The Insurance Doctor

Category: Real Estate

  • Three Important Percentages To 
Remember When Buying A Home

    Request a FREE Consultation with the Insurance Doctor Here

    You just finished watching the latest installment of House Hunters on HGTV and begin to think to yourself why not me?   Purchasing your first home is not only the American Dream, for many young Americans it signifies a real transition into financial adulthood and responsibility taking on potentially the largest debt you will ever carry in your entire life.  If you are going to buy a new home, there are three financial rules you should consider before you sign on the dotted line.

    percentage-manThe 20% Rule
    I am a big fan of putting down 20% for two reasons.  One, by saving this 20% it will put you more into a forced habit of what you can save monthly which will likely indicate that you are ready to take on the new mortgage payment coming up with the home purchase.  Two, in most cases, you will avoid paying the Private Mortgage Insurance (PMI) which can make your monthly payment more expensive at the time you purchase the first home.  Far too often, new homebuyers stretch themselves by making a lower down payment, not recognizing how these extra costs will affect them.

    The 10% Rule
    It’s been my experience that when you purchase a new home you will tell yourself that you have your whole life to fix up the home.  However, after you start watching a few more HGTV shows and make a few trips to Home Depot, you’ll find yourself craving to make some renovations or buy some new furniture.  Beyond the down payment you need to save, plan that about 10% of the home value (i.e. a home at $300,000) will cost you an additional $30,000 in home improvements and furniture in the first year.

    The 1% Rule
    Beyond your mortgage payment, you should plan that if the home is valued at $300,000, you should set aside a kiddie of 1% to plan for the unexpected.  I couldn’t tell you today if it will be the roof, the water heater, or the A/C, but invariably there are going to be year to year blow ups that will cost you money from your savings.

  • 10 Dirt Cheap Places to buy a Vacation Home

    This article looks at places both in the USA and around the world where you can purchase a home and live in relative luxury on a poor man’s salary.

    1. Argentina:  Argentina has been a tourist mecca for generations and is a great producer of wine.  A 1500 sq, foot home can be had for about $140,000.  The cost of living is a fraction of anywhere in the US and it has the amenities that many Americans and Europeans expect.

    2. Mexico: Americans have known for a long time how inexpensive Mexico is as many Americans relocate, vacation and get medical treatment there.  For about $700/ month you can find a nice 1-2 bedroom home near a tourist area including internet and sightseeing.life insurance, New York City, financial services

    3. Quito, Ecuador: Some great things about Quito is that it’s already an ex-pat US destination and is uses the American dollar for currency.  There are places along the coast which are similar to US places.  Also, food is so cheap that it costs less to eat all meals out in restaurants than it would cost to go to the supermarket and cook for yourself at home.

    4. Cambodia:  Cambodia is super cheap!  A full-time housekeeper costs about $120/month.  A 4 room villa with a pool costs about $600/month and about $7/day to eat all meals out in most areas.  About $20,000 will buy you a nice 3 bedroom home on 1 or more acres.

    5. Vietnam: Vietnam has become a tourist destination.  You used to have to own a business to buy property however those rules have been relaxed.  For $25,000-$50,000 you can find a nice home in or near a resort area.  Food is very cheap as is labor so you can have a cook when there.  Also, because of demand, it’s easy to rent the house out.

    6. Thailand: Thailand is a legendary tourist destination for food, nightlife and amenities.  Like Vietnam, it’s easier to buy property now.  For $30,000 you can buy a high-rise condo with amazing views.  For $60,000 you can buy a 2-3 bedroom home with a beautiful garden and pool.

    7. Bulgaria: Bulgaria is stunning from the ancient architecture to the surrounding hills and countryside.  For $1,000/month you can live in comfort and like a king for $1500/month.  The average monthly salary is about $800 and for $20,000 you can buy a very nice home.

    8. Budapest, Hungary: Hungary is one of the oldest and architecturally stunning places in the world.  A $1,000 sq. foot home with some land runs about $90,000.  The people are kind and hospitable and there are about 50,000 ex-pats living in Budapest alone.

    9. Mississippi, USA: Mississippi offers comparable prices to Budapest and Bulgaria.  A plush 3 bedroom house can be had for $80,000.  The north offers music and jazz while the south has beaches and gambling.  There is great weather year round and cultural diversity.

    10. Louisiana: Louisiana offers a combination of southern charm and Cajun flavor.  You can buy a fully renovated historic 1800’s home for under $100,000.  There is fantastic wildlife and you can hire a cook for half the price of eating out.