Category Archives: Buyers

Mortgage Programs and Loan Options

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There are different types of mortgage programs and loan options that is available. What we need to know is the type that is best suitable for you since financial decision is critical in buying your new home, downsizing or moving up. These different type of mortgages vary in length, terms, rates and other factors.

Mortgage

So, how do you determine the type of mortgage you are most suitable with?

30 Year Fixed Mortgage
30 Year Fixed Mortgage
The most popular type of mortgage. This is the type of loan that has a fixed interest rate for the entire duration of the loan. What’s good with this loan is that the payment if affordable compared to mortgages with short term. It can also be obtained with small down payment percentage.
The drawback in this type of loan is the length itself. 30 years is a very long time. Another drawback is that the interest rate is higher.

15 Year Fixed Mortgage
15 Year Fixed Mortgage
Similar to a 30 year fixed mortgage but with lower length of pay period. Not all buyers will be eligible for this type of mortgage. The advantage of this loan is pretty obvious, the fact that you get to pay the loan in a lesser period of time is already an advantage. The interest rate is also lower than the previous mortgage type. More time for you to save up for your retirement.
Unlike the 30 year fixed mortgage, the drawback on this one is that you have to cover the difference in time with a higher monthly payment.

Adjustable Rate Mortgages (ARMs)
ARM
ARM is a mortgage that will have an adjusting rate at a specified time and frequency. Depending on the trends in the market, ARM rate will have a traditionally lower fixed rate during a specific time. ARM is attractive to some buyers mainly due to the initial rate. Another advantage of an ARM is that once the rate begins to adjust and is lower than what they have when they purchased the home.
The drawback is pretty obvious. It is when the rate adjusted and is higher than what they have when they purchased their home. It really can be a pain in the pocket and can be really difficult to budget.

Balloon Payment Mortgages
Balloon
Some buyers also consider this type of mortgage. This mortgage begins with a normal monthly payments for a specified time and at then, the loan will balloon at the end of the loan period. The advantage of this mortgage is that the interest rate is generally low. Some even have a lower rate than the fixed rate type or even ARM. This type of mortgage is common to those who are planning to move out in a short period of time and will sell the property before the balloon payment is due.
This type of mortgage is pretty risky. Some buyers even have to reconsider to refinance once the balloon payment is due. Take note that during that time, the value of the property can decrease or increase. So it will definitely be a problem if the value is much lower than it was when the buyer purchased the home. This type of mortgage has a greater risk of being foreclosed.

Bottom Line
Knowledge is power when purchasing a home. One wrong decision can be considered a calamity on one’s pocket. It is best for you to think it over and ask help or advice from professionals.

Best Tips in Home-buying According to Experts

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Whenever we search online for tips or best practices in the home-buying process, we’ll received thousands or millions of search results. And instead of helping us in removing our doubts towards the process and tasks, confusion takes place.

Fortunately, Market Leader gathered the tips from Real Estate Professionals and put it all on one list. They even took time to provide everyone an Infographic to help home-buyers understand the essentials in home-buying.

6 Essentials in Home-buying

  1. Get a home inspection to evaluate the safety, overall condition of your new home.                                                                                                                             – This is a must in home-buying. As much as we want to move in as soon as possible, we don’t want our hard earned money to go to waste. It is very important to avoid a mistake by purchasing a property that’s in need of major repairs. Home inspection will keep you away from those costly repairs and danger.
  2. Before you start house hunting, get pre-approved for a mortgage loan.             – Potential credit problems can be corrected since most of the Buyers are not aware of their credit. And if there are adjustments that needs attention, it will take months before it is corrected. It will also help Buyers to eliminate disappointments. It’s better to be aware if you’re credit can afford the house that you fell in love with.
  3. Direct all communication with the Seller through your Real Estate Agent.         – Real Estate process can be tricky to Home-buyers. Why does all communication should always be through to your Real Estate Agent? It is because negotiating is a tricky business. There are also contracts that are very difficult to handle. And of course, Real Estate can’t lie.
  4. Get the Seller to put every component of the deal and any verbal agreement into writing.                                                                                                                    – Everything should be in black and white when it comes to any contracts and agreements.
  5. Include important contingencies, such as financing and property inspections, with your offer.                                                                                                              – Same as number one, it is important to avoid any mistake in purchasing a property. It means your offer on a home has been made and the seller has accepted it, but the finalized sale is contingent upon certain criteria that have to be met. This will ensure that before the sale is finalized, all listed on your contingencies will be met.
  6. Come up with a realistic wishlist – what you can afford in terms of house size, neighborhood, amenities.                                                                                            – Number two on this list will come into action for this tip. As much as we want to have that dream house, it all boils down to our credit being approved or not. As soon as you already have the pre-approval letter, you will have a better understanding on what is within your budget.

Things to do when moving into a new house

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Ever wonder what to do when you just moved in to your new house?

During my childhood, I never get to experience moving to different houses. We’ve been living in the same house for more than 30 years and I’m sure that once I got married, I need to move out soon. There’s a lot of things I am worrying about and I can’t keep up with the stress. It’s a good thing that I found these tips to lessen my burden and worries.

Stop what you are doing right now and focus on these 6 tips to skip potential trouble.

6 To do's in moving to a new home

As per Houselogic, there are DIY tips and some explanations as to why it is very much important to follow these.

If you have questions anything about real estate, we here at Magic Real Estate will be there for you.