Types of Mortgages

Are you in the process of buying a house? Are you in the beginning stages of house hunting? Now is the
time to know your financing options. Exactly what type of home loans are out there for you? What
home loan option would be best for you? Finding the right home loan for you can be a bit overwhelming
especially if you are not equipped with the right information. Knowing what types of home loans are
available is very important when you are choosing a mortgage lender. Depending on what type of loan
you are applying for may require you to work with a certain lender based on the type of loan you are
applying for. For example, an FHA loan with down payment assistance attached will require you to work
with a lender that has been approved by your local government. So, what exactly are your loan options?
Here is a list of the most popular home loans that are currently available:

Fixed-Rate Mortgages – A Fixed Rate Mortgage is the most common type of conventional home loans on
the market. The fixed-rate mortgage is a lower risk home loan with no surprises, but you will also be
paying a higher interest rate. The rates for this home loan do not change or fluctuate. Your monthly
principal and interest payment will stay the same throughout the term of the loan. There is one thing to
note, if you have an escrow account attached to this loan to pay your property taxes, homeowner’s
insurance, or your mortgage insurance, your total monthly payment can change if the rates change on
any of these items.

Adjustable-Rate Mortgage – On an Adjustable-Rate Mortgage you will find that the interest rates are
typically lower than the Fixed Rate Mortgage, but that only lasts for a specific time. The adjustable-rate
mortgage begins with an interest rate that doesn't change for five years and then starts adjusting the
rate each year thereafter.

FHA Loan – An FHA Loan is a loan that is insured by the government. An FHA loan lets you make a low
down payment, but you’ll have to secure mortgage insurance which increases the amount of your
monthly payments. An FHA loan is a fixed-rate mortgage, FHA Loans allows for a down payment as low
as 3.5 percent and doesn’t require you to have perfect credit to qualify. Keep in mind that because the
FHA loan is government regulated that based on the county you live in, there will be a set maximum
loan amount that you can receive. An FHA loan is a great loan for first time home buyers.
VA Loan – A VA Loan or Veterans Affairs loan is only for those who have served in the United States
Military. A VA Loan is such a great loan because you can receive 100% financing with no down payment
and mortgage insurance is not a requirement. Keep in mind that with a VA loan, the property you are
purchasing must be your primary residence and you are not able to purchase a “fixer-upper”. There is a
strict requirement on the type of home that you can purchase with this type of loan due to this loan
being a government loan.

USDA Loan – The United States Department of Agriculture (USDA) allows rural residents who may have a
low income and can’t find financing elsewhere to secure a home loan if they meet specific income
requirements. The Rural Housing Service (RHS) manages the USDA loan process.

Real estate concept,Customer signing contract about home loan agreement.

As you can see, there are many different types of home loans that are available. Now it is just time to
find the right home loan for you and your situation. Be sure to do your research and reach out to a
mortgage lender for help in finding the best home loan.

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Choosing a Mortgage Lender

Buying a house is one of the largest purchases you will ever make in your lifetime. Unless you are paying cash for house you will need to find the best mortgage lender for you and your needs. When you think about how long you pay on your mortgage, 15-30 years you will want to get a loan from a mortgage broker that you trust and has your best interest at heart. 

Keep in mind that finding a mortgage lender isn’t all about finding the best rates. It is important to find a lender who can guide you through the process and help you understand what is going on. As well as guide you through the decision-making process of your home-buying journey. When choosing a lender, consider your needs and choose a lender that can best meet your needs throughout your home-buying process.

There are two ways that you can go about finding the right lender for you. The first is to research, interview, and choose the best lender for you. During your research process, ask your friends and family who have purchased homes who they used and how their experience was working with the lender that they decided to use. You can also browse online reviews. Knowing as much as possible about the reputation of the lender you’re dealing with can save you much stress later in the home-buying process. The second way is to go through a mortgage broker who will negotiate the best deal based on your needs between you and a mortgage lender. The mortgage broker can save you much time and angst by taking care of much of the work it takes to find the right lender. But know that brokers do earn money when they arrange the contract between you and the lender. You want to make sure that the mortgage broker you work with will have your best interest in mind and not the bottom line of the money that they will make from the lender that may have the best payout. Either way, you choose to find a mortgage lender, you will find the right lender for you.

One of the most daunting decisions you’ll make when buying a home is deciding which lender to choose. Don’t take the first one who accepts your application, but shop around, interview references and ask questions. Read the fine print of the deal. Mortgage lenders are happy to answer any questions and help you with any concerns that you may have. The lending process is a long invasive process. Your mortgage lender will dig through your finances from top to bottom, but don’t be alarmed. This is part of their process in making sure that you have the money to pay back the loan and will help them gain confidence in lending you such a large amount of money. They are there to help you through the entire home-buying process.

Before reaching out to a mortgage lender or a mortgage broker be sure that you have everything ready to go to make the mortgage process go as smooth and seamless as possible. Check your credit and make sure everything is in order. Don’t make any large purchases such as a car or open a new credit card. And lastly, make sure you have cash on hand for your down payment and closing costs. Having these items ready to go will make finding the right lender for your that much easier.

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Pre-Qualification and Pre-Approval Process

Being a first-time home buyer means you will have a lot of questions and need help navigating the purchase of your first home. One of the biggest questions most first-time homebuyers have is, how much money can I afford to spend on a house? Which brings us to the first step to purchasing a home. This is one of the most important steps in the process of purchasing a home unless you plan on purchasing a property with cash. The first step to the home purchasing process even before finding the right Real Estate Agent to help you find your dream home is getting your finances in order and obtaining your pre-qualification and pre-approval from your lender. 

Analyzing finances

Before you reach out to a lender to get pre-qualified and get a pre-approval, you should look at your finances and see where you are financially before reaching out to a lender. Keep in mind that once you reach out to a lender, you want to at least make sure your credit is in good shape. Your credit score is a very important part of how much you can be pre-approved for as well as if you qualify for any down payment assistance programs and the type of loan that you can get. Take the time to pull your credit report and review it thoroughly. Check to make sure that items on your credit report belong to you, and if not get them taken off as soon as possible. Check your credit card balances and get them paid down and remember that during this process you do not want to apply for any new credit cards or car loans. You must take the time to check your financial health so that there are no surprises when your lender pulls this information.

Once you know where you stand financially, now is the time to take the next steps and reach out to a lender to get pre-qualified and start the pre-approval process. I know most people think that the pre-qualification and pre-approval are the same things, but they are not. Keep in mind that you can skip the pre-qualification process altogether and go straight into the pre-approval process if you prefer. Getting a pre-qualification is basically like getting an estimate. During the pre-qualification process, you will provide your lender with information regarding your debt, income, and assets. The lender will then take this information and give you a ballpark estimate of how much you can borrow for your home loan. When you get a pre-qualification, just know that the amount that your lender provides you with is not a set-in-stone amount. The amount that they come up with is based on the information that you have provided to them. At this point, the lender has not pulled your credit or truly required any documentation from you. This just allows you to see a ballpark figure of what you could afford. But know that you have this information you can now move on to the pre-approval process.

Getting your pre-approval, is a must. Your pre-approval should l be submitted with any offer that you make on a property. To start the pre-approval process, your lender will have you complete a mortgage application.  Once you have completed the mortgage application your lender will begin digging into your financial history. First, the lender will run your credit and they will request supporting documents for your income, assets, and credit. Once your lender reviews this information thoroughly, they will determine what loan amount you qualify for, what your interest rate will be, and what loan type would best suit you. At this time, you can also speak to your lender about any down payment assistant programs that your state may have. At this point, your lender will provide you with a pre-approval letter that you will need to make sure you have on hand when searching for your home. Having your pre-approval letter available can give you an advantage when making offers on houses. It shows the seller’s that you are serious and are ready to go if the offer is accepted.

In conclusion, it is important to know your financial health to determine where you stand with beginning your pre-qualification and pre-approval process. Once you know you are ready to move on to getting a pre-qualification and/or a pre-approval, take your time to find the best lender for you. Your lender will get to know you very closely as they dig through your finances and help you get the financing you need for your home. Feeling comfortable with your lender will help you as you go through your home buying process.

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Seller’s Closing Costs

When you purchased your first home, it was an exciting time. Now that it is time to sell your home, there are a few things that are truly different from when you purchased your home. One of the biggest changes is the fees that you will need to pay at closing. These fees are your Closing Costs. Closing Costs are expenses that you pay that are over the purchase price of the property. In a Real Estate transaction, the Seller and the Buyer both have these fees, but the expenses that the Seller and Buyer are different from one another. As the seller, here is a list of expenses that you will need to pay when selling your home.

The Biggest Expense: Agents Commission

One of the biggest costs you will have when selling your home is the commission that you pay to your Real Estate Agent. This will usually be 5% or more of the value of the home. This expense should not be taken lightly, your Real Estate Agent will be sure to get top dollar for your property and make sure you are completely taken care of in every aspect of the selling process.

Don’t worry, you will not have to pay for your Real Estate Agents commission in cash. The commission will be paid out of escrow from your Seller Proceeds. Also, something else to be aware of is that your agent will not be getting this full commission, it is customary that the Buyer’s Agent receives a 2.5% or 3% commission.

Home sales broker closes the sale and sends key to the customer.

The most common costs in addition to the commission are:

 

1. Loan payoff fees

Your mortgage loan payoff will be paid through Escrow, during the escrow process your Escrow Officer will request your loan payoff demand from your mortgage company. Your mortgage will need to be paid in full to transfer the title of your property free and clear. If you have any lines of credit attached to your loan, that will be paid through escrow as well. 

Before selling your home, one of the things you should do is contact your mortgage company or review your last statement to see how much you still owe on your loan so there are no surprises.

2. Transfer taxes and recording fees

State or local governments will usually charge a tax and fee to transfer the title for the property from one owner to another. These fees will be provided to you during the escrow process.

3. Title insurance fees

Title insurance protects the owner of the property and the mortgage lender against future claims for any unknown issues with the title to the property at the time of sale. Issues may include fraud, forgery, unpaid property taxes, judgments, liens, or other encumbrances that were not discovered during a search of the property’s title history, which should have been conducted thoroughly before the sale.

Sellers typically pay the owner’s title insurance premium, as an undertaking that they have been honest in all their dealings regarding the sale.

4. Escrow Fees

The Escrow Fees are commonly based on the purchase price of the home. In some states, they use Attorneys to process Real Estate transactions, but in California, we use Escrow Offices to process Real Estate transactions. Escrow fees can vary depending on the Real Estate Transaction itself, these fees can change throughout the processes of the transaction. One advantage of working with an Escrow Officer at Oakwood Escrow is that we have the Oakwood One Rate Escrow Fee so that there are no surprises at the end of your transaction.

5. Additional closing costs

Additional closing costs for sellers can include outstanding matters related to the property, such as:

* Tax liens or judgments against the property

* Unpaid homeowner association dues

* Pro-rated property taxes up to the date of the sale

* Back taxes

These are the main closing costs that you will need to be aware of when selling your home. I know these fees/expenses seem like a lot, but you can always get an estimate from your Real Estate Agent or Escrow Officer at any time. Your estimate will include all of the fees listed above (you will need to provide the amount that you owe on your mortgage) so that you can see an estimate of your Seller Net Proceed that you will receive at the close of your transaction. If you need an estimate, please feel free to contact any of the Escrow Officers at Oakwood Escrow and they will be more than happy to provide you with an estimate for your property.

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Open House Ready

You have put your home on the market, now what? Well, its time to hold your house open. An Open House the first weekend of your home being on the market is one of the best things you can do to get more exposure and more buyer interest. An open house is for prospective buyers to view your home with no appointment necessary during the allotted time that you have set up for your open house. Know when you are having an open house, you want to make sure your home is cozy and inviting for prospective buyers to be able to see themselves living in your home. If you are working with a Real Estate Agent, they can help you get your home ready and be sure to allow them to use their expertise to make sure they navigate the open house and find the perfect buyer for your home. Here are a few tips to help you get your house ready for an open house.

Home interior with wooden accessories

 

Declutter your house.

One of the first steps to prepping your open house is to declutter your home. Get all the trash out, especially the junk that people can see as soon as they walk in your house. You will want to make sure to clear off your kitchen counters and remove any small appliances. You can tuck those small appliances away in your pantry or cabinets. Remove any items lying around on your bathroom counters that make it look unappealing to the eye. Basically, remove anything that will make your home look  crowded.

Clean, Clean, Clean.

Once you have decluttered your house, it is time to make sure it is spotless and clean. If you don’t have time to clean feel free to hire a cleaning service. If you don’t hire a cleaning service, you want to make sure that you dust and scrub every inch of your home. This includes power washing the outside of your house, your driveway, and walk-way areas. You want your home to be as appealing on the outside as it is on the inside. Don’t forget to neutralize any orders that may be in your home, especially if you have pets.

Curb Appeal

Take some time to clean up your front yard. Your front yard is the first thing a potential buyer sees, you wan to make sure it looks clean and presentable. Pull any weeds, trim the grass, prune your bushes, and water your plants. 

Spruce up your house.

One of the first things to do when sprucing up your home is to remove your family photos because buyers need to see a neutral house so that they can envision their own family living in your house. You may want to replace those photos with some generic inexpensive framed art that you can find at Home Goods, Marshalls, or TJ Maxx. While you are there pick up some new towels for the bathrooms and maybe some nice pieces for the kitchen and entrance. Also, you can set your dining room table with your best china and use some creative decorating skills to stage your dining table. Don’t forget to grab some softly scented candles for the day of the open house.

Plan on not being home.

If you are working with a Real Estate Agent, allow them to do what they do best and host your open house. It is best if you are not at the open house as prospective buyers will be more comfortable asking your agents questions and getting to know your house without you being present. Also, if you have pets make sure they are not in the house during the open house.

Now that you have some tips to help you get ready for your open house, it is time to get your open house marketed so that potential buyers know your house will be ready for viewing. If you are working with a Real Estate Agent, then you will have no worries. Your Real Estate Agent will make sure your home is marketed to potential buyers to get the most foot traffic possible. Once you have your open house be sure to touch base with your Real Estate Agent to see how it went and get any feedback that they received from potential buyers that could help sell your home. Also, don’t be afraid to ask your agent if there were any interested potential buyers so that you are prepared once the offers start rolling in.

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Is Staging Your Home Right For Me?

With the Spring and Summer fast approaching, you may be thinking now would be a great time to sell your home especially now with interest rates being low and properties selling like hotcakes. With selling your home comes several things that you need to do to get your home ready for the market. Aside from making sure your home is clean and spotless and your curb appeal is where it needs to be, it’s time to think about the interior of your home. This is known as staging your home.

interior home staging

When you were in the process of purchasing your home, during the beginning stages I am sure you looked at so many different homes to find the perfect one for you. During your house hunting did you come across homes that completely turned you off because they were messy and visually unappealing? Or you couldn’t picture yourself living in the home? As you are in the process of getting your home ready to put on the market, this is something to think about. Remember your experience and think about the experience that you would like potential buyers to have while they are viewing your home. You want them to feel comfortable, feel at home, and you want them to be able to see themselves living in your house. This is one of the reasons you should consider staging your home when you are ready to list it.

Here is something to think about when you are trying to determine if you will stage your house or not, staging your home can be the difference between your house being on the market for 6 days or 90 days. Not only is it possible to sell your home faster when it is staged, but you are more likely to get top dollar for your home due to proper staging. These are two of the reasons seller’s decide to have their homes staged when getting their house ready to put on the market.

One of the best things that you can do when trying to determine if staging your house is right for you is to talk to your Real Estate Agent. When your Real Estate Agent does their initial walk through of your home before they put it on the market, take advantage of this time and ask them what they think about your home and what areas of the house they think needs staging, or if they think your home could sell as-is. They will let you know exactly what they think and if they believe you would benefit from staging your house. Real Estate Agents truly have an eye to see what a prospective buyer would see as they view your home. Your Real Estate Agent should let you know if your home needs staging; and if so, what rooms they think need staging. Once you know if you are going to need staging, have your Real Estate Agent provide you with quotes from at least 3 different staging companies. Be sure to also do your own research to see what style you like best. 

There are so many great benefits to staging your home, but ultimately it is up to you. Do your research and ask questions. Your Real Estate Agent is the expert in getting your home sold, so don’t be afraid to ask them for help with deciding to stage your home.

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Spring Ready

With winter coming to a close, it is time to transition into Spring. And with Spring approaching comes Spring Cleaning and getting your home ready for the warmer weather. Spring is the perfect time of year, it’s not too hot and not too cold. The flowers begin to bloom and there is something in the air that makes this time of year so vibrant. For most people, Spring is the time for a new beginning and a fresh start, especially in the home. This is the best time to declutter and deep clean your home. There is just something about Spring Cleaning that makes you feel so good and organized. If you need help to get inspired or know where to start with getting your home ready for Spring, here is a list of the top things you can do to get your home ready for Spring.

           1. Clean. First things first, clean your house. I am not talking about a quick clean; I mean a deep clean. It is time to clean and disinfect every inch of your home and that includes the walls, baseboards, fans, vents, windows, outlet covers, carpet, floors, etc. Take the time to clean and dust everything that you may have neglected over the winter months. Now would also be a good time to clean your gutters, grill, and patio furniture. And don’t forget to power wash the exterior of your house. Once you the whole house is clean, you will feel so good and light.

spring cleaning

           2. Landscape. The spring time is the perfect time to show your landscaping some love. After the winter months, you may find dead plants, weeds, and shrubs that will need to be removed and/or replaced. Go ahead and replace your dead plants with beautiful new ones. You may also want to take this time to aerate and fertilize your lawn and reset your irrigation timer for more frequent watering of your lawn.

Removing Garden Weeds

           3. Declutter and Organize. With Spring cleaning comes decluttering and organizing. Since you are already in the cleaning mode, why not declutter and organize your home? I know sometimes the thought of decluttering and organizing your home can be overwhelming. The best way to get this process started is taking it room by room and working in stages. For each room that you declutter, you should have 2 boxes, one labelled donate, and the other labelled trash. This should make life much easier as you go through the declutter and organizing process. During this process, now would be a good time as you are going through your closet to switch out your winter items for your spring/summer wardrobe.

declutter and organize

           4. Change up the scenery.  Changing a few things in your home can make it feel more light/ livelier and will put in a vibrant Spring mood. For instance, adding some greenery to your home will brighten up your space. Changing out your throw pillows and blankets can also play a big part in changing up your space. You can give your home a fresh look by just moving around your furniture. There are so many things that you can do to change up the scenery and make your home Spring ready.

change up the scenery

One final tip in getting your home ready for Spring, be sure to test your HVAC system and change out your air filters so you are prepared for those hot days. Now that you know where to start with getting your home Spring ready, what are you waiting for? Let’s get cleaning.

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