Is A 15 Or 30 Year Mortgage Right For You?

Is A 15 Or 30 Year Mortgage Right For YouWhen someone is looking to purchase a house, they need to think about how long they want their mortgage to last. While a bank can structure a mortgage to last for any number of years, the most common lengths are 15 and 30 years. While a 30-year mortgage is typically more affordable, a 15-year mortgage is cheaper overall.

When someone is trying to decide how long they want their mortgage to last, there are a few important tips to keep in mind.

The Benefits Of A 15-Year Mortgage

There are a few important benefits that everyone should know about a 15-year mortgage. Some of the biggest benefits include:

  • With a 15-year mortgage, people are going to pay off their home more quickly. This will free up cash to spend in other places. Those who are looking to retire without a mortgage may want to go with a 15-year mortgage.
  • Next, a 15-year mortgage is going to come with a lower interest rate. Because the bank is going to get their money back more quickly, they are going to reward the borrower with a lower interest rate. Overall, the bank is taking on less risk.
  • Finally, a 15-year mortgage is also going to be cheaper overall. With a lower interest rate and a loan that is paid off more quickly, the bank is going to take less of someone’s money over the life of the loan.

The Benefits Of A 30-Year Mortgage

A 30-year mortgage has some notable differences when compared to a 15-year mortgage. There are a few important benefits that people need to remember. These include:

  • The monthly payments are going to lower. Those who are planning on paying for their children’s college education, or who envision a car payment in the near future, may want to have extra cash on hand to fund them.
  • As someone pays off their mortgage the interest paid on the loan is tax-deductible. Since more interest is paid on a 30-year mortgage, there will be greater tax savings as well. This means that people will get some of their money back.
  • Finally, a 30-year mortgage is also more flexible. During the loan, people may elect to make extra payments. This allows someone to pay off their home more quickly.

These are a few of the most important points people need to remember when trying to decide between a 15-year and 30-year mortgage.  As always, call your trusted home mortgage loan professional to discuss the options available for your personal situation.

The Most Commonly Searched Household How-To Remedies

The Most Commonly Searched Household How-To RemediesOwning a home comes with a lot of responsibility. Many of the responsibilities that people think about involve home maintenance. There are few things that frustrate a homeowner more than having repair and maintenance bills come up. At the same time, it is important to address these properly.

For this reason, it is important for everyone to understand the most common how-tos people search for. This will give someone a glimpse into some of the responsibilities he or she might face when owning a home. Those who can handle these how-tos can save money on maintenance costs and repair bills.

How To Unclog A Drain

One of the most commonly searched how-tos is how to unclog a drain. Some of the drains that might get clogged include kitchen drains, sink drains, and bathtub drains. When these drains are clogged, water can back up and make the equipment unusable.

In order to unclog a drain, it is important to consider the various options available. Some people use a “snake” to unclog a drain. Other people use a liquid, such as Drano.

How To Stop A Leaky Faucet

Another how-to that people frequently have to handle is a leaky faucet. A dripping faucet can lead to significant increases in someone’s water bills. Furthermore, the dripping noise can also keep people up at night.

Sometimes, the handles on the faucet simply need to be tightened to stop the leaky faucet. In other cases, there might be a loose washer underneath the sink somewhere. These are some of the common causes of a leaky faucet.

How To Patch And Repair Drywall

Another common house issue that people sometimes need to handle involves drywall. Patching drywall can be a complicated process depending on the location and size of the drywall.

Everyone who is thinking about patching drywall should understand the steps involved. This includes how to make the drywall smooth in addition to the various adhesives and tools involved.

Understanding Household How-Tos

These are a few of the various how-tos that people might have to face during homeownership. Homeowners that can handle these how-tos will be able to save money on maintenance and repair bills down the road, provided they are handled properly.

If you are in the market for a new home or if you are interested in refinancing your current property, be sure to contact your trusted home mortgage professional.

Tips On How To Get The Home You Want In A ‘Seller’s Market’

Tips On How To Get The Home You Want In A 'Seller's Market'A “seller’s market” happens when there are more potential buyers than homes for sale. In a seller’s market, people looking for a home may feel frustration and not easily find the home that they want. When they find a home for sale that they like, the seller of the home may receive multiple competitive offers at the same moment.

The seller is in an excellent position when this happens. Sellers can pick from the purchase offers to choose the one they like the most. Even if an offer is the same as another one, sometimes it is not the offer chosen by a seller.

Causes Of A Seller’s Market

Seller’s markets arise because a particular area is very desirable. There can also be limitations that do not allow any further development of residential properties in an area. Well-established neighborhoods in up-scale market areas are typically likely candidates for becoming a seller’s market. Easy credit financing is another contributing factor.

Check the median sales price as a percentage of the listing price for an area. If it is greater than 100%, this is a seller’s market.

Buying A Home In A Seller’s Market

If you must live in a certain area, and there are extremely compelling reasons for buying a home in a seller’s market, then expect to pay more and work harder to get the type of home that you want. Here are some tips about how to buy a home in a seller’s market:

1. Work With A Top Real Estate Professional: You want to go into this challenge along with the best professional help that you can find. You want to choose a top real estate agent that specializes in the market area that you desire. They should know the neighborhood intimately and represented both buyers and sellers in that market.

2. Pre-Approved Credit Commitment: Apply for mortgage approval before looking for a home to buy. Request more than the amounted needed and pay for a written loan commitment that guarantees the financing is both approved and legally-committed for the time, plus a little more, that you need to find a home to buy.

3. Move Fast: Make a purchase offer as quickly as possible when a new home listing comes up that meets your criteria.

4. Cash Earn Money Deposit: Offer the seller earnest money in cash that is a significant amount to accept the purchase price you offer. By cash, we mean physical dollar bills of around $5,000 or more. Cash makes people sign a deal.

5. Offer More Money: If you want a specific home, make your purchase offer 1% or more than the asking price. Also, offer in writing to match any other competing offers plus a bit more. You may get into a bidding war and have to pay much more to get the home.

6. Off-Market Properties: Seek to buy a property that is not yet for sale. Ask your agent to call people who they sold a home to before. Ask everyone in the local area if they know of one that is like the one you want. Knock on doors of homes that are one you might like to buy and ask the owner if they will sell the home.

Summary

To get the home you want, try to be flexible with the basic criteria of what type of home it is. Work with a great real estate agent. Move fast and use our tips to be competitive with other potential homebuyers.

If you are interested in purchasing a new home or in refinancing your current property, be sure to consult with your trusted home mortgage professional.

5 Excellent Pathways To Home Ownership For Millennials

5 Excellent Pathways To Home Ownership For MillennialsMillennials are a huge socio-demographic group of over 83 million people. Many of them want to buy a home but face challenges that their parents did not necessarily have. Homes are more expensive. In most places, home prices rebounded to exceed the pre-2008 economic collapse values. Moreover, home prices continue to go up.

The encouraging news is that there is home financing readily available and mortgage interest rates are still reasonable. Even if it is more challenging, the greatest investment that most Americans can make is buying a home. Paying rent is only helping the landlord get rich. Homeownership is still highly desirable and a part of a wise long-term investment strategy.

Here are some tips that millennials can use to become homeowners.

Save For The Down Payment And Build An Excellent Credit History

The best rates for home loans are for those with an excellent credit history who can put down 20%. It is possible to borrow the down payment. The problem with this strategy is that the cost of the loan is higher. The mortgage rate may be higher and the lender may require private mortgage insurance (PMI). PMI pays off the loan balance to the lender if the homeowner defaults on the loan; however, it does not protect the homeowner’s equity in the home or any down payment. PMI just adds another monthly expense.

Create Non-Location Dependent Income

Home prices are somewhat dependent on the local economy and the employment available in the local area. By creating non-location dependent income through the “gig” economy. Work as a freelancer or a person who telecommutes by working from home. With this income, you will be freer to look for a home in a rural area or an area where the home prices are lower.

Take Advantage Of First-Time Homebuyer Programs

Many first-time homebuyer programs are offered by programs of the federal government through the Housing and Urban Development (HUD) and other agencies. Be sure to investigate those possibilities when considering buying a home.

Hunt For A Home In Low-Cost Areas

Use the online systems when searching for a home to compare two things, 1) the median price of homes for each area and 2) the cost of living for each area. The areas with low median prices and that have a lower cost of living are usually easier places to buy a home.

Partner With Others

A home-buying partnership is something many are using to make owning a home more affordable. Multigenerational ownership is used by many families to buy a large home together and share it. Other partnerships can be made among individuals, who are not relatives, to share ownership. Choose ownership partners very carefully and be sure to have competent legal counsel when creating a written ownership agreement.

Summary

Millennials are challenged with new obstacles when seeking to buy a home. The strongest challenge is the cost of homeownership. However, there are many clever ways to improve the chances of enjoying an affordable ownership situation. Be patient and do not give up. Work with a REALTOR® who understands the challenges and is an expert in the area where you are thinking about buying and with a trusted home mortgage professional to find the best financing options for your situation.

The Basic Home Security Checklist Every Home Needs

The Basic Home Security Checklist Every Home NeedsDid you realize that only around 17 percent of the homes in the United States have a security system? Leaving your residence unprotected can come back to haunt you in the future.

The longer you wait to find and fix security problems, the harder you will find it to keep your family safe. Taking the time to inspect your home is a great way to see where security problems exist. With the help of the checklist in this article, you can secure your home and keep burglars at bay.

Check Your Existing Security Alarm

If your home does have a security alarm, you need to make sure it has all of the latest features and updates. Some homeowners think that a security alarm is something they can set and forget.

One of the main things you need to make sure your alarm has is monitoring. With monitoring, you will be able to get the authorities to your home in a hurry in the event of a burglary.

The key to getting the right monitoring is working with the right security company. Before using a particular company, find out more about how they will monitor your home. Paying a bit more for high-quality monitoring will be worth it considering the safety it will add to your residence.

Check Your Windows and Doors

As you inspect your home, be sure to pay close attention to your doors and windows. Usually, these are the areas that a burglar will target when trying to break into a home. If the windows or doors are old and not working properly, it can put you and your family in a lot of danger.

This is why replacing damaged doors and windows is so important. You may also want to think about adding window alarms to your home. With these alarms in place, burglars will not stand a chance when trying to gain access to your residence. An experienced security company will have no problem installing these window alarms for an affordable price.

New Outdoor Lighting is a Good Idea

Another factor you should pay attention to when inspecting your home is the condition of the exterior lighting. If there is limited illumination on the outside of your home, you need to fix this immediately. Leaving the outside of a home dimly lit is like sending an invitation to burglars. This is why investing in high-quality landscape lighting is a good idea.

Things like motion-sensor lights can help you keep burglars away. Instead of trying to find and install these lights on your own, you need to hire professionals. They will be able to get the new lights in place in a hurry.

They can also help you choose the right places to put these lights.

A Great Investment

Instead of looking at additional home security as something you have to do, you need to view it as something you want to do. The money you invest in better home security will be worth it in the long run.

Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise Strategy

Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise StrategyHave you ever seen a scientific experiment with things growing in a Petri dish? This is a metaphor for how neighborhoods grow as well. Things in a Petri dish grow towards the areas that have more nutrition to attract them and repel from areas that have bad things that they do not want.

A popular neighborhood does a similar thing. It may have boundaries that are certain street or other physical barriers. Nevertheless, if the area builds its popularity, it tends to grow and might also cause an improvement in the surrounding areas.

Homes In Adjacent Neighborhoods

An adjacent neighborhood is one that is right next to another one. For example, in the Los Angeles Metro Area, just to the west of Beverly Hills is Century City. Century City is a fine area so it is usually called by its name. However, properties in Century City are also “Beverly Hills – Adjacent.”

This nomenclature is a bit like identifying a “used car” as a “pre-owned vehicle.” It is a marketing technique to say a home is located in a neighborhood adjacent to a popular one. However, those homes are indeed special. If the popular area appreciates significantly, this may have a positive impact on the neighborhoods surrounding it.

Mapping Adjacent Neighborhoods

It is a terrific strategy to look at the opportunities for buying a home in an adjacent area near the best neighborhood in town.

Use Google maps to find the map that includes the best area of town and what is around it. Then, research the listing prices for homes that are within the best neighborhood and those that are in the adjacent areas. For comparison, look for homes of the same style, type, and size

Zoom in on the satellite view of the streets to get a close look at the places just inside and just outside the official boundaries of a great neighborhood. It may be surprising to find areas that have a significant pricing differential, even just for a few blocks on a few streets. Those particular areas are worth further exploration.

Barriers To Progress

Be aware that physical barriers are stronger than psychological ones. A river, a very wide street, a public park or another major physical barrier can permanently separate a neighborhood from another adjacent one. These may block a growth opportunity.

What to look for are adjacent areas where the barrier between the neighborhoods is psychological and there is nothing at all very different between the great neighborhood and two blocks down the street. These few blocks in the adjacent neighborhood are where one might discover a treasure. It is possible to find a home that has a slightly better price. It might appreciate at the same rate as the best neighborhood next door or faster to catch up with other similar homes.

Summary

Using the adjacent neighborhood strategy may help avoid buying a home only in the most expensive areas that may be over-priced. Many find that the adjacent areas are just as nice and a home there may be a better value.

Work with a real estate agent that knows the area well. Your agent should be able to help you discover the up-and-coming adjacent areas and properties that might offer an enhanced investment opportunity. As always, your trusted home mortgage professional is the best resource for current financing options.

3 Crucial Questions To Ask Before You Co-Sign A Mortgage

3 Crucial Questions To Ask Before You Co-Sign A MortgageA mortgage is a significant responsibility. For this reason, many people have someone co-sign with them on their mortgage. Before agreeing to co-sign on any mortgage, it is important to ask the right questions. There are several crucial questions that everyone should ask before they co-sign on someone else’s mortgage.

What Does It Mean To Co-Sign On A Mortgage?

Before signing that piece of paper, it is important to understand the responsibilities involved. Co-signing on a mortgage is a little bit different than co-signing for a credit card.

The person who is buying the home, the primary signer, lives in the property in question. The co-signer, typically, does not. On the other hand, both people signing the mortgage take on the financial risk of the mortgage. Before co-signing, understand the financial risk involved.

Is It Smart To Trust The Borrower?

One of the most important questions to ask is whether or not the borrower can be trusted. Remember, if the primary signer cannot make the payments on the mortgage, the co-signer is on the hook for those payments. Before placing any financial assets on the line, make sure the borrower can be trusted to maintain gainful employment, make smart financial decisions, and keep up with the mortgage payments.

What Are The Risks Involved?

There are a few risks that people need to think about when it comes to co-signing a mortgage. First, think about the risk to the credit score. If the primary signer makes late payments, these can impact the co-signer’s financial health and credit score as well.

In addition, there are relationship risks that everyone should think about. Most people co-sign a mortgage for a family member or friend. Having this type of financial arrangement can complicate relationships among loved ones.

Understanding The Process Of Co-Signing A Mortgage

These are only a few of the many questions that people need to ask when they are thinking about co-signing on a mortgage. Everyone who is considering co-signing must consider the financial health and responsibility of the primary signer in addition to the risks they will be taking on. Co-signing on someone else’s mortgage is a big decision. Consider the various factors involved in this decision.

As always, speak with your trusted real estate and mortgage finance professional for advice on your personal situation.

3 Signs You’re Not Ready To Buy A Home

3 Signs You're Not Ready To Buy A HomeThose who are looking at buying a home need to think about whether or not they are truly ready for this responsibility. When someone takes out a mortgage, this is frequently the largest loan someone will ever apply for in their life. Furthermore, owning a home also means homeowners insurance, real estate taxes, home maintenance, and home repairs.

There are a few signs that signal someone is not ready to buy a home. Identifying and rectifying these situations ahead of time will ensure that someone is the right position to take on the responsibility of homeownership.

Too Much Debt

One of the biggest signs that someone is not ready is own a home is too much personal debt. A mortgage is another (albeit different) form of debt. It someone already has a large amount of debt, they might not be able to handle an additional loan.

Some forms of debt that people might have include student loans, credit card debt, and car loans. Cutting down this debt before applying for a mortgage will make someone more competitive when applying for a mortgage.

Not Enough Savings

In addition to reducing debt, it is important to build up savings as well. First, people need to have enough money for the down payment. It is highly unlikely that a lender is going to hand out a loan to someone who is not able (or willing) to put up any of their own capital.

In addition, savings are important for potential home maintenance or home repair costs. Owning a house is a major financial investment. People should be able to put up some of their own money when buying a home.

Location Is Not Determined

People move from place to place. It is a reality of school, employment, relationships, and more. At the same time, it is hard for someone to buy a house they don’t know where they want to live.

While this might seem obvious, this factor is frequently overlooked. Think about where “home” is going to be before deciding to buy a home. Consider the overall cost of living in that location, the potential commute, and the potential HOA.

Buying A Home

It is important for everyone to think about whether or not they are truly ready to buy a home before applying for a mortgage. This is a significant responsibility that should not be taken lightly.

Talk with a trusted home mortgage professional to discuss the options that will get you on the path to homeownership. Although it may take time and planning, buying a home is absolutely possible for everyone.

How Much Of A Down Payment Should I Make On My Home?

How Much Of A Down Payment Should I Make On My HomeThere are a lot of steps that people need to take when buying a home. One of the most common issues that people discuss is the down payment. Most banks will require a down payment so that they aren’t the only ones taking on the risk of buying a home. The common question people have is how much of a down payment they should apply.

The Rule Of Thumb

Most people have heard about placing 20 percent down on a house as a solid rule of thumb. This number has been passed down from prior generations who purchased houses with similar down payments.

On the other hand, the price of housing has risen over the past few decades and this down payment might not be possible for some people. While 20 percent down might work for some people, it might not be feasible for others.

Other Considerations

There are several additional factors that homebuyers need to think about. First, how big of a down payment is the bank requiring? Some banks might not lend to someone at all if they don’t reach a certain threshold. In other cases, the lender might ask someone to purchase something called private mortgage insurance, often abbreviated PMI.

This is an insurance policy that the borrower will have to purchase for the lender. If the borrower loses the home in foreclosure, the lender gets its money back through this insurance policy. Obviously, borrowers do not want to have this added expense. This is where the down payment is important.

In addition, banks might also be willing to lower the interest rate on the mortgage if the borrower increases the size of the down payment. With a lower interest rate, this can save someone a substantial amount of money down the road. Try to see if the lender will lower the interest rate in exchange for a larger down payment.

Deciding The Down Payment

These are a few of the many factors that homebuyers should think about when thinking about the down payment. While nobody wants to pay more than they should, the down payment is only one of the financial aspects people need to consider.

As always, call your trusted mortgage planning professional to help you decide on the best solution for your personal situation.

How Much Money To Budget For Home Maintenance

How Much Money To Budget For Home Maintenance1Owning a home comes with a lot of responsibilities. One of these involves home maintenance. Sometimes, people are surprised by the size and frequency of home maintenance costs.

In order to reduce the stress that comes with home maintenance, it is important to plan ahead of time. This means budgeting for the inevitable costs that come with home maintenance. There are a few systems that people can use to estimate their home maintenance costs.

The Percentage System

One of the most common systems that people use is the percentage system. In general, the amount of money that people spend on maintenance is directly related to the size of their home. The larger the home, the more money someone is going to spend on maintenance.

Most people will spend between 1 percent and 4 percent of their home’s value every year in maintenance costs. Older homes are going to have more maintenance costs than younger homes. For example, if a home is worth $300,000, someone is going to be spending between $3,000 and $12,000 per year on upkeep.

The Square Footage System

The range above might be too large for someone to budget accurately. Therefore, a lot of people also use the square footage system. Again, the larger the home, the more someone will spend on upkeep.

In general, someone should allocate $1 dollar per year per square foot of home. For example, if someone’s home is 2,500 square feet, they should allocate about $2,500 per year in home maintenance.

Some of the downsides of this method are that it does not take into account the location or age of the home. Keep these factors in mind as well.

Home Maintenance Is Different Than Home Repairs

Home maintenance costs are very different than major repairs. The idea of maintenance is to prevent repairs from arising. If someone has to replace their HVAC unit or take out faulty wiring, this does not count as home maintenance costs.

With this in mind, it is important for everyone to budget accurately for home maintenance and to make sure these tasks are completed on-time. Proper home maintenance can save money on homeownership by preventing major repair bills from coming up down the road.

And any time you have home maintenance questions, remember to ask your real estate professional. They have a lot of experience dealing with every type of home repair and a list of local referral maintenance providers.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional to discuss financing options.