Real Estate Lender Network

When the buyer and seller decided to buy or sell a home property in the market, at first they carry on with a price consideration for the house property. But there are many factors which will affect the value or price consideration of your house property. There are more factors that will affect the offer price of the house property.

Property Condition

When the buyer has experience in searching the house property in which is he is interested in, he should know the condition of the house property. Property condition is also considered as a factor which affects the value of the home property. When the buyer estimates the value and condition of the home property, the buyer has to consider many things. The buyer has to note important structural condition like paints, floor covering, walls, ceilings, floors, doors and windows. Show special attention on the plumbing, electricity work, repairs, bathrooms, and kitchen and so on. Fixtures, light switches, doorknobs and yards should be considered properly. Choose the right agent to represent you, since they provide insight key assistance.

Home Improvements

When comparing the exact model matches within the track, note whether the previous owner have made any substantial improvements. Consider the major improvements which should be taken in to account. Home improvements are also considered as the most important factor for which affects the offer price. The other improvements like room addition, bedrooms, bathrooms, kitchens and yards should carefully overviewed by paying full attention. Other items like floor tiles, swimming pools should be taken in to account.

Market Conditions

Sometimes the hot market is said to be the seller market. In the seller market, properties will be sold quickly as soon as it has been listed and multiple offers will made to the saleable home. The house will be sold even above the asking price. The slow market is the buyer market. In the buyer market the home property may get weaker on the market for sometime and the offer may be few and far between. Prices may even decline or go up in the market either temporarily. This market condition will make you more flexible in offering the low price for the market. When the offer price made by you is very low, the seller will likely to make some sort of counter offer to the buyer and completes the negotiation quickly. Market condition will plays a major role in affecting the offer price of your purchase or sale.

Sometimes the market will be stable or in evolution. When the market is said to be the steady market, then there is no need of applying the real rules while making the offer. You can make the offer on high or very low range. You can find a house with multiple offers made by others. Transition market is difficult to estimate, because they have more fluctuation in the market. It is difficult for every one or any one to predict the market, that at what time the prices of the market will be up and down.

Seller Motivation

Seller motivation is also the major factor which affects the offer price made by the buyer. Motivated seller is one who bought his or her home in the new area. Due to family emergency also the seller complete the house sale quickly. Seller motivation also influences the value of the home property.

Final Decision

The comparable sale information will help the buyer to determine the base price range for the particular home property. In addition to the other factors like property condition, improvements, market conditions and seller motivation will help to determine the price whether to be upper or lower. Sometimes the reasonable price is considered as the out price of the price range. The fair price will be the price agreed by the buyer at the end of the transaction with the seller. The prices offered by the buyer at the time of starting the deal, will depends on the interest of the buyer. Though the agent provides the more guidance and advice to the buyer, it is up to the decision of the buyer.

When a mortgage is taken over the terms and conditions of the loan can be transferred from one borrower to a new borrower. The term ‘take over mortgage’ is also used to refer to an assumable loan.

Home buyers can assume a seller’s mortgage when purchasing a home with a take over mortgage payment. The approval of the lender is usually required before you can assume a mortgage. With a mortgage assumption the interest rate and the monthly payment schedule is assumed by you. This means you can save a lot with an assumed mortgage, especially if the interest rate on the existing loan is lower than the current rate on new loans. However, lenders can change the loan terms of these mortgages so you should be prepared for that.

Along with the interest rate and the monthly payments, you also inherit the liability of the mortgage. If for instance, you cannot make the payments for the mortgage, the lender will foreclose. If the property sells for less that the balance of the loan, the lender reserves the right to sue you for the difference.

An assumed mortgage is not a free ride either. In order to get a take over mortgage, you still need to undergo a pre-qualifying process. Closing fees will still need to be paid before you can get one of these loans. Also, a take over mortgage requires payment for appraisal costs and title insurance.

For example, a friend of yours wants to sell his home to you for $155,000 and has an assumable loan of $145,000 with 6 percent interest. To take over this mortgage, you only need to put down $10,000 to assume your friend’s home and mortgage. Along with the $10,000 down payment, closing fees are applicable.

Another example is when one of your friends got a loan for $80,000 with 6.5 percent rate fifteen years ago. The loan balance is $70,000. The property is now worth $160,000. For a take over mortgage, you only need to come up with $90,000 plus money for closing costs.

Assumable mortgages have been around the market for years. Because they allowed the consumer a chance to assume a loan with lower interest rates, they became popular.

If you want to take over a mortgage, remember that if a deal sounds too good to be true, it probably is. Sellers offering cheap assumable loans are also offering something of significant value. Sellers are likely to charge more for their houses. This could mean that you would have to come up with more funds to cover the difference between the asking price and the loan balance.

However, the assumability feature can also give you a chance to cash out later, especially since the property you are assuming could increase in value with the growing rates over time.

A house is one of the biggest purchases and investments you will make in your lifetime. With that said, it’s very important that you choose a lender with a strong reputation and one that you feel comfortable with.

To help set your mind at ease a bit, realize that mortgage lenders have a special interest in your loan also. The last thing they want is to have to foreclose on your house. They want you to succeed so that you will be able to manage the monthly payments. A good lender will put together a quality loan that works best for you.

Look for well-established lenders who are familiar with your market and make sure to ask questions. The communication and interpersonal skills are of the lender very important. Go ahead and set up appointments with several lenders to get an idea of what it would be like working with them. When speaking with the lender, make sure that they can deliver the loan within your timetable. Also, a lender should be receptive and not avoid answering your questions.

A few tips and things to consider when looking for a good lender are:

• Get a few referrals - Ask your family members, friends and Real Estate agent who they recommend and might have dealt with in the past.

• When you meet the loan officer, do they appear professional, organized and knowledgeable?

• Find out which, if any, memberships the lender holds, i.e., Better Business Bureau, Chamber of Commerce, Mortgage Lender’s Association, etc.

• Is the lender offering you options to assist you with the down payment and / or closing costs?

• Ask the lender what their methods of communication will be with you during the loan process.

• Did the lender provide you with a Good Faith Estimate and Truth-In-Lending Disclosure? Legally, you should be provided with this paperwork within three days after submitting your application.

• What are the costs associated with the contract, i.e., closing costs, etc.?

• Has the lender provided you with copies of everything you’ve signed?

• Did the lender give you a complete list of everything you need to bring with you when you are ready to sign the loan application?

• Does the lender require that you sign a Borrower / Broker Contract? If they do, RUN. You do not want to do business with a broker that makes that demand.

You want to work with lender that you trust. If you still have questions when your interviews are finished, ask for references and talk to those individuals yourself. This is a big decision you’re making and you have the right to get all of the information you need and want.

Once you’re comfortable with a mortgage lender, talk with them about the best way for you to structure your mortgage. Once offers for various loan types have been provided, you should talk with other mortgage companies and compare their rates to what you received. And always make sure to get your estimates in writing!

Remember that the mortgage that is best suited for you depends on several things. Your current financial situation, how and if you expect your finances to change, how long you plan on keeping your house and how comfortable you are with the possibility of your mortgage payment changing are all factors that need to be considered before signing any contracts.

Remember also that information is empowering and the more research and exploration you do, the better off you will be in the years to come. Make sure you are completely satisfied with the lender you choose because you want someone that will be there if you have questions, even after you close on your loan.

The Single Largest Financial Obligation

Your mortgage is probably the single largest financial obligation that you will have in your life. The investment that you have in your home can have great long term value, but on a month by month basis it represents a significant expense. The math for most people is simple, the more you pay on your mortgage, the less you have to spend on other things.

To underline this point it might be of interest to note that in 1980 the average person spent 25% of their gross monthly income on housing expenses. By 2005 that percentage had risen to over 43%. This is not really a surprise. We are all aware that home prices have risen significantly during this period of time. Income levels have not kept up with home prices and as a result home buyers are finding more of their paycheck going towards their mortgage payment.

Florida mortgage holders have acutely felt the impact as home prices in recent years have rivaled those of California. Your mortgage may consume more or less than the average 43% of your gross monthly income, but it is probably safe to say that it deserves to be intelligently managed.

Mortgage Management

I’ve been a licensed Florida mortgage broker since 1989. My company Power Mortgage Corp. a Florida Mortgage Company is also licensed in Georgia, Massachusetts, and Virginia. Over the years I have originated, refinanced, and analyzed countless mortgages. I’m always happy when we can help a customer make an intelligent decision about their mortgage. Active, regular mortgage management can make a big difference in your life. The right choices will save you money. Sometimes lots of money.

To Refinance or Not to Refinance

Active mortgage management does not always mean taking action. Active mortgage management means an intelligent periodic review of available options. Call your friendly mortgage broker from time to time! We like to hear from you. We will always take the time to help you understand your options. And always make sure that you know all of the costs involved.

Request a Good Faith Estimate. Make sure that your mortgage broker includes all third party charges and statutory costs along with the lender fees. It is equally important to consider your personal goals; how long will be in the home? Do you plan to retire soon? What type of personal saving plans do you have? What is your aversion to risk? Is an adjustable rate mortgage suitable?

Fixed or Adjustable

Fixed rate mortgages are pretty easy to understand. Adjustable rate mortgages on the other hand can be surprisingly complex. And there are literally thousands of variations of adjustable rate mortgages. Over the last five years negative amortization adjustable rate mortgages have become popular. Florida mortgage borrowers have embraced these programs for the advertised low payment rates. But these loans are complex; I believe that very few people that get this type of mortgage understand them. I also believe that there are mortgage brokers actively selling these programs that do not understand them.

Please take your time. Ask lots of questions. Take notes. Ask more questions. Make sure you understand the index, the margin, the adjustment period for both the note and the payment. It wouldn’t hurt to look at the worst case scenario. Can you live with it? If your mortgage broker can’t answer your questions find a new mortgage broker. Your financial life may depend on it.

How About a 15 Year Fixed?

There was a time when the interest rate on a 15 year fixed rate mortgage was consistently and significantly lower than the rate on a 30 year fixed rate mortgage. Between June of 2004 and June of 2006 the Federal Reserve increased the Federal Funds rate 17 times. This rate directly impacts all short term interest rates such as the Prime Rate. During the same period of time the long term rates remained more or less steady. The net effect was to close the gap between rates on shorter term mortgages like the 15 year fixed and longer term mortgages like the 30 year fixed.

At the time of this writing the rates on these two loan products happen to be exactly the same. But this should not take the 15 year fixed rate mortgage out of contention. For many people it is an excellent option. And it can still save lots of money.

For example, the payment on a 30 year fixed rate mortgage for $100,000 at 6% is $599.55. The payment on a 15 year fixed rate mortgage for $100,000 at 6% is $843.85. That is an extra $244.30 per month on the 15 year mortgage. But consider that the total payments made on the 30 year loan would be $215,838, versus $151,893 on the 15 year mortgage. By choosing the 15 year mortgage you would save $63,945. And you get to stop making mortgage payment in 15 years!

Interest Only

Given the high cost of homes it is no surprise that interest only programs have become so popular. Florida mortgage customers have flocked to these programs to make increasingly expensive homes affordable. An interest only mortgage can be appropriate if your sole concern is cash flow. During the interest only period you will not be paying any principle off. There are many types of interest only mortgage programs. The majority of interest only mortgage programs are “fixed period adjustable rate mortgages”. This means that they are fixed for a limited period of time; typically 3, 5, 7, or 10 years.

The interest only period usually corresponds to the fixed rate period. Once the fixed rate period ends the mortgage becomes adjustable. A new version of the interest only mortgage worth considering is the 30 year fixed rate mortgage with a 10 year interest only period. You get the benefits of the low interest only payment for 10 years - but with no adjustable rate risk waiting for you at the end of the interest only period.

It’s Your Money

How often do you balance your checkbook, get a physical exam, go to the dentist? Your mortgage can have a huge impact on the quality of your life. Think of your mortgage from time to time. Call your friendly mortgage broker. Have a chat. Ask questions. It’s your money.

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.