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Buying newly constructed real estate isn’t much different from buying an “already used” home. What variances there are, however, can make all the difference between buying a diamond or a lemon.
Here are a few tips to keep in mind when buying new construction:
Tip #1: Don’t Use The Builder’s Sales Agent – Hire Your Own
If they’re the builder’s agent, they’re being paid to represent the builder, no matter what they tell you. Your own real estate agent, who is representing you, is required to tell you the negatives as well as the positives. The builder’s agent doesn’t have to tell you the drawbacks of the transaction.
Tip #2: Find Your Own Lending Agency
Again, if you go through the builder, the lending agency may offer you a deal that isn’t in your best interest. In addition, the builder may actually own the lending company, and will have full information on your personal progress.
Your real estate agent can refer you to a reputable lender, if you don’t already have one of your own.
Tip #3: Talk To A Real Estate Agent Or Lawyer
Although standard agreements are made to keep everyone out of court, they aren’t necessarily in your best interests. Ask about cancellation rights and make sure you understand both your liability and your commitments. Also, check your contract to make sure it doesn’t contain warnings about health issues.
Tip #4: Decide What Options Or Upgrades You Want
Remember that the profit margin for many builders is highest in upgrades. Find out if your lender allows the options and upgrades you’ve chosen to be added to the loan. If your lender doesn’t allow this, the cost of the upgrades will come out of your pocket in cash.
Tip #5: Research The Builder
It’s amazing how many people think a builder is good, simply because they can build a house. Unless you’re a licensed home inspector, the chance of you catching a cut corner or shoddy building practices is slim to none.
Check out the neighbors’ homes and talk to them. Are the homes a consistent size or are they shrinking in size? Do the neighbors have consistent complaints about the quality of their homes? Also, check public records for lawsuits.
Owning newly constructed real estate and knowing that you’re the first person to live in the home can be a wonderful, exciting experience. Make sure that you protect yourself so you can enjoy it!
Thinking of buying newly constructed real estate? Talk with me before you start shopping. If you visit a builder prior to working with me, I won’t be able to legally represent you with that builder.
To find out more about how I can help you save money and get the best terms when buying newly constructed real estate, call or email your trusted mortgage professional for more information.
Are you thinking about using a mortgage to buy a new home? Buying your own piece of local real estate is a major financial investment and one that can require some pretty complex math to fully understand.
In this blog post we’ll discuss mortgage calculators and how to use one of these tools to determine your monthly mortgage payments, interest charges, amortization periods and more.
Determining Your Principal and Down Payment Amounts
To get started with a mortgage calculator you’ll need to know how the price of the home and how much you intend to contribute as a down payment. Generally speaking you’ll want to place a down payment of at least 20 percent in order to avoid having to pay for private mortgage insurance and to give you access to better interest rates.
Choosing Your Interest Rate and Amortization Period
Now that you have an idea of the amount of mortgage financing you’ll need, the next step is to choose your interest rate and amortization period. Different lenders will offer different interest rates for every one of their mortgage products, so again you’ll want to play around with these numbers and run the calculation to see which combination of mortgage financing, interest rate and amortization period gives you a monthly payment that suits your budget.
Using a Mortgage Calculator for Refinancing
If you’re thinking about refinancing your current mortgage you can also use a mortgage calculator to help make the math a bit easier. Simply use your outstanding mortgage balance as the principal amount and then choose an amortization schedule that fits your financial goals. Be sure to keep an eye on your interest payments, as you may find that by refinancing to a longer amortization period your monthly payments go down but your total interest paid is quite a bit higher.
Don’t Forget the Closing Costs
Finally, don’t forget that there are numerous “closing costs” – fees, taxes and more – which you’ll need to factor in to your overall calculation. Closing costs will include everything from home appraisal fees to government filing fees and property taxes, and will vary depending on the home and the city or community you’re buying in.
While online mortgage calculators can handle the tricky math to determine monthly payments and interest costs you may still find that you have questions about your mortgage or some aspect of the process. For more information, contact your local mortgage professional and they’ll be happy to share their advice and expertise.
Refinancing your mortgage is a great way to reduce your monthly payments or take out some of the equity in your home to reinvest in renovations, upgrades or in other areas in your financial portfolio.
Let’s take a quick look at a few questions that you can ask yourself in order to determine whether you should refinance now or wait until sometime in the future.
Can You Lock In A Lower Interest Rate?
Depending on when you first purchased your home and took out your mortgage, you may find that by refinancing now you can lock in a lower interest rate.
Getting a lower rate can end up saving you thousands of dollars a year in interest, but you’ll need to weigh the closing costs of the refinancing against the savings you’ll obtain to ensure that refinancing is worthwhile.
How Much Do You Owe On The Home?
If you still owe a significant amount on your home you may find that it’s worth refinancing, especially if you’re confident that you won’t be selling the home any time soon. Conversely, if you’re very close to having your mortgage paid off you may find that refinancing has little benefit.
Do You Need To Tap Into Your Home Equity?
If you feel that now is the time to tap into the equity you’ve built up in your home over time in order to cover renovation or upgrade costs you may want to consider refinancing. This will allow you to take out a large chunk of cash without having to open a new loan or line of credit. If possible, try to secure a lower interest rate for added benefit.
Do You Plan On Moving?
If you’re planning on moving in the next couple of years then you may want to hold off on refinancing your mortgage. As mentioned above, there are closing costs attached with a refinancing deal and these must be factored in when assessing whether or not you stand to gain or lose.
If you’re staying in your home for the near future there’s a far better chance that the costs of a refinancing will be covered by the amount that you save.
Every financial situation is unique, and you may find that you have other questions about refinancing that aren’t listed above. Don’t hesitate to contact your mortgage professional as they’ve worked with all sorts of refinancing clients and can share helpful advice that is relevant to your situation.
Speeding Up the Close: Five Tips on How to Close Your Mortgage Loan Faster So You Can Start Moving In
When a seller accepts an offer from a buyer, the process of obtaining the property has just begun. The buyer now has to conduct an inspection, get approval from an attorney and obtain a mortgage – all of which can be time consuming. Here are a few ways that you can speed up the mortgage process and close the deal sooner.
Make Sure That You Have Money For Closing Costs
Do you have the money needed for a down payment and to pay other closing and prepaid costs? If not, you won’t be able to close until you find the funds to pay those costs – and this could delay the closing on your home indefinitely. Before you arrange the mortgage, make sure you have enough cash on hand to pay closing costs.
Get Conditional Approval Before Making The Offer
If you have not been conditionally approved for a loan before making an offer, you can’t be sure that a lender will give you a loan for the amount of the purchase price. In addition, starting the process from scratch could push back the closing timeline. Having your mortgage conditionally approved means the mortgage process is already underway when you make your offer, which saves you time.
Have Your Documents Together
Get your bank statements, pay stubs and other documents together before the seller accepts your offer. Having everything that the lender needs right away decreases the time needed for a lender to assess your application before extending the loan.
Work With An Experienced Mortgage Lender
Your mortgage lender may be able to move everything along by staying on top of the loan approval process. By ensuring that documents are being processed in a timely manner, an experienced lender can reduce the closing time from months to weeks.
Create A Timeline For Repairs The Seller Is Obligated To Make
It is not uncommon for a seller to be obligated to fix certain issues with the house before the new owner takes possession. However, it is important to put these repairs the contract along with a mandatory completion date. Otherwise, the seller could drag his feet with no contractual obligation to finish any repairs before he sees fit to do so.
Closing on a home loan can take anywhere from 30 to 120 days depending on work that needs to be done on the home and how well prepared a buyer is. Contacting and working closely with your mortgage lender or broker can result in a speedy and painless close. Contact an experienced mortgage professional today for more information about closing a mortgage.
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