Frequently Asked Questions
Potential home buyers have seen housing more affordable now than at any other time in the past 30 years. Loan programs are available that include assistance for the down payment, which is so often a stumbling block for the first time buyer unable to save money due to high rent payments. Also, lenders have relaxed some of the qualifying ratios permitting borrowers to have a higher debt to income ratio.
Check with your local bank for a pre-qualification loan approval, which will provide you with a guideline to begin your home search. Home ownership with its tax write-offs for interest and tax payments and potential for equity building can be much more than a stack of rent receipts.
The old rule of thumb is that it pays to refinance if prevailing rates are at least two percentage points below what you currently pay. But that doesn't take into account whether you plan to stay in your home long enough to recoup the cost of refinancing
Costs to consider - To figure out whether you can save money, you'll need to consider three things: How much lower your monthly payments will be, how much it will cost to do the refinancing and how long you plan to stay in the home.
When you talk to your lender, tell them what you paid for your home, how much you will still owe and what you are paying per month. Then ask them what products they are offering and how much your monthly payments would be on each.
To get the best idea of savings, have your lender itemize all expenses involved. In addition to points (fixed fees that can run from zero to four percent of the loan) there are fees for application, title search, a credit report, lawyers and other services. This can add up to as much as 5% of the loan amount.
Length of Stay - After totaling the costs, you need to determine how long you plan to stay in the home to recoup what you have paid out to refinance. If you are planning to stay in your home more than seven or eight years, you'll probably want a fixed-rate loan. That erases the uncertainty over how much the rates may rise over the life of the loan. But if you expect to move before then, consider either an adjustable-rate loan or a balloon-reset loan.
Today there are many options for home loans. Lenders are competing for your business and you owe it to yourself to shop around for the best possible deal.
Begin your process by developing a list of possible lenders. Talk to people who have recently purchased homes as well as real estate professionals.
Ask each lender about mortgage options and rates. Nearly every lender offers fixed-rate mortgages with 15 and 30 year terms. These loans offer monthly payments that stay the some.
Most lenders also offer adjustable-rate mortgages (ARMs). These loans provide a lower interest rate at the outset, but the rate and your payment can change according to economic conditions.
A third type of mortgage has a convertible adjustable rate. This is an ARM with an option that allows you to convert it to a fixed-rate mortgage after a certain period. It offers the lower initial interest rate of a standard ARM with the possibility of locking into predictable payments later.
Balloon mortgages have a fixed interest rate and start with fixed payments. After approximately five to seven years, the mortgage ends with a single "balloon" payment for the remaining principal. The term of the mortgage is short so the interest paid is significantly less.
In some cases you may qualify for special loans provided by government organizations or financing programs available through your lender.
The best way to begin the process of selling a home is to use a little role reversal. Take a tour of your home with a real estate associate and observe it as a buyer would. Remember -- people looking at your home will be as critical as you'll be when your search for a new home begins.
Preparing your home for the real estate market doesn't have to mean costly additions or remodeling. In fact, cleaning, painting and minor repairs may be all that are necessary to make your home seem well cared for and a better value than homes of comparable price.
Potential buyers want their new homes to be perfect. It's the little things you don't even notice anymore -- the chipped paint on the garage door, the overgrown hedge or the burned-out entry light -- that can make or break a sale.
First impressions count. The exterior of your house is the first thing prospective buyers see so it's important that your home has strong "curb appeal".
The key to successfully preparing the interior of your home is to make sure it is clean and uncluttered. Don't let dirt and lack of storage space overshadow your home's positive selling points.
Most buyers will have their own ideas on major changes for the house so you don't need to over-improve. Just make sure undone minor repairs and improvements aren't reasons for buyers to offer less than your asking price.
Protect your investment with a Home Warranty.
A home warranty will protect you against the unexpected cost of repairing or replacing mechanical components in your home which fail due to normal wear and tear.
- Up to 12 months FREE listing coverage
- 13 months of coverage for the Buyer
- Low $50 Deductible per failure
- Choice of Contractor
- 24-hour Customer Service
- Coverage includes: Heating and air conditioning systems, roof leaks, water heater, appliances and much more.
Ask your REALTOR for an application today!