The Art of Real Estate » buying a home

Mortgage basics: Understanding rates, fees, and points

Natalia — Thu, 15 Sep 2011 19:22:22 +0000

Purchasing a home might be a daunting task for every home buyer. Buying a home is the biggest investment for most people and knowing how to properly go about it is essential. Aside from determining the kind of mortgage you are getting, you need to understand the costs that comes with it. You will pay these costs upon closing the deal:

Purchase points

Purchases points are also called discount points or buy down points and this is the fee that you are willing to give up front so you can lower your interest rates. Each point represents 1% of your loan amount. Example, you have a $100,000 loan, one point will then be equal to $1,000. Purchase more points, the lower your interest rate.

Interest rate

When you get into a mortgage, you will have to deal with interest rates. This is the interest rate that will be charged to you by the lender for loaning you their money. This is a big factor on what your monthly payments will be. The higher your mortgage’s interest rate is, the higher your payment will be every month.

Fees

There are several fees that you need to deal with when you get a mortgage. These fees will be the cost to cover for underwriting the loan and processing it. The fees will also cover for appraisals, land survey, or checking the title of the home among other things.

Real Estate Tips: Your options for your downpayment

Natalia — Thu, 20 Jan 2011 12:26:39 +0000

When you apply for a loan to purchase a property, the lender considers the amount of your down payment to determine how much funds will be handed over. The down payment is a sign of commitment and also a guarantee that lessens the risk for the lender. Rule of thumb is that the more down payment you can get from your own cash, the better.

Sources of funds

A lot of borrowers do not have a big amount of cash on hand for their down payment. You can use the money you have set aside in your savings account, borrow money from relatives or friends, use your 401K, use your assets, or have a co-borrower.

There are also communities which offer to subsidize a portion of the down payment for buyers who are a bit cash strapped.

LTV Ratio

The down payment is often declared as a percentage of the sales price. Let us say the mortgage is around $300,000 and has a loan to value ratio of eighty per cent, then the needed down payment will be 20% or $60,000.

Other options

If you have a good credit standing, some banks even offer a zero down scheme for first time home buyers. This is often an option if you have limited sources of funding to have sufficient down payment. The interest rates though will be higher since there will also be no equity in the house when you don’t put it a down payment.

You can also go for a lease with an option to buy. You will rent the property and at any point you may purchase the property on the price and terms agreed upon by you and the owner.

How You Can Buy Property At Insanely Low Prices! Part 3

Heather — Sat, 08 Aug 2009 14:43:30 +0000

Now that we have touched base on a lot of information regarding getting a house for insanely low prices it is now time to get to the nitty gritty when placing a bid. One of the most important things that you are going to learn when you are bidding on a house is that you have to be patient. Patience is honestly the key and it is something that you have to stick to. You could submit 10 different bids for the house; however … someone could undercut you.

You want to make sure that you do not give up on the house but you do not want to cut yourself out of a deal either. If the price just keeps going up and up, you can definitely find another home that you will love just as much as this one and get at a lower cost. Remember, it is okay to walk away from a house if you think that the price is going too high.

Homes, in this day and age are a steal and there is no reason, if you are looking for a home that you should not take advantage of that – seriously!

How You Can Buy Property At Insanely Low Prices! Part 2

Heather — Thu, 06 Aug 2009 14:39:34 +0000

In the last blog, we touched base on knowledge and how you can use it to your advantage, the next thing you want to do is inspect the property. When you are looking into a home – it is very important that you actually take a look at it and make sure that someone who knows homes and specializes in remodeling and construction comes and takes a look at any home that you may be looking into purchasing. That way – if they find anything that you will have to take care of, you can get the price knocked down even more.

Mold, asbestos, lead paint and any other hazards are all very hard to see and if the property is an old one, you could absolutely be breathing in all of these things and that is not something that you want to do. Having another pair of eyes that are expert watching out for these things will absolutely help you in the long run on the price.

Also, making sure that you do your research on the property itself is very important – after all, it could have some unpaid taxes attached to it that if you brought it, you would have to be responsible for.

How You Can Buy Property At Insanely Low Prices!

Heather — Wed, 05 Aug 2009 14:35:32 +0000

As we talked about in the last few blogs – right now, everyone is able to pretty much get the price that they want when they are in the market for a home. The real estate market is dying for people to come and buy a home, however – you want to make sure that you are smart about your decisions and make sure that you get the very best deal for you … and the price that you want.

In this day and age, people have caught wind of the fact that deals are going around and when you are buying a home, you are not going to be the only person that is buying a home. Hell, your dream house could be for sale but ten other people could be looking at it – so you want to make sure that you are smart about it.

One thing that you can arm yourself with is knowledge. You want to make sure that you get yourself in contact with some of the real estate agents that are connected to that particular area and see what other homes they are selling. We are going to talk more about this particular topic in the next blog – you’ve got to see this!

First Time Home Buyers Stimulus: What Is It? Part 2

Heather — Tue, 04 Aug 2009 00:00:18 +0000

Now that we have touched base on just some of the incentives that are being offered up to home buyers, we are now going to talk about exactly what the first time home buyers stimulus is. During these hard, hard economic times, it is pretty hard to imagine that whatever price you are looking for in a home, you are not going to get. The cool thing about this particular program is that it is sort of like the cash for clunkers program – without you having to trade in your current residence.

I mentioned in the last blog about tax refunds and that is exactly what this particular program is. You can a tax credit of about 10% but a maximum of about $8,000 – which is honestly a pretty good deal. If you were going to buy a home anyway, this particular program is a fantastic one because you are basically going to be getting $8,000 shaved right off of the price right off of the bat!

Another cool thing about this program is that the tax credit is not refundable, so you do not have to pay it back in the end … which makes this deal that much sweeter right?

First Time Home Buyers Stimulus: What Is It?

Heather — Mon, 03 Aug 2009 00:00:00 +0000

The economy is in bad shape – businesses are constantly closing and when people are losing their jobs, they can not afford things like their home. This is one of the main reasons why so many houses have slipped over into a foreclosed home and the hardest part about that is that people are not buying their home either.

People are looking for the best deal and while they can find it right now – they do not want to commit themselves. However, if you are ready to commit, there are some things that you can do to ensure you are getting the best deal.

One thing that I have noticed about the real estate market and just what the government is doing for the housing market is taking all sorts of different approaches in the form of loan refinancing, loan modification and finally, the first time home buyers stimulus. Also, tax rebates are a-plenty when you buy certain homes, which is always an added incentive. However – what is the first time home buyers stimulus?

That is exactly what we are going to talk about in the next blog – you will be amazed at this incredible program, I can assure you of that!