Dealing with the dangers of radon gas
Step 1 in dealing with the deadly gas? Test for it
What is radon?You can't smell or see radon. It's an odorless, colorless gas that is the second-leading cause of lung cancer in the U.S. If you're a smoker, the presence of radon in your home will considerably increase your chance of getting lung cancer. A study published in 2005 in the journal Epidemiology concluded your chance of getting lung cancer increases by 11 percent to 21 percent at average radon concentrations of about 3.0 picocuries per liter (pCi/L) of air over an exposure period of 5 to 30 years. The EPA recommends radon mitigation at 4.0 pCi/L.The presence of radon doesn't mean your home was built over an atomic-waste dump. Its origins are natural--from the breakdown of uranium found in almost all soil. The gas finds its way into a home through such paths as cracks and other holes in the foundation.To learn about other indoor air-quality issues, read our report Indoor Air Quality: How Clean is the Air in Your Home?
Unsure about whether your home has high levels of radon? It's time to find out if your house is among the estimated 1 in 15 with dangerous levels of the cancer-causing radioactive gas. The federal government has begun a campaign to increase radon awareness, urging homeowners to test their homes for this silent killer that is estimated to claim 21,000 lives a year."We know that radon-related deaths can be prevented,'' says EPA Mid-Atlantic Regional Administrator Donald S. Welsh. "No one has to live in a home with high radon levels because virtually any home with a radon problem can be fixed. Our hope is that once people understand this health risk, they will test their homes for radon and fix any problems they find."There is no national requirement to test for radon, and the gas is found in every state, though the potential for high levels is greater in some locations, particularly in the Northeast and Midwest. Check with your state radon office to learn about state-specific regulations and to find certified radon-testing and radon-mitigation companies.While you might have had your home tested for radon when you purchased it, research indicates as many as 80 percent of American homes still need to be tested, according to the Environmental Protection Agency and the Surgeon General's Office. Consumers Union, the nonprofit publisher of Consumer Reports, recommends not waiting for a home sale to check for the gas. If a test already has been completed, it is not necessary to repeat the test, unless you've fundamentally changed your home in a way that could allow more radon to enter the structure. Those changes include adding new windows and doors, modifying your heating or cooling system, adding or changing exhaust systems or any other element that could change the pressure and ventilation characteristics of the house, and building an addition.
Radon Action MonthTo try to heighten awareness of the problems of radon, the EPA declared January National Radon Action Month. Children from across the country competed in a poster contest sponsored by the National Safety Council to draw attention to radon. Here are the winners.
It's easy to determine whether radon is a concern in your home. Home test kits that measure levels of radon typically cost less than $20. In many locations, you can get discounted kits through your state or county health department or environmental-affairs department. The New York State Department of Health, for example, offers residents a kit for $6.75 and will provide a free kit to any resident who has already had work done by a mitigation contractor and wants to verify that radon levels are low.If you decide to test on your own, you have two choices. Short-term testing, the quickest way to test, takes 2 to 90 days. Long-term testing runs for more than 90 days, giving a more accurate picture of year-round levels. About all you have to do is place a sampling container in the lowest usable level of your home, typically the basement. Seal the container immediately after the specified test period and send it to the laboratory marked on the package.After the test is processed, sometimes in just a few days, you will receive a report (by mail or e-mail or through a Web site) that will show the measure of gas detected. You should perform a short-term or long-term follow-up test if the reading is more than 4.0 picocuries per liter (pCi/L). (Sometimes the test results show "Working Levels," or WL. The threshold of 4.0 pCi/L corresponds to 0.016 WL.) If the radon levels are high, you can hire a certified radon-remediation contractor. Find one through your state radon office or through these private organizations: the National Environmental Health Association and the National Radon Safety Board.Contractors will reduce levels of gas in your home by:
Installing a suction system to draw the gas out of and away from the home
Changing the ventilation and pressurization in the basement
Sealing foundation cracks and openings
Expect to pay about $800 to $2,500, with an average bill about $1,200.If you live in an area with a cold climate, it's best to test during the winter months, when windows are closed, limiting air exchange. The low pressure created by a chimney or other ventilation device can draw soil gases into the home near the foundation.
Thursday, February 22, 2007
Thursday, October 19, 2006
More information about Belle Meade
Currently, there is 15 and half months worth of inventory in Belle Meade. Some of them are new listings and others have been active for a while.
Average days on the market in Belle Meade before homes are selling is 79 days. Considering a majority of the homes in Belle Meade are in the million dollar plus range, the buyer pool for these properties is going to be smaller than other neighborhoods thus the abundance of homes and the time it is taking to sell these properties. With a strong fall market approaching, I expect to see prices drop on these homes that have been active for a while, continuing the trend of a strong buyers market.
ZIP Code: 37205
Location Characteristics: Belle Meade is one of Nashville's oldest and most charming neighborhoods. Consisting of both updated exisitng homes and new construction homes, the charm and characteristics of this "city within a city" makes Belle Meade the most exclusive neighborhood in Nashville. It's central location makes it easy to enjoy local shopping as well as local and down town activity.
Belle Meade is located just south and west of the heart of Nashville, and gets its name from the Greek Revival Ante-bellum plantation mansion erected in 1853 on the 5,400 acre thoroughbred horse nursery owned by the family of John Harding. Today, the evidence of skirmishes between Union and Rebel soldiers during the Civil War are still visible in the mansion's massive limestone columns quarried from the property. Belle Meade is listed in the National Register of Historic Places, and is featured on the Ante-bellum Trail of Homes.Belle Meade community is only 3.1 square miles, and is home to slightly more than 3,000 residents whose median age is 43.2. Median household income is substantially above that of the state average at $144,720.
Average days on the market in Belle Meade before homes are selling is 79 days. Considering a majority of the homes in Belle Meade are in the million dollar plus range, the buyer pool for these properties is going to be smaller than other neighborhoods thus the abundance of homes and the time it is taking to sell these properties. With a strong fall market approaching, I expect to see prices drop on these homes that have been active for a while, continuing the trend of a strong buyers market.
ZIP Code: 37205
Location Characteristics: Belle Meade is one of Nashville's oldest and most charming neighborhoods. Consisting of both updated exisitng homes and new construction homes, the charm and characteristics of this "city within a city" makes Belle Meade the most exclusive neighborhood in Nashville. It's central location makes it easy to enjoy local shopping as well as local and down town activity.
Belle Meade is located just south and west of the heart of Nashville, and gets its name from the Greek Revival Ante-bellum plantation mansion erected in 1853 on the 5,400 acre thoroughbred horse nursery owned by the family of John Harding. Today, the evidence of skirmishes between Union and Rebel soldiers during the Civil War are still visible in the mansion's massive limestone columns quarried from the property. Belle Meade is listed in the National Register of Historic Places, and is featured on the Ante-bellum Trail of Homes.Belle Meade community is only 3.1 square miles, and is home to slightly more than 3,000 residents whose median age is 43.2. Median household income is substantially above that of the state average at $144,720.
Belle Meade Statistics
Through the 4th Quarter, 2006: (37205)
201 properties on market.
List Price: $889,211
Days on Market (DOM): 83
17 single family properties were pending
List Price $644,641
Days on Market (DOM) 95
4,051 single family properties have closed
List Price $428,196
Sales Price $411,959
Days on Market 62
64 Condo properties were on the Market
List Price:$476,021
Days on Market (DOM): 106
10 Condo properties were pending
List Price $489,150
Days on Market (DOM) 30
1,787 Condo properties have closed
List Price $174,685
Sales Price $169,481
Days on Market (DOM): 62
InmanNews recently reported that homes sales in markets nationwide have slowed considerably in the last year, causing property inventory levels to rise and price gains to slow or even decline in some areas, and national consumer confidence indexes show some of the lowest confidence levels toward housing in a decade. The University of Michigan's monthly survey of consumers in September showed that home-buying attitudes were at the lowest level since 1990, with consumers citing concerns over potential future price decreases and increases in mortgage interest rates.Despite the unfavorable outlook on housing, consumers' assessment of overall economic conditions was less pessimistic in September compared with past months. Overall consumer confidence, which decreased sharply in August, rebounded in September, according to The Conference Board, which reported its index increased to 104.5 from 100.2 in August, and the University of Michigan, which reported its index stood at 85.4, up from 82 in August.Real estate brokers agree that home buyers' attitudes have changed, but said that overall, buyers they are working with still feel real estate is worth their money. The difference today from a year ago is that buyers in many markets know they have the upper hand and are letting homes sit on the market longer in hopes of finding a better deal. There's a lack of urgency in pushing buying decisions, brokers say.
Please visit my website at www.NashvillesRealtor.com for a FREE Relocation Packet and to search for Belle Meade, TN Homes.
ZIP Code: 37205
Approximate Location Boundaries: Belle Meade
Location Characteristics: When you think about Belle Meade, you can't help thinking about horses. Belle Meade used to be the "nursery" for thoroughbred horses. Today, Belle Meade is a thriving community. The economy is good and jobs are plentiful which lend to the strong real estate market.
201 properties on market.
List Price: $889,211
Days on Market (DOM): 83
17 single family properties were pending
List Price $644,641
Days on Market (DOM) 95
4,051 single family properties have closed
List Price $428,196
Sales Price $411,959
Days on Market 62
64 Condo properties were on the Market
List Price:$476,021
Days on Market (DOM): 106
10 Condo properties were pending
List Price $489,150
Days on Market (DOM) 30
1,787 Condo properties have closed
List Price $174,685
Sales Price $169,481
Days on Market (DOM): 62
InmanNews recently reported that homes sales in markets nationwide have slowed considerably in the last year, causing property inventory levels to rise and price gains to slow or even decline in some areas, and national consumer confidence indexes show some of the lowest confidence levels toward housing in a decade. The University of Michigan's monthly survey of consumers in September showed that home-buying attitudes were at the lowest level since 1990, with consumers citing concerns over potential future price decreases and increases in mortgage interest rates.Despite the unfavorable outlook on housing, consumers' assessment of overall economic conditions was less pessimistic in September compared with past months. Overall consumer confidence, which decreased sharply in August, rebounded in September, according to The Conference Board, which reported its index increased to 104.5 from 100.2 in August, and the University of Michigan, which reported its index stood at 85.4, up from 82 in August.Real estate brokers agree that home buyers' attitudes have changed, but said that overall, buyers they are working with still feel real estate is worth their money. The difference today from a year ago is that buyers in many markets know they have the upper hand and are letting homes sit on the market longer in hopes of finding a better deal. There's a lack of urgency in pushing buying decisions, brokers say.
Please visit my website at www.NashvillesRealtor.com for a FREE Relocation Packet and to search for Belle Meade, TN Homes.
ZIP Code: 37205
Approximate Location Boundaries: Belle Meade
Location Characteristics: When you think about Belle Meade, you can't help thinking about horses. Belle Meade used to be the "nursery" for thoroughbred horses. Today, Belle Meade is a thriving community. The economy is good and jobs are plentiful which lend to the strong real estate market.
Friday, June 16, 2006
PMI:Private Mortgage Insurance
Private Mortgage Insurance Explained
Many first time homebuyers has grumbled about paying private mortgage insurance. This article discusses the subject of private mortgage insurance, also known as "PMI." Private Mortgage Insurance, unless the owners are insane, every business in the United States carries some form of insurance to protect against losses. The various lending institutions that issue home loans, equity lines, and refinances to borrowers are no different. The insurance they carry is private mortgage insurance.Private mortgage insurance protects a lending institution from losses if you default on your home loan and your home goes into foreclosure. Essentially, the lending institution is going to be covered for any shortages between the cost of liquidating the home and the amount of the loan. This is of particular importance to a lender when the housing market pulls back from high valuations. In such a pull back, it is not uncommon to see the total mortgage balance exceed the value of the home. Obviously, this makes lenders uncomfortable. Most homeowners understand the need for private mortgage insurance. The grumbling starts, however, when they find out who has to pay for the insurance. Yes, you the homeowner, are on the hook. As the homeowner, you are paying for insurance that will protect the lender if you default. While this may not seem fair, keep in mind the lender is giving you a rather sizable chunk of money. If you are still grumbling, there is a way to avoid paying mortgage insurance.The 20% Down Rule: If you accept a home loan, the 20% figure will become an extremely important figure. Why? Because 20% is a magic figure in the world of home loans and mortgages. If you make a down payment of 20%, you are not required to obtain or pay for private mortgage insurance.
With PMI premiums running $1,000 or more a year, it makes sense to make a 20% down payment if at all possible. What if you can't scrape together 20% of the home value for the down payment? You have two options: You can either get a piggy back loan, which is getting one loan at 80% of the purchase price and another loan at 10-20% of the purchase price, but with a higher interest rate. OR you're stuck paying PMI, but not forever. Once your equity in the home reaches 20% of the valuation, you can cancel the PMI. Keep a close eye on your equity as lending institutions are under no duty to tell you when the magical 20% figure is reached. Oddly, they almost never seem to remember! PMI, Private mortgage insurance is expensive, but you can avoid it with a sizeable down payment. If you do not have that much money on hand, try to keep in mind your home in Nashville is an investment and the home loan gives you the ability to buy it.
Many first time homebuyers has grumbled about paying private mortgage insurance. This article discusses the subject of private mortgage insurance, also known as "PMI." Private Mortgage Insurance, unless the owners are insane, every business in the United States carries some form of insurance to protect against losses. The various lending institutions that issue home loans, equity lines, and refinances to borrowers are no different. The insurance they carry is private mortgage insurance.Private mortgage insurance protects a lending institution from losses if you default on your home loan and your home goes into foreclosure. Essentially, the lending institution is going to be covered for any shortages between the cost of liquidating the home and the amount of the loan. This is of particular importance to a lender when the housing market pulls back from high valuations. In such a pull back, it is not uncommon to see the total mortgage balance exceed the value of the home. Obviously, this makes lenders uncomfortable. Most homeowners understand the need for private mortgage insurance. The grumbling starts, however, when they find out who has to pay for the insurance. Yes, you the homeowner, are on the hook. As the homeowner, you are paying for insurance that will protect the lender if you default. While this may not seem fair, keep in mind the lender is giving you a rather sizable chunk of money. If you are still grumbling, there is a way to avoid paying mortgage insurance.The 20% Down Rule: If you accept a home loan, the 20% figure will become an extremely important figure. Why? Because 20% is a magic figure in the world of home loans and mortgages. If you make a down payment of 20%, you are not required to obtain or pay for private mortgage insurance.
With PMI premiums running $1,000 or more a year, it makes sense to make a 20% down payment if at all possible. What if you can't scrape together 20% of the home value for the down payment? You have two options: You can either get a piggy back loan, which is getting one loan at 80% of the purchase price and another loan at 10-20% of the purchase price, but with a higher interest rate. OR you're stuck paying PMI, but not forever. Once your equity in the home reaches 20% of the valuation, you can cancel the PMI. Keep a close eye on your equity as lending institutions are under no duty to tell you when the magical 20% figure is reached. Oddly, they almost never seem to remember! PMI, Private mortgage insurance is expensive, but you can avoid it with a sizeable down payment. If you do not have that much money on hand, try to keep in mind your home in Nashville is an investment and the home loan gives you the ability to buy it.
Thursday, June 15, 2006
WHAT YOU NEED TO KNOW TO APPLY FOR A MORTGAGE
Applying for your first home loan might seem like an easy process simply because people buy and sell homes every day. However, buying a home is not like buying a new piece of furniture or even a new car, and applying for a home mortgage can be a time consuming process requiring a lot of patience. But, if you know what to expect up front, the home mortgage process will be much easier and a lot less stressful.The following 3 tips will help you save time and money when researching and applying for a home mortgage to suit your specific needs.
Nashville Home Mortgage Tip #1: Interest Rates - before choosing a lender you will want to shop around to see what current mortgage rates are. Shopping for mortgage rates online is a timesaver and you can frequently find lower rates as well. Some of these companies have hidden fee though, so be careful! Your mortgage rate will affect how much money you have to pay back over the term of the loan, so the lower the better.
Nashville Home Mortgage Tip #2: Fixed or Variable Interest Rate - when it comes to your mortgage there are more options than just a loan you pay back over a set amount of time. You can choose different mortgage interest rates that work best for your current and future situation. So, before you apply for a mortgage do some research on variable and fixed interest rates to find what will work best for you.
Nashville Home Mortgage Tip #3: Down Payment - when first applying for a Nashville mortgage you might not know the specific amount of the down payment you will be required to pay. If you have questionable credit, many times a lender will require you to pay between 10% and 20% of the home's value up front, but if you have good credit you can make a lower down payment AND get a great rate. This depends on the lender, so shop around.
When buying or selling Nashville homes be sure you use a Nashville Realtor that is honest, trustworthy, and a great negotiator, be sure to use Josh Anderson! We save our clients time, money and headaches!
Nashville Home Mortgage Tip #1: Interest Rates - before choosing a lender you will want to shop around to see what current mortgage rates are. Shopping for mortgage rates online is a timesaver and you can frequently find lower rates as well. Some of these companies have hidden fee though, so be careful! Your mortgage rate will affect how much money you have to pay back over the term of the loan, so the lower the better.
Nashville Home Mortgage Tip #2: Fixed or Variable Interest Rate - when it comes to your mortgage there are more options than just a loan you pay back over a set amount of time. You can choose different mortgage interest rates that work best for your current and future situation. So, before you apply for a mortgage do some research on variable and fixed interest rates to find what will work best for you.
Nashville Home Mortgage Tip #3: Down Payment - when first applying for a Nashville mortgage you might not know the specific amount of the down payment you will be required to pay. If you have questionable credit, many times a lender will require you to pay between 10% and 20% of the home's value up front, but if you have good credit you can make a lower down payment AND get a great rate. This depends on the lender, so shop around.
When buying or selling Nashville homes be sure you use a Nashville Realtor that is honest, trustworthy, and a great negotiator, be sure to use Josh Anderson! We save our clients time, money and headaches!
FIRST TIME HOMEBUYERS
Many call it the American dream, but home ownership can become a nightmare for first-time buyers who aren't prepared.
Many buyers get trapped in homes they can't afford because of expensive mortgages that may be Adjustable Rate(ARM), interest -only, or negative amortization.
As you may know, I am a real estate consultant with Keller Williams in Nashville, TN. I think There is a need to educate first-time home buyers because they can be victimized by predatory lenders.
Buying your first home can be a little scary because it's probably the biggest investment you've ever made, but if you are educated by your Realtor with information when you see a loan officer, you're not as likely to get into something that's not right for you or that you will not be able to afford down the road.
Here's some advice on what first-time buyers should do before purchasing a home:
Check your credit rating: The average credit score in the U.S. is 678. Beome familiar with what's on your credit report because you will use it for big purchases and many people are surprised when they see it for the first time. Your credit is affected in a lot of different ways as well.
Credit ratings are used by lenders to determine what interest rate to charge for a mortgage, but not all are accurate. Sometimes bad debts from one person are listed on the credit report of another person with the same or similar name, which can lower a credit score.
Besides mistakes, delinquent debts also can drag down credit ratings. Fix your credit as soon as you can because you get better rates for having a better score!
Pay off bills: Lenders consider all forms of debt when determining how much to lend for a home loan, so buyers can qualify for higher mortgage limits if they first pay off other loans. Never make a big purchase, such as buying a new car, when you are about to buy a home.
Mortgage lenders typically reduce home loan limits by $10,000 for every $50 a couple owes in minimum monthly payments for credit cards or car loans. Couples who owe $500 a month in credit and car payments, therefore, can have their mortgage limits slashed by $100,000.
Calculate what's affordable: Home shoppers routinely are advised to get prequalified for a mortgage so they know how expensive a home they can buy.
But just because a lender says they're qualified for a certain size loan doesn't mean buyers can afford the payments. Always try to get Pre-approved instead of Pre-qualified!
Lenders should look at debt-to-income ratios to determine what people actually can afford to pay every month. This should not exceed 28%.
I think home buyers should fill out a detailed monthly income and expense record.
Just because a mortgage broker says a couple qualifies for a $2,500-a-month loan payment doesn't mean they have that much to spare.
Most first-time buyers don't realize that in addition to paying for the principal and interest on their loan, they also will have to pay property taxes, mortgage insurance and probably more for water, sewer, electricity and gas than they did as a renter.
Be responsible and never buy more house than you really can afford. Just because you are approved for $250,000 does not mean you have to spend that amount. Stay within your means. Do the math. It's smart to figure out what payment you can live with comfortably.
Research loans: Many people think they're getting great loans, but a lot of times they are not. Many mortgages will stick you with hidden fees until yo uget to the closing table or some type of adjustable fee or penalty, so be careful to go with a reputable lender.
Some mortgages require buyers to pay 4 percent of the loan in advance in the form of "points," even when the buyers' credit scores qualified them for upfront payments half that high.
Many buyers also get confused when getting funding from a combination of mortgages, like a first loan that covers 80 percent of the debt and a second loan that covers the remaining 20 percent.
The second loan always has a higher interest rate than the first loan because it's more risky for the lender, but it gets you out of paying the PITI (principal, interest, taxes, and Insurance)
Two loans aren't always necessary. Buyers with a credit score of 680 or higher should be able to get 100 percent financing with one mortgage at a good rate.
I think borrowers should be wary of adjustable-rate loans and those that require interest-only payments.
Pick an agent: Not all real estate agents are equally talented or committed to helping first-time buyers. Some agents do not care or do not want to educate buyers, but this is very important at all stages, particularly for first time homebuyers! There is a learning curve with homebuying and you need to learn and know all the steps. Many first timers do not know what earnest money is and do not understand the purpose, but it is a consideration and it shows the seller that you are serious about buying their property. The higher the earnest money amount, the more serious you look. Typically, you offer 1% of the asking price, but if it is a hot market, you may want to offer more because there will be many offers on the table.
Shop for a home: Start with a condo if you have to and work your way up from there. This is not your forever and ever home, just a starter. You need to realize this is your first home. It is your foot in the door. After you build up equity, then you can move up.
Make deal contingent: Before signing any purchase contract buyers should make sure it lets them get their down payment back if something goes wrong.
These contingency clauses should include a requirement that the home pass an extensive home inspection as well as financing.
Shop around for a good home inspector and be present during the inspection. Your agent should have a list of inspectors, lenders, title companies and anything else you may need. Be present during the inspection if yo ucan and if not, have your agent present. Avoid using any inspector recommended by the seller or the seller's agent.
Buyers also should be able to get their down payment back if the appraised value of the house shows the sales price was too high.
Read everything: Loan documents and sales contracts typically are extensive and complicated. You must read your documents. If you don't understand everything, it's OK to get someone to explain it to you.
Compare what you were told would be in the documents -- interest rates and loan conditions -- with what's printed.
Ask question...do not be embarrassed. Buyers also should be wary of verbal promises that aren't included in the contracts. If it's not in writing, it doesn't exist!
Expect closing costs: Even if a 100 percent loan has been arranged, buyers typically must come up with some cash for required fees.
You should have at least 3 percent of your loan amount available to cover closing costs. Some mortgages will allow you to wrap it into your mortgage, but if you cannot afford the 3%, my opinion is that you should not be buying a house!
I recommend buyers have at least two months worth of mortgage payments in reserve to cover emergencies as well.
FOR MORE INFORMATION: Call me at 615.509.7000 or visit my website at www.joshandersonrealestate.com
Many buyers get trapped in homes they can't afford because of expensive mortgages that may be Adjustable Rate(ARM), interest -only, or negative amortization.
As you may know, I am a real estate consultant with Keller Williams in Nashville, TN. I think There is a need to educate first-time home buyers because they can be victimized by predatory lenders.
Buying your first home can be a little scary because it's probably the biggest investment you've ever made, but if you are educated by your Realtor with information when you see a loan officer, you're not as likely to get into something that's not right for you or that you will not be able to afford down the road.
Here's some advice on what first-time buyers should do before purchasing a home:
Check your credit rating: The average credit score in the U.S. is 678. Beome familiar with what's on your credit report because you will use it for big purchases and many people are surprised when they see it for the first time. Your credit is affected in a lot of different ways as well.
Credit ratings are used by lenders to determine what interest rate to charge for a mortgage, but not all are accurate. Sometimes bad debts from one person are listed on the credit report of another person with the same or similar name, which can lower a credit score.
Besides mistakes, delinquent debts also can drag down credit ratings. Fix your credit as soon as you can because you get better rates for having a better score!
Pay off bills: Lenders consider all forms of debt when determining how much to lend for a home loan, so buyers can qualify for higher mortgage limits if they first pay off other loans. Never make a big purchase, such as buying a new car, when you are about to buy a home.
Mortgage lenders typically reduce home loan limits by $10,000 for every $50 a couple owes in minimum monthly payments for credit cards or car loans. Couples who owe $500 a month in credit and car payments, therefore, can have their mortgage limits slashed by $100,000.
Calculate what's affordable: Home shoppers routinely are advised to get prequalified for a mortgage so they know how expensive a home they can buy.
But just because a lender says they're qualified for a certain size loan doesn't mean buyers can afford the payments. Always try to get Pre-approved instead of Pre-qualified!
Lenders should look at debt-to-income ratios to determine what people actually can afford to pay every month. This should not exceed 28%.
I think home buyers should fill out a detailed monthly income and expense record.
Just because a mortgage broker says a couple qualifies for a $2,500-a-month loan payment doesn't mean they have that much to spare.
Most first-time buyers don't realize that in addition to paying for the principal and interest on their loan, they also will have to pay property taxes, mortgage insurance and probably more for water, sewer, electricity and gas than they did as a renter.
Be responsible and never buy more house than you really can afford. Just because you are approved for $250,000 does not mean you have to spend that amount. Stay within your means. Do the math. It's smart to figure out what payment you can live with comfortably.
Research loans: Many people think they're getting great loans, but a lot of times they are not. Many mortgages will stick you with hidden fees until yo uget to the closing table or some type of adjustable fee or penalty, so be careful to go with a reputable lender.
Some mortgages require buyers to pay 4 percent of the loan in advance in the form of "points," even when the buyers' credit scores qualified them for upfront payments half that high.
Many buyers also get confused when getting funding from a combination of mortgages, like a first loan that covers 80 percent of the debt and a second loan that covers the remaining 20 percent.
The second loan always has a higher interest rate than the first loan because it's more risky for the lender, but it gets you out of paying the PITI (principal, interest, taxes, and Insurance)
Two loans aren't always necessary. Buyers with a credit score of 680 or higher should be able to get 100 percent financing with one mortgage at a good rate.
I think borrowers should be wary of adjustable-rate loans and those that require interest-only payments.
Pick an agent: Not all real estate agents are equally talented or committed to helping first-time buyers. Some agents do not care or do not want to educate buyers, but this is very important at all stages, particularly for first time homebuyers! There is a learning curve with homebuying and you need to learn and know all the steps. Many first timers do not know what earnest money is and do not understand the purpose, but it is a consideration and it shows the seller that you are serious about buying their property. The higher the earnest money amount, the more serious you look. Typically, you offer 1% of the asking price, but if it is a hot market, you may want to offer more because there will be many offers on the table.
Shop for a home: Start with a condo if you have to and work your way up from there. This is not your forever and ever home, just a starter. You need to realize this is your first home. It is your foot in the door. After you build up equity, then you can move up.
Make deal contingent: Before signing any purchase contract buyers should make sure it lets them get their down payment back if something goes wrong.
These contingency clauses should include a requirement that the home pass an extensive home inspection as well as financing.
Shop around for a good home inspector and be present during the inspection. Your agent should have a list of inspectors, lenders, title companies and anything else you may need. Be present during the inspection if yo ucan and if not, have your agent present. Avoid using any inspector recommended by the seller or the seller's agent.
Buyers also should be able to get their down payment back if the appraised value of the house shows the sales price was too high.
Read everything: Loan documents and sales contracts typically are extensive and complicated. You must read your documents. If you don't understand everything, it's OK to get someone to explain it to you.
Compare what you were told would be in the documents -- interest rates and loan conditions -- with what's printed.
Ask question...do not be embarrassed. Buyers also should be wary of verbal promises that aren't included in the contracts. If it's not in writing, it doesn't exist!
Expect closing costs: Even if a 100 percent loan has been arranged, buyers typically must come up with some cash for required fees.
You should have at least 3 percent of your loan amount available to cover closing costs. Some mortgages will allow you to wrap it into your mortgage, but if you cannot afford the 3%, my opinion is that you should not be buying a house!
I recommend buyers have at least two months worth of mortgage payments in reserve to cover emergencies as well.
FOR MORE INFORMATION: Call me at 615.509.7000 or visit my website at www.joshandersonrealestate.com
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