FAQ’S
Buyers
Can the value of my home decrease?
The depreciation of houses is not common. Most of the times, houses’ prices do not decrease with time. That is the reason why some people choose to use this as an investment option. You have to think thoroughly about key aspects such as location, school districts, and community. All these factors have a big influence on the price of your home, whether it is in the present or the future. If you are considering a developing area, you should make some previous research on the house’s surroundings and the actual location to see if that could have any effect on your house’s value.
Are old homes just as valuable than newer ones?
There is no right answer because it depends on each person’s preferences.
Older homes can in some cases be cheaper than newer homes comparing locations and sizes. Nevertheless, there are sometimes when older homes can be more expensive, due to things such as appliances, flooring and more.
Newer homes, on the other hand, can have lower expenses for repairs, taxes, and others; because by being newer, it also means that will last without reparations for longer.
When it comes to landscape, most of the time newer houses do not have this feature, while older houses have a big, well-designed, clean landscape worth thousands of dollars.
What does closing costs mean?
When a house is sold, both buyers and sellers must pay expenses in order to transfer the ownership from a party to the other. These expenses are referred to as closing costs.
What is FSBO?
Some homeowners decide to sell their homes on their own, without the help of a real state agent. This is known as FSBO, “for sale by owner”. Finding a real state agent help is always the best choice to sell.
What does “one-time show” mean?
This is a type of listing often used on FSBO home sales. The homeowner signs an agreement with an agent to help them sell the house. This agreement states that the homeowner will give a commission to the agent and that the homeowner cannot delay the sale in order to avoid paying the commission.
What is the concept of a broker?
A broker is a real state agent authorized to run a real state agency. This person can open, run, and hire people for the office. All real state agencies have at least one broker.
What is the concept of contingency?
It is a safety provision that states that, in order to validate a contract, certain conditions or events must be completed. This provision is included in the sale contract.
Debt to income ratio, what does it mean?
Each month, a person must use a percentage of their income to pay their house’s debt. This is known as debt to income.
What does multiple listing service (MLS) mean?
It is a computerized list of all houses for sale with one realtor in a specific area. The agents with granted access to the multiple listing service can use this list to find houses with specific parameters such as location or price range.
Mortgage
Do lenders have a limit on the number of escrow funds they can get from borrowers?
There are standards to calculate the number of funds that borrowers are required to deposit in an escrow account by mortgage lenders. These standards are set by the Real Estate Settlement Procedures Act, also known as RESPA, and they limit the initial escrow account deposit to a sum that covers payments for taxes, premiums of the insurance and any other possible charge on the property. An escrow cushion is also added to this sum, it is an extra amount of money used to cover increases in payments fees. Each month, borrowers must pay a maximum of one-twelfth of the total annual taxes amount, insurance premiums, other charges, and the escrow cushion. Mortgage lenders cannot require borrowers to pay an amount higher than that.
Is it possible for me to pay taxes and insurance on my own?
The standard procedure for mortgages, including the FHA, VA, and conventional mortgages, is to specify the escrow conditions on the mortgage documents when the loan is originated. In some cases, with conventional loans where the member has at least 20% equity position in the property, The Lender can waive collecting the escrow requirement.
Is it possible to avoid private insurance for my mortgage? How can I do it?
There are different ways to avoid private mortgage insurance. The easiest one is to make a 20% down payment. But you can also make only a 5% or 10% down payment and get a second mortgage for the rest of the down payment you do not have (15% or 10%). This means you will have to combine a first mortgage lien for 80% of the total property cost, and a second mortgage lien for the 15% or 10% of the property’s total cost. The remaining 5% or 10% will be held as a down payment. Since the first mortgage lien is for 80% of the property’s value, you will not be required a PMI, even though there is a second mortgage financing. Even though the terms on the second mortgage are not as good as the ones on the first mortgage, it is deductible on your federal tax return, not as PMI, which is insurance and therefore, offer no deductions on your tax return filing.
How do you calculate the interest on a mortgage loan?
Normally, the mortgages interest is calculated based arrears, instead of consumer loans, which calculate interests based on payment receipt’s date. This means that when borrowers make a payment on a month, they are paying for the previous month to the one they are making payments. This system calculates interest averaging the year (360 days), and the month (30 days).
How long can a loan process take?
The time from the application to the closing date can vary a lot. In some cases take just a few days, while in others it can take 45 or more days. There are many factors that influence this amount of time, like the loan type, if an appraisal is needed, the title clearance and others. The process can also delay if the documentation of the borrower is not given to the lender promptly.
How long does closing the loan take?
The time to sign the loan documents, also known as closing time, will normally take as much time as the borrower wants. Reading, explaining and signing the documents can take as little as 45 minutes. Nevertheless, the borrower may take longer than that if they have additional questions, explain things further, or any other variable.
Do I need to have a minimum credit score?
Depending on the type of mortgage you have, the minimum score can vary. The most attractive type of mortgage you can get is FNMA & FHLMC. It is also known as agency paper, and it is the most common type of mortgage financing. For this kind of mortgage, you will need to have a score of 620 or higher.
If my builder directs to a mortgage company, do I have to use that one?
You do not have to use the company your builder suggests. Since it is your mortgage process, it is important that you choose a company you feel comfortable with. Even this is true, some builders try to force borrowers to get their mortgage from their own in-house mortgage company, and this normally means higher interest rates.