Virginia Beach Real Estate BlogRecently posted or modified blog posts in the category - Buying a Homehttps://www.davidnygaardproperties.com/blog/Copyright DavidNygaardProperties.com2020-09-13T22:29:49-07:00tag:davidnygaardproperties.com,2012-09-20:56636 Things You Must Know Before you Buy<img src="https://assets.site-static.com/userfiles/1780/image/OT2VX60_copy.jpg" width="5616" height="3744" />
6 Things You Must Know Before you Buy a House
Mortgage Regulations Have Changed . . .
Mortgage regulations have changed significantly over the last few years, making your options wider than ever. Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can cost or save you literally thousands of dollars and years of expense.
Get the Right Information
Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved.
Industry research has revealed that there are 6 common mistakes that most homebuyers make in mortgage shopping that can have a significant impact on the outcome of this critical negotiation. If handled correctly, these issues could result in a mortgage that will cost you less over a shorter period of time.
Industry research has revealed that there are 6 common mistakes that most homebuyers make in mortgage shopping that can have a significant impact on the outcome of this critical negotiation. If handled correctly, these issues could result in a mortgage that will cost you less over a shorter period of time.
6 Things You Must Know Before Obtaining a Mortgage
Before you commit your hard-earned dollars to monthly mortgage payments, consider these 6 issues. Effective consideration of these important areas can make your payments work much harder for you.
1. You can, and should, get preapproved for a mortgage before you go looking for a home.
Preapproval is easy and can give you complete peace-of-mind when shopping for your home. Your local lending institution can provide you with written preapproval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application and a certificate that guarantees you a mortgage to the specified level when you find the home you’re looking for.
2. Know what monthly dollar amount you feel comfortable committing to.
When you discuss mortgage pre-approval with your lending institution, find out what level you qualify for, but also pre-assess for yourself what monthly dollar amount you feel comfortable committing to. Your situation may give you a pre-approval amount that is higher (or lower) than the amount of money you would want to pay out each month. By working back and forth with your lending institution to determine what this monthly amount is, and what value of home this translates into at today’s rates, you won’t waste time looking at homes that are not in your price range.
3. You should be thinking about your long term goals, and expected situation, to determine the type of mortgage that will best suit your needs.
There are a number of questions you should be asking yourself before you commit to a certain type of mortgage. How long do you think you will own this home? What direction are interest rates going in, and how quickly? Is your income expected to change (up or down) in the near term, impacting how much money you can afford to pay to your mortgage? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.
4. Make sure you understand what prepayment privileges and payment frequency options are available to you.
More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage. Simply by structuring your payments so that they come out more frequently, will significantly lessen the amount of interest that you will be charged over the term. For the same reason, authorized prepayment of a certain percentage of your mortgage, or an increase in the amount you pay monthly, will have a major impact on the number of years you will have to pay and could shorten your payment term considerably These two payment options can cut years off your mortgage, and save you thousands of dollars in interest. However, not every mortgage has these prepayment privileges built-in, so make sure you ask the proper questions.
5. Ask if your mortgage is both portable and/or assumable.
A portable mortgage, where available, is one that you can carry with you when you buy your next home and avoid paying any discharge penalties. This means that you will not have to go through the entire mortgage process again unless you are making a move up to a much more expensive home. An assumable mortgage is one that the buyer for your home can take over when you move to your next home. This can be a very powerful tool at the negotiating table making it much easier and more desirable for a buyer to buy your home and again saves you any discharge penalties.
6. You should seriously consider dealing with a Mortgage Expert.
Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make a significant difference in the cost and effectiveness of the mortgage you obtain. For example, they can make the process faster thereby avoiding costly delays. Typically there is no cost or obligation to enquire.
2020-09-15T02:14:00-07:002020-09-13T22:29:49-07:00David Nygaardtag:davidnygaardproperties.com,2012-09-20:4110Is Getting a Home Mortgage Still Too Difficult?<img src="https://assets.site-static.com/userfiles/1780/image/getting-a-home-mortgage.jpg" alt="Is Getting a Home Mortgage Still Too Difficult?" title="Is Getting a Home Mortgage Still Too Difficult?" height="410" width="750" />
Potential homebuyers are always cautioned to be aware of mortgage lending standards and the difficulty they might face when trying to obtain a mortgage. Credit availability is expanding, making it easier to get a mortgage now than it was a year ago. The market is still tight however, and homebuyers should be prepared to shop around until they find a lender who is offering something that will meet the needs of their family.
Mortgage lending companies have high standards so it is important to make sure you and anyone else who will be included on the mortgage have their credit in check. The mortgage market is strict because lenders do not want to be put in a situation where they are forced to repurchase loans that are not paid on. They also do not want to end up in a litigation situation due to loan issues.
What Has Happened to the Number of Mortgages?
Due to the strict nature and requirements of the lending companies, the number of mortgages given out has significantly dropped. A report by the Housing Financial Policy Center at the Urban Institute showed that about 6.3 million fewer mortgages were given out between 2009 and 2015. The reasons behind this statistic are strict regulations and policies. These mortgages would have been granted if the lending standards where more reasonable.
Mortgage companies rely on calculations to determine if a home buyer will become delinquent on their payment. They will not give you a loan if you are too much of a risk for them. Credit history has a huge impact on this decision since lenders can see how often you pay back your debts. The history they receive is extensive. This view into your financial past causes lenders to take less risk when lending to you for your mortgage.
The Effect on the Economy
The housing market is recovering at a slower pace than it should since less potential homebuyers are being offered loans. While the market is still recovering with positive trends, fewer buyers can create a strain on other economic factors like home goods or construction jobs. Bottom Line
After the housing market boom and bust, mortgage lenders became stricter in their lending standards. It is not impossible to get a mortgage loan, but it can still be difficult for potential home buyers. Stay on top of your credit and make sure you and anyone else who is applying are in a good financial position so you can be approved for a loan. It is important to research different companies and their requirements to ensure success in getting a mortgage.2019-12-12T14:34:00-07:002019-12-12T14:35:49-07:00David Nygaardtag:davidnygaardproperties.com,2012-09-20:4108Common Things to Look Out for Before Buying Your Dream Home<img src="https://assets.site-static.com/userfiles/1780/image/3-questions-to-ask-before-buying-your-dream-home.jpg" alt="Common Things to Look Out for Before Buying Your Dream Home" title="Common Things to Look Out for Before Buying Your Dream Home" height="410" width="750" />
It is easy to become overwhelmed when you enter the home buying market. Friends, family, colleagues, and even acquaintances will give you their opinions if you are a first time home buyer. While most of them are looking out for your best interest, they are not fully aware of what is happening in the housing market.
It is important for you to be prepared and have your own questions ready. No matter what other opinions you are getting, you are the one buying the home and your comfort level will help make your final decision. Here are three important questions to ask before you purchase a home.
1. Why am I Buying a Home?
Regardless of the finances, it is important to think about what made you want to buy a home in the first place. Usually the reasons don’t have to do with money. Instead, home buyers are focused on how the house will impact their family in the future. A study done by the Joint Center for House Studies at Harvard found there are four reasons people buy a home. Those reasons include schools for your children, a safe environment, more room for your family to grow, and control of your own space.
These factors are the most common reasons people look to buy a new home. When you ask yourself why you are looking to purchase a home, do any of those factors come up? Spend time with your spouse or family members who are involved in this decision and determine why you want a home in the first place. Creating this list will help when searching for a home and can help your real estate agent find the best home for your needs.
2. What is the Trend with Home Values?
Our current economy and housing market is strong. That means home values and mortgage rates are increasing. If you are looking to purchase a home but want to stay within a budget, it may be in your best interest to move quickly. It is forecasted for these trends to continue in an upward motion, causing home values to continue to increase.
3. What About Current Mortgage Rates?
The ticket price is not the only thing you should be concerned with when purchasing a home. Mortgage rates are always changing and can have a huge impact on your monthly payments. Current trends show mortgage rates are rising. This is something to consider if you are debating the right time to purchase a home, since the rates may be even higher down the road.
Bottom Line
You and your family are the only ones who can determine the right time to purchase your dream home. It is important to decide exactly why you want a new home for your family and decide on a budget that will be comfortable moving forward. This budget may affect the amount of time you have to search for a home, since home prices and mortgage rates are increasing. 2019-12-12T14:34:00-07:002019-12-12T14:35:58-07:00David Nygaardtag:davidnygaardproperties.com,2012-09-20:4107Will Increasing Mortgage Rates Impact Home Prices?<img src="https://assets.site-static.com/userfiles/1780/image/mortgage-rate-projections.jpg" alt="Will Increasing Mortgage Rates Impact Home Prices? " title="Will Increasing Mortgage Rates Impact Home Prices? " height="410" width="750" />
There has been some discussion recently on home prices in relation to mortgage rates. Some believe if there is a rapid rise of mortgage rates, home prices should decrease. Logically it makes the most sense for the price of the house to drop when interest rates are rising, but this is not always the case.
This theory of home prices decreasing is typically discussed by future home buyers. As a buyer you would like to think if you are paying higher rates on your mortgage, you should be able to see a decrease in cost somewhere else. Unfortunately, these rates are rising because the economy is in better shape. As the economy succeeds, incomes rise, rates go up, as well as the price of the home.
A recent study by the John Burns Real Estate Consulting found mortgage rates have very little impact on the cost of the home. The housing market and price increases are affected by things like job growth in the area and rising wages. Coincidentally, these same factors are causing the rise in the mortgage rates since people can afford to take out more.
Bottom Line
As the economy progresses and strengthens, mortgage rates and home prices will fluctuate. It is a misconception as rates increase, home prices will decrease. Advances in the economy have shown that rates and home prices are more likely to increase together.2019-12-12T14:34:00-07:002019-12-12T14:35:54-07:00David Nygaard