Ideally, each party will pay their own closing costs associated with the purchase and the sale of a home, but they can be negotiable based on lender requirements and market conditions. The fees are usually paid at the settlement and will be itemized on the closing statement. Buyers should be aware of them before contracting for a home. If a mortgage is involved, the lender will want to verify that the borrower has ample funds available at closing to pay for them. Buyer's closing costs can range between two to five percent of the sales price. The real estate agents should be able to give you an estimate of what a buyer can expect. The most accurate estimate will come from the lender at the time the loan application is made. They may or may not include other fees that will be charged to buyers by the title or escrow company. Buyers are required to be provided a standard Closing Disclosure form at least three business days before the loan closing date. This document will include … Continue reading...

Mortgage assumptions have not been a practical matter for the last 30 years because mortgage rates have been on a steady decline. Even if the seller had a rate lower than the current rate, the new purchaser must qualify to assume the loan. In the case of conventional loans, the lender has the right to increase the rate to the current rate which neutralizes the reason for assuming the loan. This change took place in the early 1980's when lenders added due on sale provisions so lower rates could not be assumed. FHA and VA loans can be assumed at the existing rate with the provision that the purchaser qualifies for the loan. This could be an advantage if the rate on the loan to be assumed was lower than the current mortgage rate for FHA or VA and the buyer is going to owner-occupy. Unfortunately, investors are prohibited from assuming FHA and VA loans. Besides the obvious advantage of a lower rate which would have a lower payment, the closing costs are lower on an assumption than … Continue reading...

Vacation home sales are up 44% year-over-year according to the National Association of REALTORS® based on sales during the July to September period. Not only are the number of units up, but they are also selling faster than in previous years. On a national basis, 72% of existing vacation homes closed in October were on the market for less than one month. The increased desirability and affordability of vacation homes, according to the National Association of Realtors, seems to be influenced by the pandemic and low mortgage rates. The ability to work from home seems to be contributing to this increase. Freddie Mac reports the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 2.83% in October compared to the aver commitment rate for all of 2019 which was 3.94%. There may also be a safety factor involved with these decisions to purchase vacation or second homes. Contagious diseases flourish more in highly populated areas like big cities and … Continue reading...

A home inspector is another key professional involved in a real estate transaction. Many times, the sales contract will have a provision that allows the purchaser to have inspections made to discover issues that are not readily apparent or have not been disclosed by the seller. It is important to have a qualified individual perform the inspection. Regardless of whether a license is required, buyers should ask about the inspector's experience, training, years in business and if they are familiar with the area and type of property involved. Membership in professional associations can indicate an inspector's commitment to education and training. References from both customers and agents are helpful and may be more meaningful. You are encouraged to call the references, especially, if you are concerned about any specific areas. Errors and Omission insurance is intended to cover mistakes made during an inspection. It would be good to find out if the inspector has this type of … Continue reading...

If you are making a particular meal for the first time, it is essential to have a recipe so that it turns out the way it should. Knowing the ingredients and preparation can guide you through the process. Buying a home is really no different than making a new recipe. There are certain things that need to be done, many of which should occur in a particular order to save time, money, effort and disappointment. Your first inclination may be to start searching the Internet for homes and schedule some showings or possibly visit open houses. Even though this is very gratifying, it shouldn't be done until you have gone through the preliminaries. Buying a home for the first-time implies you haven't been through the process before and even though, you may have a rough idea of what needs to be done, selecting the right agent in the beginning will give you the benefit of years of personal and professional experience that can help you avoid some of the common mistakes made when buying a … Continue reading...

We are all spending more time at home and will probably need to continue to do so for a while longer. Depending on the makeup of your family, your home is now a home office, a gym, a virtual classroom and considerably more meals have been prepared in your kitchens in the past six months than normal. Some businesses have undergone a metamorphosis that has shown them that maybe they do not need the big commercial spaces for their employees. They realize that they can be just as productive with their work force offsite which will cut expenses. If this scenario sounds familiar, it may be worth exploring what moving would look like for your situation. To analyze the options, you will need to know what your home is worth and what the net proceeds will be after selling it. You will need to know what homes are available with the amenities you are looking for together with the prices and mortgage money. Depending on the interest rate on your current mortgage, there may not be much … Continue reading...

Selling a home and buying a lower priced home that meets your current needs can be to your advantage in an "Up" market like the current one with low inventory. The advantage is that you can maximize the price for the home you're selling and not have to reinvest it all in your replacement. Just to illustrate the point, let's say there is a 10% premium in the sales price of a home currently. If you're selling a home for $750,000, it would be $75,000. If you replaced the home with a $500,000 home, the premium would be $50,000 which means you're $25,000 ahead. Let's further assume that your home is debt free so that when you sell it, you have a large cash equity. Instead of paying cash for the replacement home, get an 80% loan at today's low interest rates and reinvest the proceeds to supplement your retirement. You may be able to get as low as a 2.5% mortgage and earn significantly more on the proceeds in other investments. Home prices are up significantly over last year and … Continue reading...

Cutting the price will generally bring buyers of anything out of the woodwork that were not serious before. Some renters could easily lower their monthly cost of housing by half or more by purchasing a home with all the financial benefits that come with it. The most obvious thing in today's market is that the mortgage payment could be less than the rent the tenants are paying. With mortgage rates hovering around 3%, this is a major factor of the savings. The two other major contributing factors are appreciation and amortization of the mortgage, neither of which benefit tenants continuing to pay rent. According to the FHFA House Price Index, home prices rose 5.4% from July 2019 to July 2020. There were 400,000 less homes on the market during the summer of 2020 than the previous summer which is influencing appreciation. With each payment a homeowner makes on their mortgage, a portion is used to reduce the principal amount owed. This is like a savings account for the owner … Continue reading...