5 Ways for Same Sex Couples to Prepare to Own Their First Home

Many same sex couples make the mistake of not preparing before purchasing their first home. The result is unexpected delays and disappointments. Following are five ways for same sex couples to prepare to own their first home.

images1. Calculate the Cost of Owning a Home

The first step is to determine how much home you can afford. You can do this by applying for preapproval from a mortgage lender. Before applying, it would be wise to obtain a copy of your credit report from one of the major reporting agencies and checking to be sure that is no inaccurate information included. If there are inaccuracies, contact the reporting agency to have it corrected before applying for preapproval. Note that the major credit reporting agencies are required under the Federal Fair Credit Reporting Act to provide individuals a free copy of their report once per year.

2. Open a Savings Account

While you are searching for your home, it would be wise to save, or add to your savings, the money needed for your down payment and for necessities that you will need once you move in. Necessities may include a lawn mower, new furniture or other items that you would like to personalize the home. You will also want to save some funds to pay for emergency repairs that may occur once you move in. For example, the furnace may go out or your roof may start leaking. It is important to have the funds on hand for those types of repairs should they arise.

3. Organize Your Financial Information

Before applying for preapproval for a home mortgage, you should make sure that you have all of the documents at hand that may be needed. Generally, lenders require your previous year tax returns, statements from your savings and other accounts, and your latest pay stubs. Organize those documents and take them, and any other documents the lender you choose might require, with you when you go to apply.

4. Understand Mortgage Loans

There are a number of options available to low and moderate income buyers to obtain a mortgage, including conventional, Federal Housing Administration (FHA) and Veterans Administration (VA).

Conventional mortgages are those that are not guaranteed by a government agency. These types of loans generally require more money down and somewhat strict credit requirements.

FHA guarantees loans from qualified lenders resulting in more flexible lending practices and lower interest rates.

VA loans are guaranteed by the Veterans Administration and obtained through qualified lenders. These loans do not require a down payment, but do require a funding fee of approximately one to three percent of the loan amount. VA loans are available to service members and veterans, spouses and other eligible beneficiaries.

Note that the above is a sampling and are not the only mortgage options available.

5. Develop a Perfect Home List

Make a list of the type of home that you would like to purchase and what it should include. For example, would you prefer a ranch, Cape Cod or an old farmhouse? Would you prefer that it has a garage, a small lot or acreage or a specific type of location? Once you have made your list, you should prioritize it. List the things that you must have at the top of the list. It is unlikely that you will find a home that has everything on your list so you should be prepared to be flexible. If you find the perfect home but it does not have some aspect that you wish, perhaps it is something that you can add once you move in or you may determine that it is not that important considering the other benefits of the home.

Once you are prepared, it would be wise to seek the assistance of an LGBT real estate agent at GayRealEstate.com. He or she will have the expertise to guide you through the home buying process and answer any questions that you may have.

4 Reasons for Same Sex Partners to Own Their Own Home

Owning your own home allows you to experience the pride of home ownership. For many same sex couples, the security of owning their own home is an accomplishment that they look forward to once they have established a secure relationship. There are many benefits to owning a home compared to renting.

download1. Freedom

When you own your own home, you have the freedom to decorate and make landscape changes, make noise, have pets and allow anyone you would like for a long visit without getting anyone’s permission. Any improvements that you make to the home will increase its market value.

The exception to this benefit is when you purchase a home in an area that has a home owners association or other organization that makes rules to maintain the value of the homes in the area. Those organizations generally have rules in place related to the type of modifications you can make to the home, noise limits and other restrictions. Before purchasing a home governed by such an organization, you should review their rules to ensure that they do not infringe on anything that you want the freedom to do in or with your new home.

2. Tax Breaks

The United States tax code allows home owners to deduct some of the costs involved in purchasing your home on your first tax return after your purchase. The code also allows you to deduct the amount that you pay in mortgage interest and property taxes every year.

3. Stability

The stability of owning a home allows you to make lasting friends and participate in community activities. If you have children, owning a home allows continuity of their education by not being required to move to different schools when you change rental units.

Although many people stay in the same rental unit for many years, most people move every few years for reasons including increases in rent or incompatibility with neighbors or the landlord. If you choose a fixed rate home mortgage, the payment amount cannot be increased during the life of the contract. This option offers stability in knowing each month exactly how much your house payment will be each month.

4. Equity

Equity is the difference between the amount owed on your home and its fair market value. Making regular mortgage payments helps you build equity in the home, unlike rental payments that you never get back.

Owning a home can be compared to a savings account. When you sell the home, you will be paid the funds left after payment of prorated items such as property taxes, real estate agent fees and the balance of your mortgage. The money that you will receive is called capital gains. The federal government allows an exemption, as of 2014, of $250,000 for a single person and $500,000 for a married couple. If your capital gain falls below that amount, you will not be required to pay federal taxes on the money that you realize from the sale of your home. There are requirements that must be met in order qualify for the exclusion, including that you must have lived in the home for at least two years out of the previous five years.

If you are ready to purchase your own home, it would be in your best interest to hire an LGBT real estate agent at GayRealEstate.com to assist you with the process… it’s free. He or she will be up to date on the real estate laws that affect same sex couples and will protect your interests throughout the process.

Home Buying Tips for Same Sex Couples

When same sex couples purchase a home, there are some legal protections that can be put into place to protect their children in the event one or both of them die. The protections that would be best for you will depend on your particular situation. Following are some of the options that are available, depending on the state that you live in.

Types of Ownership

When you purchase a home, you can choose how you want to take ownership. Following are some of the choices that are available.

imagesJoint tenancy with right of survivorship means that you will both own and use the home equally. When one of you dies, your partner will automatically own the home. This may be an option if you are both parenting the children and the surviving partner is a legal guardian and will continue to care for them after the death of the partner.

Tenancy in common allows each of you to will your share of the home to anyone you choose, including your children. In order to protect your children with this option, you can create a will making them the beneficiary upon your death.

Sole ownership where the home is owned by one of you rather than both is an option. The legal guardian of the children could purchase the home in his or her name and will the home to the children. The problem with this option is that the partner whose name is not on the home will not legally own any interest and will have no rights should you breakup or die unless you have created a will that includes them.

Wills

Creating a will allows you to distribute your assets to anyone that you choose. To protect your partner and your children, you can include them as the beneficiary of your home and any other assets that you choose.

If you die without a will, your estate will be distributed according to the laws in the state that you live in. Most states dictate that the estate is distributed between the spouse and the children, or to the children if there is no spouse. In the case of same sex couples who are not married or in a legal relationship, the home would be distributed to the children only if they are their natural children or are adopted. This means that if the children are the natural issue of one of the partners in a same sex relationship and the other partner dies, his estate would not go to the surviving partner or his or her children.

Estate Planning

Most people choose to create a will as well as selecting the home ownership option that works best with their particular situation. There are also other estate planning options available that can be used to protect both your partner and your children in the event of your death including revocable living trusts.

Real estate and estate planning laws vary by state. It would be wise to consult with a real estate attorney who is familiar with LGBT issues when considering the options available to you and your same sex partner.

If you are in the market to purchase a home, you should hire an LGBT real estate agent at GayRealEstate.com to assist you. He or she will help you find the right home and protect your interests throughout the home buying process.

5 Tips for Same Sex Couples and Home Owners Associations (HOA’s)

Home Owners Associations, (HOA) is an organization of property owners in a subdivision, development or condominium complex that administers the rules and covenants of that neighborhood or community. Covenants are legal, contractual agreements that are said to run with the land, meaning that the covenant cannot be separated from the land and is transferred with it when the property is sold. They are used to enforce certain standards of the community to keep property values from falling and can prohibit a number of things, including the color you can paint the home, fences, landscaping and building materials.

imagesRules are made and enforced by the HOAs in relation to property owner conduct, common areas such as pools and other amenities and even how many pets , what size and what type you can have. Following are 5 tips for same sex couples and Home Owners Associations.

1. Before purchasing a home governed by an HOA, ask to see the rules and regulations or Codes, Covenants and Restrictions, CCRs. Review those documents carefully to make sure that you are comfortable living by those rules. For example, if you have four pets but the rules only allow you to have two, are you willing to find other homes for two of your pets?

2. Ask to see the HOAs financial statements. They are generally not obligated by law to show them to you if you are not a homeowner. Many HOAs are nonprofits and, as such, you may find their statements from the Secretary of State or other government office, depending on the state that you live in, that maintains corporate nonprofit licenses and financial statements.

3. Read the board of directors meeting minutes to find out if any special assessments are coming up. Special assessments are funds that are needed by the HOA for unexpected expenses or extraordinary repairs. They get those funds by charging each homeowner with a portion of the cost. That assessment is in addition to your normal HOA dues. You may also find out about any bylaw or other changes in how the community will operate that may have a direct effect on you.

4. Talk to your potential neighbors. This is an excellent way to find out how the HOA is doing financially and whether the homeowners are happy with the current board of directors. In addition, you will get a feel for the type of people living in the neighborhood and may even make new friends. This is especially important for same sex couples so that they can avoid the frustration of not being welcomed into the community.

5. Find out if the home you are considering purchasing is in violation of HOA rules. If it is, you will be required to correct the problem to avoid being fined by the HOA. The rules of all HOA organizations allow fines, liens and other consequences for noncompliance with its rules. Note that some states have laws dictate how HOAs can operate along with the notice requirements for violations of the HOAs rules. You should check your state’s HOA laws so that you are aware of what an HOA can legally get away with.

Living in a community that is governed by an HOA can be great for maintaining your property values and having someone else take care of the community amenities. Problems arise when the HOA does not do a good job or overly restricts what you can do on your own property. The above 5 tips for same sex couples and home owners associations can help you avoid bad HOAs that can end up costing you a lot of money and stress.

An experienced local LGBT real estate agent at GayRealEstate.com will also know the ins and outs involved in purchasing a home in an HOA community and can guide you through the process while looking out for your best interests.