Home loans are not a one size fits all business, in fact there are as many loan options as there are homes out there. Therefore, you must do your research to find a dream loan that will let you get your dream home.
While there are numerous types of loans, the most common are FHA loans, conventional loans and VA loans. Then within these mortgages you can find different rates for each of them including fixed rate, adjustable rate (ARM) and interest only choices. Overwhelmed yet? Let’s start from the top.
The Federal Housing Administration (FHA) mortgage insurance program is run by a department of the federal government and offers loans to all kinds of borrowers, not just first-time home owners. This allows the government to insure the lender against losses from things such as buyer default.
This is common among first time home buyers because it is a program that offers the lowest initial investment, allowing down payments to be as low as 3.5% of their purchasing price. This loan is also known to be easier for approval and are more forgiving of those with low credit scores and in the unfortunate event of bankruptcy or foreclosure. However, with down payments so low the borrower must pay for mortgage insurance which increases monthly payments that can add up quickly.
Conventional loans on the other hand are not insured by a government entity. They are made exclusively in the private sector which allows the borrower to avoid having to have mortgage insurance entirely. If you make a down payment of more than 20%, you aren’t required to have insurance, however if your down payment is less than 20% you are required to have PMI.
Therefore, if you can afford the 20% down payment, conventional loans are somewhat of a no-brainer allowing you to avoid extra costs on insurance all together. Often times, PMI insurance rates are still lower than FHA insurance rates however it depends on the down payment amount you have saved up.
The US Department of Veteran Affairs also offers VA loans to military service members and their families. These loans are guaranteed by the federal government, like FHA loans, however the advantage here is that these borrowers receive complete financing for their home purchase meaning no down payment is required whatsoever.
Each case is a little different with many aspects to consider. For those with a 20% down payment however, conventional loans also offer fixed rates. These mortgage loans retain the same interest rate for the entire payment plan. This allows for each monthly payment to remain the same without change even in plans as long as 30 years.
On the flip side there are adjustable-rate mortgages (ARMs) that have fluctuating interest rates that will change from time to time. Typically an ARM loan will have an initial period of fixed rates and then change each year after that. This is seen as more of a “hybrid” loan due to having aspects from both fixed and adjustable.
Interest only loans are those in which the borrower only pays the interest on the loan in monthly payments for a period of time. This allows for lower initial payments and a possibility to qualify for larger loan. However during this time the loan amount remains unchanged unless the borrower pays in addition to the interest only payments.
Depending on how long you plan to own your home, ARMs and interest only loans may make sense, but pose riskier options than fixed-rate mortgages.
Before deciding, carefully evaluate all your needs to determine which mix best fits your budget.
It may be frigid temps in Colorado right now, but before you know it, spring will be here and that means prime house selling season.
If you’re planning to sell in 2017, it’s time to get ready. In terms of time, 12 weeks seems like an eternity, but in reality, it will be end of summer before we can blink. That’s why taking a few items at a time during these winter months can make the task of selling your home in 2017 turn into a light summer breeze instead of an arctic blast from the north.
Selecting your agent is the first task at hand and as you know, I’m always here to help you navigate these kinds of decisions for timing, pricing and optimal sell-ability. I also have a team that works to get your home market-ready. From a stager to a photographer, you can be assured each step of the way I can help you have the best experience possible.
In the meantime, there are a number of things you can do yourself that don’t have to be huge draws on your finances, but can make remarkable differences in the appeal and value of your home as you prepare to sell.
First, buckle down and get repairs you’ve been putting off done. You may not care about molding that has knicks and scratches, but these little cosmetic fixes can make a world of difference to a buyer who is carefully inspecting every inch of your home. Next, start clearing out the clutter. All those knick knacks, piles in closets and junk drawers can be tidied visually opening up the vast spaces in your home. Painting walls and cleaning carpets are two of the “best bangs for your buck” you can make. As winter turns into spring clean windows and perform basic maintenance on home systems so that all the features of your home can shine.
With all the excitement of pending travel plans we can sometimes overlook the obvious, our own home. Just as you plan a trip, plan to protect your greatest asset while you enjoy your upcoming adventure.
There are several precautions you can take that don’t have any costs associated with them that can ensure that upon your arrival your home is in the same condition as when you left it.
Most importantly, lock everything. This seems obvious, but often windows are left unlocked providing easy access for burglars. These kinds of oversights create crimes of opportunity that can be easily avoided. I recommend also adding a stick in the tracks of your sliding glass door and windows. This can be another level of protection.
Some tips to ensure your property is safe during your vacation include:
1.Have a neighbor keep an eye out to bring in papers and mail
2.Use timers on lights to mimmick your regular at-home patterns
3.Don’t share vacation activities on social media
4.Put valuables in a home safe or your bank safe deposit box
5.Don’t leave spare keys out, provide a set to your neighbor for use
The best way to ensure your home is protected is to make it look lived in. Hire a house sitter who can take out trash, mow the lawn and show human activity should anyone be watching the home. Take a few precautions so you can fully enjoy your vacation.
If you can get all these little tasks, which add up to big improvements, done before the showings begin you can reduce your stress and focus on the bigger tasks of moving from your home such as packing and storage of belongings.
If you start now, you’re less likely to end up surprised once the For Sale sign goes up.