Category Archives: Homes

What Is A VA Loan?

The VA Loan became known in 1944 through the original Servicemen’s Readjustment Act also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families, and the dream of home ownership became a reality for millions of veterans. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and to the growth of the nation’s economy.With more than 25.5 million veterans and service personnel eligible for VA financing, this loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.

VA will guarantee a maximum of 25 percent of a home loan amount up to $104,250, which limits the maximum loan amount to $417,000. Generally, the reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed. All veterans must qualify, for they are not automatically eligible for the program.

VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.

Selling your home: 10 things to consider. #4 & #5

4. Weigh the pros and cons of selling your house yourself. Be realistic about Photo by Deb Duncanthe amount of money you can actually save by selling without an agent and the amount of additional time and effort that you must invest. If you want to sell without a real estate agent, be sure to hire a good real estate lawyer and read a good house-selling book cover to cover so you know what you’re getting into.

5. Field a great team. Selling your house usually requires that you hire and work with various real estate professionals (such as real estate agents, property inspectors, escrow officers, and, possibly, tax, legal, or financial advisors). If you put the right players on your team, you maximize your chances of a successful sale.

Questions? Need help? Go to my web site at Mortgage Link for more information or send me an e-mail.

Ellen

Selling your home: 10 things to consider. #1

1. Your most important house-selling decision is whether or not to sell.

Take the time to research your options and the personal financial ramifications of each option before you sell.

The expenses of selling your current house and buying another will gobble a large chunk of your house’s equity (that is, the market value of your property less the outstanding mortgage balance).

Before you sell your house, weigh the expected benefits of buying a new home against these transaction costs. Be sure to estimate your proceeds of sale and relocation costs before selling.

Questions? Need help? Go to my web site at Mortgage Link for more information or send me an e-mail. It’s okay to ask for directions. Really.

Ellen

Today’s Vocabulary Lesson

Commitment: An agreement, frequently in writing, between a lender and a borrower to loan money at a future date, subject to certain conditions.

Comparables: Refers to similar properties used for comparison purposes in the appraisal process. These properties will be reasonably the same size and location, with similar amenities and characteristics, so that the approximate fair market value of the subject property can be determined.

Condominium: Ownership of a single unit in a multiunit building or complex of buildings. Along with this goes a share of ownership of the common areas.

Contingency: A condition that must be met for a contract or a commitment to remain binding.

Conventional Mortgage: Any mortgage loan that is not insured by FHA, guaranteed by VA, of funded by a government authorized bond sale or grant.

Convey: To transfer real estate from one person to another.

Credit Report: The report to a prospective lender on the credit standing of a prospective borrower

Go to the Mortgage Glossary at Mortgage Link to see the rest of the alphabet!

Ellen

5 Things You Must Know Before Obtaining a Mortgage: #5

Industry research has revealed that there are 5 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.

5. You should seriously consider dealing with a Mortgage Expert

Photo by Deb Duncan

Consider dealing only with a professional who specializes in mortgages and understands your needs and desires. Enlisting The Mortgage Link’s services will make a significant difference in the cost and effectiveness of the mortgage you obtain.

Go to my web site at Mortgage Link for more information or send me an e-mail. By working with me, you can reach your goals faster.

Contact me today and find out how much home you can afford or how much money you can take out of your home to renovate, send your kid to college, or invest for the future.

Ellen

This is the final segment of a 5-part series on how to keep the stress low and the savings high when you get a mortgage. By paying close attention to resolving these five common issues, you will improve your chances of getting the property you want, and get the kind of mortgage you can handle in the long term.

Check back for my next series, “10 Ideas Before Selling Your House.”

Today’s Vocabulary Lesson

Cap (interest rate): The maximum interest rate increase allowable on an adjustable rate mortgage. Does not result in negative amortization. See Negative amortization.

Cap (payment rate): The maximum payment amount increase allowable on an adjustable rate mortgage. May result in negative amortization. See Negative amortization.

Certificate Of Title: A statement that shows ownership of property, stating that the seller has clear legal title.

Closing: The concluding day of the real estate transaction, when title and deed pass from seller to buyer, the buyer signs the mortgage and pays the purchase price and closing costs.

Closing Costs: Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Also called “settlement costs.”

Closing Statement: A financial disclosure giving an account of all funds received and expected at closing, including the escrow deposit for taxes, hazard insurance and mortgage insurance for the escrow account.

Commission: An agent’s or broker’s fee for bringing the principals together and helping to negotiate a real estate transaction, often a percentage of the sales price or flat fee.

Go to the Mortgage Glossary at Mortgage Link to see the rest of the alphabet!

Ellen

5 Things You Must Know Before Obtaining a Mortgage: #4

Industry research has revealed that there are 5 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.

4. Make sure you understand which prepayment privileges and payment frequency options are available to you Photo by Deb Duncan

More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage. Simply by structuring your payments so they are paid more frequently will significantly reduce the amount of interest that you will be charged over the term. 

For the same reason, authorized pre-payment 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.

Go to my web site at Mortgage Link for more information or send me an e-mail. By working with me, you can reach your goals faster.

Ellen

This is part 4 of a 5-part series on how to keep the stress low and the savings high when you get a mortgage. By paying close attention to resolving these five common issues, you will improve your chances of getting the property you want, and get the kind of mortgage you can handle in the long term.

5 Things You Must Know Before Obtaining a Mortgage: #3

Industry research has revealed that there are 5 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.

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 future, impacting how much money you can afford to pay toward your mortgage? The answers to these and other questions will help you determine the most appropriate mortgage to suit your needs.

Go to my web site at Mortgage Link for more information or send me an e-mail. I can help you plan your future.

Ellen

This is part 3 of a 5-part series on how to keep the stress low and the savings high when you get a mortgage. By paying close attention to resolving these five common issues, you will improve your chances of getting the property you want, and get the kind of mortgage you can handle in the long term.

Today’s Vocabulary Lesson

Application Fee: That part of the closing costs pre-paid to the lender at time of application to cover initial expenses.

Appraisal: A report made by a qualified person as to the value of a property as of a given date.

Assessed Value: The value placed on a piece of real estate by the taxing authority for the purpose of taxation. Also called an assessment.

Assumption of Mortgage: The purchaser takes over mortgage payments for the balance of the loan, assuming primary liability. Unless specifically released by the lender, the seller remains secondarily liable.

Need to learn a term that starts with B through U? Go to the Mortgage Glossary at Mortgage Link!

Ellen

Today’s Vocabulary Lesson

From the Mortgage Glossary at Mortgage Link:

Abstract (of title): A written summary of the title history of a particular piece of real estate.

Acceleration Clause: A provision of a mortgage or note which provides that the entire outstanding balance will become due and payable in the event of default.

ARM (Adjustable Rate Mortgage): A mortgage in which the interest rate is adjusted periodically, based on the movement of a financial index.

Amortization: Repayment of loan by installment payments. As the payments are made, the debt is reduced so that at the end of fixed period or term, no money will be owed.

APR (Annual Percentage Rate): The annual percentage rate refers to the total cost of the loan, expressed as a yearly rate.


Don’t worry – there won’t be a pop quiz.  But I will post mortgage terms from time to time to help you learn how to speak Mortgage-ese like a pro!Ellen