Collins & Demac Real Estate

Posted by Collins & Demac Real Estate on 7/30/2015

When buying a home and shopping for a mortgage there are lots of new and unknown terms and one of those is often PMI. What is PMI? PMI stands for private mortgage insurance and chances are if you are first-time buyer you will have to pay it. First things first, PMI is for the lender, not for you. Typically, homebuyers who put down less than 20 percent on their homes are required to pay private mortgage insurance. PMI protects the lender in the event that you default on the loan. Mortgage insurance requirements vary by loan type and are not inevitable. Different loan types will have different mortgage insurance requirements. You will want to shop around because some loans have no PMI requirements at all. If your loan has PMI some lenders may offer something called “lender paid mortgage insurance” in exchange for a slightly higher interest rate. Here are some typical loans and the PMI requirements: FHA loans: Require mortgage insurance to be paid up front and monthly if equity in the home is less than 20 percent. VA loans: Do not require mortgage insurance. USDA loans: Do not require mortgage insurance. Conventional loans: Require mortgage insurance if equity is less than 20 percent. If you have to pay mortgage insurance you are not stuck with it forever. Once you reach an equity position of 20 percent or more you will be able to stop making mortgage insurance payments.  When you reach this position notify your lender, who will send you information on what is required for your specific loan program to get rid of mortgage insurance payments.

Posted by Collins & Demac Real Estate on 6/4/2015

When it comes to figuring out mortgages many people use the phrase, "it's all Greek to me" but figuring out how mortgages work is actually quite simple. First, a mortgage is a loan from a lender to a borrower to buy a piece of real property (a fancy way to say house, land, etc). The interest on the mortgage is the percentage of money the borrower agrees to pay the lender each year, in return for lending the money. Here is where it gets complicated, the lender wants to loan to be affordable for the borrower so they spread the interest out over time. This is called amortization. Amortization is the amount of money that goes toward principal (the amount of the loan) and interest. This amount changes over time because the interest owed is spread over time. There is a booklet put out by the U.S. Department of Housing and Urban Development that explains the mortgage and interest process. You can find the booklet here. Now often your payment is more than just the principal and interest. A monthly mortgage payment is often called a PITI payment. No, not pity even though you might need pity when looking at your loan statement. PITI stands for:

Principal -- the loan balance Interest -- interest owed on that balance Real estate Taxes -- taxes assessed by different government agencies to pay for school construction, fire department service, etc.
Property Insurance -- insurance coverage against theft, fire, hurricanes and other disasters
There may also be other fees depending on the kind of mortgage you have. Your monthly payment may also include private mortgage insurance (PMI). Remember there is a lot to know about mortgages beyond the rate so be sure to talk to a mortgage professional to make sure you fully understand your payment options.

Categories: Buying a Home  

Posted by Collins & Demac Real Estate on 5/21/2015

Housing prices are low, rates are low but how can you buy a house when your funds are also low?  How can you save money for a house while prices and rates are still good? Saving for a home can be different than just saving because you have save such a large amount of money and you don't know exactly how much you'll need.  Here are some strategies on how to save up: 1. Start with small goals. Try saving for closing costs or another smaller amount and then add another goal. Break the down payment into 3%, 5%, 10%, and 20% levels, to help make the savings goal more achievable. 2. Try saving a specific amount of money every month. Instead of saying I want to save $6,000 a year it is easier to say I will save $500 a month. Smaller, more achievable milestones are always good motivators to savings. 3. Ask for help. If people ask what to give you a gift for your wedding, birthday etc. ask them to contribute to your home savings plan. Online sites like SmartyPig make it easy to get other people involved in your savings goals. 4. Create a visual goal graphic. Create a vision board or some kind of graphic that represents what you are saving for. It always helps to see what you are saving for and have a constant reminder. Hopefully, you'll be on your way to a new home in no time.

Posted by Collins & Demac Real Estate on 4/9/2015

More and more millennials are getting into the housing market. A survey by homebuilder PulteGroup found that 65% of those who make more than $50,000 a year reported increased interest in buying a home. The recession has forced Generation Y, roughly those age 18 to 34, to delay buying homes. Now millennials are now entering their thirties and the cost of buying a home is now becoming a reality. While student loans and financial resources are keeping some younger people from the housing market many others are realizing that in many cases owning a home is cheaper than renting. The survey also reported that millennials know what they want in a home: 84% listed storage as a priority was ample storage                 76% want space for TV and movie watching                                                                           69% desire an open living/room kitchen layout                                                                             63% look for outdoor living or a deck                                                                                               36% cited the ability to work at home Other recent studies have affirmed the PulteGroup study and have shown that 90% of millennials plan to buy a home someday keeping the dream of homeownership alive.                                                    

Posted by Collins & Demac Real Estate on 4/2/2015

What will the home of the future be like? You may remember the cartoon, The Jetsons and their futuristic home. George and Jane and had every convenience a homeowner could want. What is in store for the homes of the future? Only time will tell but here are a few ideas that we will be seeing in the very near future: Homes may become smaller. A recent survey of home builders revealed they are building smaller homes. Today the average new home has topped out at approximately 2,400 square feet but builders say to expect new single-family homes to check in at an average of 2,150 square feet by about 2015. There will no more formal rooms like living rooms and dining rooms. The same study said 52 percent of builders plan to build homes with larger great rooms or spaces that combine the family room, living room and kitchen. Buyers and builders are also looking to go green. Expect to see more energy-efficient windows and compact fluorescent and LED lighting, as well as water-efficient appliances and plumbing in newer homes. If you would like to read to full study you can find it here. What would you like to see in your future home?