Category: Home Tips

Which Mortgage Is Right for You?

Mortgages come in many shapes and sizes, meaning that there is one that right for you.

A mortgage is something that is going to be with you for a significant portion of your life–30 years, on average. With the many mortgages that exist in the world, it’s important that you choose the one that will work best for you, instead of having one that will put you into a financial catastrophe! Here are the three kinds of home loans that you should be aware of before you go mortgage shopping.

Types of Loans

  1. Conventional Loans

Conventional mortgages are ideal for the hopeful homeowner with good or excellent credit. They’re relatively standard and follow conservative guidelines for credit scores, minimum down payments, and your debt-to-income ratio (the percentage of monthly income that is spent paying all debts).

  1. VA Loans

VA Loans are for active-duty military and veterans that qualify for Veterans Affairs mortgages. Spouses of a military member who sacrificed their life for our freedom on active duty or as a result of a service-connected disability may also qualify. No down payment is required with this kind of mortgage. The VA does not lend money but guarantees loans made by private lenders.

  1. FHA Loans

Federal Housing Administration mortgages were created for people whose house payment will be a big chunk of their “take home” pay, hopeful homeowners with low credit scores, and homebuyers with little down payments to offer. FHA loans allow the borrowers to spend up to 56 to 57 percent of their monthly income on monthly debt obligations.

It’s important to know about mortgage types, as it will be with you, potentially, for the next thirty years! Contact  Dean Rathbun when it comes time to determining the perfect plan of action to buy your home. We are happy to help you.

3 (More) Questions to ask Your Mortgage Lender

A little research to compare your options for a mortgage, and a few questions in your artillery, will help you get the best one when you work with your mortgage lender.

Previously, we wrote about three questions to ask your mortgage lender before you secure your mortgage–we now have three more questions you should ask to give you even more knowledge and help to secure the best mortgage that you can get. When you are ready to get the best potential mortgage, here are three (more) questions you should ask your mortgage lender.

  1. What are the closing costs that go with this loan? Closing costs usually fall between 2 and 5 percent of the total loan. This range, when factored in with hundreds of thousands or millions of dollars, is big enough to make this question an important one.
  2. Is it an adjustable-rate or fixed-rate mortgage? An adjustable-rate mortgage locks your mortgage for a specific amount of time, and at the end may increase your monthly mortgage rate. A fixed mortgage keeps your interest rates and mortgage payment locked for the duration of the loan but is a bit more expensive than the adjustable-rate mortgage.
  3. What is the down payment that’s required? There exist many kinds of loan types, and not all of them require the same down payment. Make sure to ask what your down payment will be–if it’s less than 20 percent, ask if attaching private mortgage insurance (PMI) will be an additional requirement.

It’s best to put your pride aside and ask as many questions as you possibly can when it comes to something as vital to your life as your mortgage. This thing is going to be with you, potentially, for the next thirty years! Contact  Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.

Should You Lock Your Mortgage Rate?

If you’re not a betting man, you may think that when you lock your mortgage rate it may be too much of a gamble, but a little can go a long way.

Shopping for a mortgage is a lot like playing the tables at Vegas: it’s going to take both luck and some skill. One mortgage game that you can try your luck in is called “mortgage rate lock.” But before you buy in at the table (or close on a home sale), learn the various situations in which you should lock in a mortgage rate to give you the best chances of winning.

  1. What is a mortgage rate lock? This is when you strike a deal with your lender that allows your mortgage rate to freeze for a certain amount of agreed upon days. If you don’t lock, your mortgage rate could change by the time the loan paperwork is finished being processed.
  2. Should you lock in your mortgage? This is where your gambling skills come into play. If you believe that your interest rates will rise, lock! If you think they’ll fall, don’t lock. But when interest rates are at historic lows (like they are now), it seems like a no-brainer to lock.
  3. Nothing is guaranteed. Read your lender; if you think they’re pushing you into locking, don’t be afraid to call their bluff. The lender has an incentive to get you to lock your mortgage. See, locking your mortgage isn’t “free.” The longer the duration of the lock, the greater the cost regarding basis points that are then shown in the mortgage rate. It may not cost anything upfront, but you will be charged a higher interest rate.

Contact  Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.

Negotiate Like a Pro: Winning a Stalemate

When you play the Game of Real Estate, you win, or you lose; you’re going to need some negotiation skills if you’re going to be the victor.

When it comes to negotiation, there are only two kinds of people: those that bend over and take the deal as is without any push back, and the ones that will fight tooth and nail for the best possible deal and only compromise when it benefits them. You might be the kind of person who never questions the price of an item and just sees it as normal without ever considering you could purchase it for a lot less. If this sounds like you, here are negotiation skills for doing more than just playing the game of real estate: they’re for winning the game of real estate.

Don’t be an emotional seller: This is business, it’s as simple as that. This means that you’re going to have to throw you emotions out of the window and only think rationally. Having your real estate agent find out the buyer’s desired purchase price will give you the greatest advantage during negotiations.

Be realistic: Being realistic is at the core of thinking rationally. Being stubborn clouds your judgement and may lead to you passing up what is in actuality a fantastic offer for what you are selling.

Embrace creativity: If you and your buyer have reached a stalemate, it might be time to ponder some out-of-the-box ideas. Throwing in some furniture or something else the buyer had their eye on may sway them to budge and accept your standing offer. Yes, you might lose a beautiful patio table, but it may be worth it to sell you house.

Contact  Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.

3 Ways to Compete With Cash Buyers

Don’t have stacks of cash lying around like The Wolf of Wall Street to spend on a new home? Don’t worry; you can still compete with these kinds of buyers.

“Money talks” is a phrase that rings true in almost every corner of the world, from sports to real estate. All-cash means that there will be no mortgage, and that means that you won’t have to rely on lenders for anything. The housing market is firing up again, and bidding wars are the new normal. Unfortunately, sellers tend to favor an all-cash offer than those that depend on a mortgage approval. But not everyone has hundreds of thousands of dollars in between their sofa cushions, so what is one to do? Worry not, for here are three ways in which you can compete with cash buyers in a seller’s market.

  1. Bid higher – The highest offer doesn’t always guarantee a sale, but it can’t hurt to hike your offer up a bit. In order to beat the competition and temptation of cash, you’re going to have to make your offer more attractive. Sometimes the extra $1,000 on top of the listing price can be the determining factor in the seller’s eyes.
  2. Know what the seller needs – What are the terms the seller is seeking? Does the seller need extra time in the property to find a new home? Looking for a quick close? Having a real estate agent who can handle this early on will only increase your chances.
  3. “As is” can be the magical words – What can be more attractive to a seller than a buyer taking the home “as is”? They won’t have to spend any money on repairs or even lower their price.

Not having cash doesn’t put you out the game, you just have to find a new way to play it. Contact  Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.

Three Inspection Issues That Should Break the Deal

Your home is ready to sell, the only thing that could crush your dreams is a bad home inspection report.

There are very few guarantees in life: death, taxes, and home inspection reports turning up with “issues.” Home inspection notes can be as minor as a blown-out light bulb, other times they can be so horrid that it can actually ruin entire home selling plan. But, if you’re a buyer, it may not be the worst thing to proceed with a house that has “issues.” There are some, however, that you must look out for and tread with caution should you proceed. Here are three issues that should wave big red flags when looking to purchase a home.

  1. Asbestos. Pre-1975 homes could be infested with asbestos—a carcinogen that was used for construction and as fake snow in films like “The Wizard Oz”. If the report of the house you’re looking to purchase shows asbestos, take the appropriate actions to remove it from your premises.
  2. Termites. If the inspection shows termites, it’d be a good idea to leave this one alone. Termites are great at digesting wood, and the damage could extend well beyond what the report says. This is also going to call the help of a structural engineer A.K.A. more money out of your pocket.
  3. Black Mold. Black mold sounds something from a horror movie: black mold marks the territory of the creature from the Voodoo Swamp across the block. Fortunately, there are no such creatures in existence; unfortunately, black mold can cause severe respiratory problems. If you really want this house, have the seller hire a professional to get rid of the mold, and have the place tested before you purchase.

Contact United American Mortgage Group when it comes time to finding the perfect plan of action to sell your home. We are happy to help you.