New Jersey Real Estate AgentNew Jersey Real Estate Tips April 20, 2016

The Essential Home Buyer’s Checklist

The prospect of buying a new home is exciting, but it can also be overwhelming if you don’t know where to begin. In order to embrace the experience – and enjoy it for the overwhelmingly positive moment it should be – there are a few essential tips to help prioritize what you need to know even before you begin the search for a new home.

 

Know your target neighborhoods:

 

Before you begin to search for the home of your dreams, do your homework on the neighborhoods in the general area where you wish to live. Perhaps school quality is important to you, or maybe local ordinances will play into part of your decision. For example, you may wish to know the local restrictions for building a shed or a gazebo or if there are laws regarding certain types of pets. Being educated on the local codes and rules is important if you do not wish to be surprised down the road.

 

Applying for loans:

 

Being pre-approved, when possible, helps a home buyer make better budget choices in the ultimate selection of a home. Even when that isn’t possible, researching at least three different loan choices for the best rate is a savvy shopper’s secret to possible big savings in the end. Of course, know your credit score and the amount of your current debt when ready to apply.

 

Getting the best real estate agent:

 

Finding an agent that works for you to find the best home and helps negotiate the best deal is of great importance. While some may try to go it alone, having a professional in your corner means that when you have questions, you will be able to get the answers and resources you need to accurately address any concerns. They can, for example, assist in negotiating with the seller to have them buy a home warranty, which covers the buyer for any unseen major repairs for a year.

Once a house feels like it could be a prospective home, an agent can help you walk through the process of inspections, appraisals, and many other little things along the way.

 

New Jersey Real Estate TipsReal Estate Tips March 5, 2014

What is a Reverse Mortgage?

A reverse mortgage is a type of loan that is available to homeowners 62 years old and older. The loan allows the homeowners to convert part of the equity they have in their home into cash. This type of loan program is designed to give Americans more financial security, especially during a time when a steady income may not be as easy to attain. Many people use the loan to supplement Social Security payments, as well as to pay medical expenses, make improvements to the home and pay for additional living expenses.

Pros and Cons to a Reverse Mortgage

When you think about the concept of the program, it makes complete sense. After years or decades of paying down your mortgage and building up equity, the cash can be paid back to you. And, unlike traditional home equity loans, borrowers do not have to repay the loan. There are no monthly principal or interest payments. You are required to pay real estate taxes, utilities and hazard and flood insurance premiums.

There are still some things to think about, of course, as a reverse mortgage is not for everyone. First are the costs that are involved. Reverse mortgage fees are very high and include the interest rate, loan origination fee, mortgage insurance fee, appraisal fee, title insurance fees and any other additional closing costs. These fees are not paid out of pocket, but instead rolled into the loan.

Additionally, if you need to move out of your home permanently, you would be required to pay the loan back. This may not sound like a main consideration now, but it will be if you need a long-term care facility.

Amount of Payments and How to Receive Them

Is a reverse mortgage right for you? It could be. But it’s important to weigh all of your options, as there are both pros and cons to think about. The amount of money you can get from your home is based on:

  • Age of the youngest borrower

  • Current interest rate

  • Lesser of appraised value

  • Initial Mortgage Insurance Premium

Payment plans can be made in various forms, including:

  • Tenure

  • Term

  • Line of Credit

  • Modified Tenure

  • Modified Term

  • Single Disbursement Lump Sum
New Jersey Real EstateReal Estate Tips December 12, 2013

The Basics of an FHA Loan

If you’re interested in buying a home, you will have several options available to you in terms of a loan. FHA loans have gained in popularity over the years because of their low down payments and more forgiving requirements. FHA loans are funded by the Federal Housing Administration, and they are a great option for first-time homebuyers who may not have a lot of money to put down.

Who Qualifies for an FHA Loan?

To qualify for an FHA loan, you will need to have a reasonable debt-to-income ratio, with some programs accepting up to 55 percent debt. You don’t need to have an outstanding credit score either, just a decent one. Where some conventional loan programs require credit scores of over 750, FHA loans will consider people with scores of 650.

There are also some benefits for first-time homebuyers. FHA loans allow for co-signers, which is great for new graduates. You can also use gift money to put toward the down payment, and sellers can contribute to the closing costs, paying up to 6 percent of the purchase price.

What are the Benefits of an FHA Loan?

FHA loans are not for everyone, but they certainly have their benefits. Consider the following:

  • Low down payment of 3.5 percent

  • Low closing costs

  • Easy credit qualifying

  • Gifts and co-signers allowed

  • No prepayment penalty

  • More leniency during hard times

  • Funding for home improvements/renovations

Is There Anything Else I Should Know?

FHA loans include mortgage insurance, which is added into your monthly payment. This ongoing insurance can cost more than private mortgage insurance with conventional loans. There have been changes made regarding this insurance, which can fluctuate at any time. If you do have good credit and strong income, you can get other offers that are competitive and may not require you to put down a large down payment.

The loan you choose is an important decision, so take your time. You may find that an FHA loan is perfect for your situation, especially if you’re credit score is subpar or you have little money to put down.