home or business at 4 pm, and you show up three hours later, do you really think that they are going to call you the next time they have a computer problem?Another thing that you need to take into consideration in this section, is as your company grows and you acquire more and more customers, when do you hire another computer technician and who do you hire? Do your hire somebody that already has a great deal of experience and will demand a very high salary? Or, do you hire a novice that you can train that will be less expensive? Below are some of the things you are going to need to ask yourself in order to complete this section of the business plan.A) Am I organized, and if not, how do I improve in this area?B) Am I good at training people?C) Do I have any friends that will part-time work?D) Do I know how to delegate, or do I have to do everything myself, so that I know it was done correctly?E) Can I accept other people’s shortcomings and help them improve in those areas?F) Should I invest my capital in my staff and how much of an investment can I justify?And, you thought it was going to be easy to open a small computer repair business. If it was easy, everybody would be doing it. If you are not prepared to at the very least to answer some of or all of the question in this section, starting your very own business just might not be a great career choice.# 5 – Services and Products – This is an area that you really should not have too much trouble with. If you do, then you definitely should not be thinking about starting a computer repair business. In this section, you need to use the information you gathered about your competition and write down all the services or products you plan on promoting, as well as the fees you plan on charging for your services.# 6 – Marketing, Advertising, and Sales – Computer geeks by their very nature are usually not outgoing people that make good salesman. That being said, your business needs customers and to get them you are going to have to think out of the box and come up with some creative ideas. We are going to provide you a few proven marketing and advertising techniques below, but you really need to figure out what your competition is doing in this area, and then either copy them or come up with better schemes.A – Website – Of course you are going to have to build a website, after all, you are in the computer business. Hopefully, you know how to properly SEO your new site, if not, find somebody that does before you waste your time, effort, and money by creating a site that nobody is ever going to see.The good thing about a computer repair businesses is that virtually every one of them is a local operation. That means that your competition on the internet for highly targeted traffic will not be that fierce. In other words, if you correctly onsite and offsite SEO your new website, there is a very good chance that it will move up the search engine rankings extremely quickly and you will get to Google’s first page, and just maybe, the top spot on that page in only a couple of months.TIP # 1 – Remember this is a local business, and when you select your URL it is critical that you choose a local name. What we mean by that is, if the name of your new business is “Joe’s Computer Repairs”, that is not what you want to use for its URL. Instead, you want to use your towns name in the URL.That means if you live in Dallas for example, you want your URL to be “DallasComputerRepair.com”. The reason you want to do this is very simple to understand, all of the search engines will move your site up their rankings whenever somebody in Dallas types in the search term “Computer Repair”.TIP # 2 – For any new business, it is absolutely critical that when somebody does find your website, you get them to either give you a call or send you an email. To do this, you really have to offer a great deal that everybody who visits your site, is sure to see. A few examples you could use are the following.I – Second repair visit FREE.II – Half price on service calls for all new customers.III – Free antivirus and malware software for all new customers on first service call.B – Low Cost or Free Advertising – All new businesses have the same problem, which is they are not generating any cash. Thus, they cannot afford to spend too much on marketing or advertising. So, you have to find ways to promote your business that are either totally free, or cost very little. Below we are going to provide a few suggestions, but you know your local market far better than we ever could, and you need to come up with your own marketing ideas.I – Craigslist’s – If you are not familiar with this site, it allows you to place classified ads for free, so use it. In addition, there are quite a few other sites that provide the same free service, so please find them, and use them.II – Social Media – Almost everybody has heard of the following websites Facebook, Twitter, and YouTube. These types of sites are called social media and they allow their users to interact with one another. If you were able to build up a strong local following on anyone of these sites, almost assuredly, your business would eventually turn into a huge success story.111 – Flyers – Printing out 10,000 flyers is not that expensive and they can be a fantastic marketing tool. Not only can you hand them out in your neighborhood, you can also distribute them to the local businesses and put them up on bulletin boards at grocery stores.IV – Neighborhood Newspapers – If you are fortunate enough to live in an area that receives a free neighborhood newspaper delivered to your door each week, you might want to think about advertising in it. Their advertising fees are very reasonable, and your ads just might be able to generate enough leads to get your new business off the ground.It really does not matter if you are the very best computer repair engineer in the world, if nobody knows about you, your business will surely fail. In reality, this might be the most important section in your business plan, because if you do not develop a marketing and advertising program that is going to work in your local market, almost assuredly your new business will not be around for more than a year, if that long.# 7 – Financial Projections – The great thing about starting a computer repair business, is that in most cases, you will not have to spend a great deal of money to get it up and running. You do not have to rent a store, more than likely you already have a car, computer, and some, if not most of the software that you need. In addition, you do not have to put anybody on the payroll right away. So, other than your advertising expense, you really do not have any cash flowing out of the business.The most important thing for you to note in the financial projection section of your business plan are the capital expenditures you need to make to open the business. These could include but are not limited to a new laptop computer, more software, a better cell phone plan, and your advertising expenses.As for your income projections, you should definitely set goals for yourself using realistic figures. After all, you do not want to set your goals so high, that you later become discouraged when you don’t achieve them, and you do not want to set them so low, so as to not challenged yourself.ConclusionFor the most part, the people that do well in business not only had a great idea to start with, but were also committed to their company and were willing to put in the time and effort that was required to make their firm a success. Working for yourself requires far more determination and discipline than just about anything else you can do in life.That being said, starting a new computer repair business is not without its risks. But, then again, it is not without its rewards either. If you feel the time is right and you have all the skills that are required to run this type of business, then why not go for it? After all, what is the worst that can happen; you lose a little bit of time and money, and end up having to get a job working for somebody else if your business does not make it.
Buying property in the USA — Tips for buyers from abroad
Buying your own property, whether as a vacation property, investment or family home, is an exciting business – especially abroad.
This article addresses common questions and uncertainties about financing and the buying process as well as important information, vocabulary, risks and resources – so that nothing stands in the way of your dream of owning a home in the USA.
I discuss what to look out for and what to research so that a foreign buyer gets financing at all, is taken seriously by the seller and can successfully complete the purchase.
There are some expressions that non-Americans may not have heard. First, you find frequently used and helpful vocabulary:
Appraisal
The appraisal is often mandatory for financing. The actual market value of the property may differ from the selling price, which is particularly important with government loans (government loans only pay for market value). Just like good research, the broker can give an insight into the market value of the property in advance, but if there are deviations at the end, it can result in a new basis for negotiation. Average cost around 300-600 USD.
Closing
The final step in the buying process is closing. The buyer meets with his realtor (if hired) and the closing agent to sign papers, confirm information, and most importantly, pay the closing costs.
Final closing costs, which are the responsibility of the buyer, include lender, attorney and city office fees, as well as insurance, taxes, appraisal, inspection and registration. Cost point for the buyer on average 2-6% of the loan amount. As a seller, you also have closing costs such as taxes and realtor fees. Average cost to the seller of 8-10% of the loan amount.
Closing Agent
The Closing Agent is a professional Real Estate Attorney who ensures that the purchase transaction is legal and correct. The participation of buyer and seller as well as realtor, escrow, title company and lender is checked and confirmed. At closing, the law firm is paid the Attorney Closing Fee, which averages around USD $600-$1000.
Credit Report Fee
The credit report fee is charged at closing, which is common for any major purchase. Average cost at USD $30-$50.
Debt To Income Ratio
To be eligible for financing, the average debt-to-income ratio must be below about 43%. That means total monthly payments like car, credit card, and loan payments combined shouldn’t exceed 43% of total income. Depending on the loan provider and the situation, this percentage may vary slightly.
Deed
The deed certifies the owner’s right to claim ownership of the property. In contrast to the title, this describes who ultimately owns the property.
Downpayment
This down payment (compared to the Earnest Money) is the promise to the bank. The amount is part of the purchase price and is not financed by the loan. The higher the down payment, the greater the responsibility and promise of repayment, and the more likely the lender offers the loan. If a downpayment is below 20% of the home purchase price, the lender often requires a Private Mortgage Insurance. Getting a loan with no down payment is possible, but rare.
Earnest Money
The Earnest Money amount is set between the buyer and buyer-agent and then promised by the buyer with the offer to the seller. This confirms the seriousness of the buyer’s interest in the property. The amount is usually credited to the buyer upon closing. If the purchase does not go through, the amount will be refunded to the buyer, unless the failed sale is caused by the buyer.
Escrow Account
This is an agreed third-party account into which ongoing real estate costs such as taxes and insurance are paid by the borrower. With each monthly loan installment, an additional amount is paid, which is transferred to the escrow account. The bills are then paid annually from this account. In this way, the companies involved, such as the lender, can be sure that everything is always paid on time.
FIRPTA Withholding Tax
FIRPTA (Foreign Investment in Real Property Tax Act of 1980) is a US tax law that ensures foreign sellers pay income tax when selling real estate in the United States. As a result, the buyer is obliged to withhold 15% of the sales price in taxes and pay it to the state. There are some exceptions, for example if the property is being bought for residential use or the selling price is no more than USD $300,000. In addition, the seller can report the sale on their US tax return and reclaim any overpaid taxes. Another option is the Witholding Certificate from the IRS.
Government Grants
Some buyers can apply for government grants. First-time buyers in particular are likely to receive financial support from the state. There are various offers, such as cash grants, tax credits and interest rate reductions, to make the purchase easier. Be sure to read the fine print so you can use the grant properly.
HOA Homeowner’s Association
A HOA is often for apartments or houses in neighborhoods and deals with common areas, insurance, and house exteriors. However, keep in mind that each HOA may have a different contract and the fine print plays a big role here. The monthly costs that the homeowner has to pay also differ. This is where it can be a relief as well as a burden – ask your realtor for the right paperwork.
Homeowner’s Insurance
In order to be able to finance a home of your own, you must already have signed your new homeowners insurance. The realtor can often recommend an insurance company, but it’s worth getting a few quotes depending on what state or territory the home is in or what’s important to the buyer. Flood and storm insurance (for named storms/hurricanes) is also required in some areas.
The insurance is divided into Dwelling (for damage to the house), Other Structure (for damage to e.g. garage, shed or fence), Personal Property (for replacement of e.g. furniture, clothing), Loss of Use (for maintenance costs, such as hotel, in the event of damage), Personal Liability (for claims arising from damage to others or their property caused by owners) and Medical Payments (for medical expenses of damage to others caused on the property, regardless of who is at fault).
Inspection
When you have decided on a property, or are very interested and want to move forward in the financing process, the next step is often the home inspection. You can either order an inspection yourself, but it is often best to simply do this through your broker, who has experienced referrals. The buyer then receives the inspection report and can decide how to use this information for further negotiations.
Lead-Based Paint Inspection
Property in the US built before 1979 could have lead paint, which poses a significant health hazard. So if you want to buy an older property, this inspection is mandatory. Average cost at USD $300.
Lender
Here it is really best to contact as many as possible, as both the areas of interest and the perception of interests can be very different. Not every lender works with foreign clients, and the financial situation also makes a difference. Both banks and private companies act as lenders and each has its own advantages and disadvantages.
MIP Mortgage Insurance Premium
A loan insurance premium must be paid for an FHA loan. The current MIP rate is 1.75% of the loan amount.
Mortgage type
When you look at a real estate ad, you might stumble across terms like FHA or USDA. These are different types of loans. It is interesting to know when you are eligible for which types and how best to use the advantages.
Conventional Loan: There is no government insurance or assistance, so it comes with higher requirements. Average requirements: Credit score of at least 620, down payment often 20%, debt-to-income ratio below 43%.
FHA Loan (Federal Housing Administration): Requires an additional loan insurance (FHA Mortgage Insurance) that the buyer must pay (MIP Mortgage Insurance Premium). Average requirements: Credit score of at least 580, deposit 3.5%, debt-to-income ratio below 43%.
USDA Loan (U.S. Department of Agriculture): For rural areas and buyers with incomes below the specified income limit. Also requires a so-called guarantee fee of 1% upfront and a 0.35% annual fee. Average requirements: Credit score of at least 640, 0% deposit, debt-to-income ratio below 41%.
VA Loan (Department of Veteran Affairs): For military veterans, current military personnel or their spouses. Average requirements: no minimum credit score, 0% deposit, debt-to-income ratio below 41%.
Offer to Purchase/Purchase Agreement
When buying a property, an Offer to Purchase is deemed to be ‘conforming to contract’ when it has been accepted in writing and signed by both parties. This signed offer is then referred to as the Purchase Agreement. In many cases, however, the contract contains certain conditions that must be met in order for the sale to go through.
Pest Inspection
Some US states require a pest inspection before a loan is approved, especially VA loans. Average cost at USD $100.
PMI Private Mortgage Insurance
Private Mortgage insurance protects the lender if a borrower fails to repay their loan, thus reducing the risk for the lender to give a loan. It allows a buyer to qualify for a loan that they otherwise might not have been able to obtain. Typically, a borrower with a down payment of less than 20% of the home purchase price must purchase loan insurance. Cost point on average at 1% of the loan amount.
Pre-Approval
Before you start looking for a house, you should get a pre-approval that specifies how much money the lender will lend you and under what conditions. This not only helps as a buyer to know what to shop for, but also helps the seller since a pre-approval shows confirmed interest and buying power. You can get this document from your lender.
Prepaid Interest
The lender may require the buyer to pay any interest accrued between the closing date and the date of the first mortgage payment at closing.
Property tax
Every homeowner owes the property tax to the local authority. At closing, the first 12 months of property tax are often due. The value of the property tax can be calculated using public records or the appraised value.
Property Title
A property title is the right of ownership for use, modification, and transfer. With the title come fees at closing for Title Search (approximately $200 USD), Transfer Tax (approximately $1 per $500 USD of property value) and Title Update (approximately $50 USD). The Title Insurance is also important to understand.
Rate Lock Fee
Some lenders offer to hold the current interest rate between pre-approval of the mortgage and closing. This service may be free depending on how long the rate lock is in place, but some lenders may charge a fee of around 0.25-0.5% of the purchase price.
Survey Fee
Some US states require a land or property survey before a sale can be completed. The fee goes to the surveying company that verifies and confirms the property lines. Average cost at USD $400-$900.
Realtor
When buying a home in the United States, buyer and seller are represented separately by realtors. The buyer hires the buyer agent and the seller hires the seller agent (or listing agent). It is also possible, but more uncommon for an agent to represent both sides, which is then called a dual agent. Buyer agent and listing agent each charge 3% of the purchase price (minimal differences depending on the US state), which are due at closing. These costs are often paid by the seller, but offer a good basis for negotiation. Cost point on average at 6% of the loan amount.
Recording Fee
This fee is paid to the local city or county government to update public property records. Average cost at USD $100.
Origination Charges
At closing, the origination charges (incl. underwriting fee, commitment fee and document preparation fee) are billed, which compensate the lender for the work to check the creditworthiness, as well as create and approve the loan. Cost point on average at 1% of the loan amount.
Seller Credit
Buyer and seller can agree to increase the sales price and loan amount. This allows the buyer to have the closing costs financed with the loan and does not have to pay everything out of their pocket. The seller ends up getting the same money and can close the deal securely, so both sides have an advantage.
Title Insurance
The title insurance is a form of liability insurance that protects lender and homebuyer from financial loss caused by defects in the title. There is title insurance for both the owner to protect the homebuyer from title issues and the lender to protect them from title issues. Owner title insurance is optional, but most lenders require borrowers to obtain lender title insurance before they can obtain a loan. Cost item for owners insurance averages USD $500-$800 and for lender insurance averages 0.5-1% of the loan amount.
Financing a home in the US as a non-US citizen is doable, but it comes with extra work. Here is the process for buying property with financing, as well as further insights, difficulties and tips.
The process of a purchase with financing usually looks like this:
Select lender
Get pre-approval
Select realtor
Go house hunting
Submit Offer to Purchase
Perform inspection & appraisal
Complete negotiations
Get insurance
Have loan approved
Complete closing.
What matters to lenders is financial responsibility (usually proven by the credit score), total debt, as well as lengthy legal residency in the US (like visa) and a steady income.
If you want to get financing, you have to fully disclose your finances to the lender. Being able to prove every transaction and not trying to hide anything plays a major role here. Especially in the 90 days before the loan application and closing, you should keep your accounts as steady as possible. Absolutely avoid gifts of money, sales and extraordinary transactions, since the lender should not question anything.
What is typically required for non-US citizen financing:
A valid work visa.
A valid social security number.
Work permit documents.
Proof of employment.
A good credit history.
Proof of income.
What can become difficult as a foreign buyer is replacing these requirements if you can’t fill them. For example, if you don’t have a credit score or US bank account, it’s best to bring all of your foreign financial details with you. Proof of long-standing bank accounts and income, as well as credit card and loan payoffs can definitely help.
Additionally, you may be able to show that you either intend to move to the United States or plan to reside here regularly. Because another thing that is important to a lender is to know that once you get the loan, you don’t just leave the country and neglect your payments.
Consider what the lender wants to see – financial responsibility!
Tip #1: Co-Sign! If you have relatives or friends in the US (with good credit scores and income), you can ask if someone would co-sign the loan to give the lender more security.
Tip #2: Find the right lender and realtor! That really decides everything. Also check here for brokers with CIPS.
Tip #3: Some foreign banks work with US banks or have a presence in the US market. So it may be possible to request a loan through your local bank or to get more information about the application.
If you bring enough change with you and can buy your new dream house cash, this whole process becomes simplified. Because most of the requirements come from the lender.
Again, it is wise to hire a realtor to learn about local laws and characteristics, as well as for negotiating, drafting the offer, or getting an appraisal. If you decide to work without an agent, all you have to do is find the closing agent to handle the closing.
The process of a purchase without financing usually looks like this:
Find property
Complete negotiations
Find Closing Agent
Complete Offer to Purchase
Perform inspection & appraisal (optional)
Get insurance (optional)
Complete closing.
When buying (and selling) real estate in the US as a non-US citizen, there are a few things to keep in mind to avoid falling into the big tax trap.
Like any homeowner in the US, you owe property tax on your property. The tax invoice is usually sent by mail, so make sure you have entered the correct postal address and have a way of payment.
As a seller, the Withholding Tax (FIRPTA) is also important to keep in mind. When a property is sold by a non-US citizen, the buyer must withhold and pass on a sum of taxes to the state. However, this only applies in some cases (rather with investments) and the difference can be recovered through the US tax return.
Also to be considered as a seller – the capital gains tax. The seller pays additional tax on the profit of the sale.
So – it is best to always and properly file the American tax return, not only to comply with the law, but also to pay only the most necessary taxes.
Especially if the property is not used as a full-time home, it quickly becomes questionable who will take care of the house in the meantime. Administration, repairs, gardening and maintenance work must be organized ahead of time. If the property is located in a storm or severe weather area, there are precautions that must be taken here as well.
There are many Property Management companies that take care of rental properties, landlords and tenants. Rentals of 6-12 months (sometimes shorter) are common in the US – so it would be doable to rent out the property for a certain period of the year, thereby letting the management company handle administration and communication. But be careful here again, because taxes are also due on rental income!
Continuous costs and processes must be taken into account. First, it is important to be able to receive necessary mail, and especially bills, on time. Then you have to be able to understand the official documents, because sometimes the foreign language of bureaucracy can make things difficult. And finally, you have to be able to pay the bills, which can also be difficult and expensive internationally.