Eric Tyson, the well-known corporate consultant, financial advisor, and author of numerous bestselling books, including Home Buying for Dummies & Real Estate Investing for Dummies, offered several great tips during his recent appearance as a guest on the radio show “Eye on Real Estate” with the host, Prudential Douglas Elliman’s one and only Dottie Herman.
Choose Capable Real Estate Professionals
Mr. Tyson encouraged homebuyers to do their homework before selecting real estate and mortgage professionals. He advised people to “learn enough so that you can evaluate these people and make a good hiring decision.”
Avoid Buyer’s Remorse
Eric Tyson encouraged potential homebuyers to take great care when determining how much house they can afford and avoid stretching their finances too thin by purchasing a house they can’t easily afford.
Use a Financial Planner
Mr. Tyson also recommended working with a professional financial planner as another strategy to assist both potential homebuyers and homeowners deal with the many financial issues that buying a home presents.
Build a Nest Egg
In response to an inquiry by host Dottie Herman about his recommendations for an emergency fund, Eric Tyson offered some insights. “I think for most people at a minimum they want to have 3 months worth of living expenses . . . if things are more volatile, you should have at least 6 months worth of living expenses.”
Refinance Reality Check
Any time mortgage rates are low, homeowners wonder if they should refinance. Eric Tyson advised homeowners to compare the amount of money they will save with the costs they will incur to determine if they will truly save enough money to recover the costs of the refinance in a timely manner.
Protect Your Credit with Electronic Payments
Although he expressed some reservations about setting up automatic electronic mortgage payments, Eric Tyson did say it was a good way for forgetful home owners to avoid negatively impacting their credit by inadvertently making late mortgage payments.
Life Insurance or Mortgage Insurance: Which is better?
Eric Tyson advised homeowners to opt for a traditional life insurance policy over a mortgage insurance policy. He elaborated by saying, “The life insurance decision comes down to how many years worth of your income you are trying to replace.”
Keep Home Documents In a Safe Place
Eric Tyson emphasized the fact that homeowner’s should keep their important documents in a safe and accessible place. This can be especially important for homeowners living in high-cost areas like New York City, and in some cases, providing excellent documentation could help you reduce capital gains taxes resulting from a home sale.
Use Caution with Financial Solicitations
Mr. Tyson encouraged homeowners to use caution when analyzing offers for financial services like life insurance offered by banks because often these solicitations do not represent the most affordable option for these types of services.
Notice Tax Assessments
Eric Tyson indicated that homeowners should not blindly accept their new tax value when their home’s value is reassessed, and he encouraged homeowners to lodge a protest of the reassessment if one is warranted.
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