When applying for a mortgage, one-and-done is not your best approach. You stand to save money if you shop around for the best loan for you, and this means you should know how to decipher the documents that come your way.
A mortgage loan estimate is a three-page form you receive after applying for a mortgage. A lender must provide you with a mortgage loan estimate within three business days of receiving your application — however, be aware that they have not yet approved or denied your loan application.
The form shows you what terms the lender expects to offer if you move forward. If you do move forward with your mortgage application, the lender will ask you for additional financial information. The document includes the estimated interest rate, monthly payment, and total closing costs, as well as information about the estimated costs of taxes and insurance.
It will also indicate whether the loan includes things like a prepayment penalty (for paying the loan off early) or whether the balance could increase even if payments are made on time (negative amortization).
Here are some components to which you should pay close attention:
* Check loan term, purpose, product, and loan type: Located near the top of the form, this information spells out the number of years (term), the purpose of the loan (i.e. purchase), product (such as fixed or variable rate), and loan type (i.e. Conventional, FHA, VA).
* Rate lock. Check whether the rate is locked or whether it can change between now and your closing.
* Prepayment penalty. Note whether the loan includes a penalty for paying it off early. This can cost you thousands.
* Balloon payment. A balloon payment is often considered risky. It’s a large one-time payment made at the end of the loan term. This type of loan usually includes lower payments during the life of the loan, but you need to be financially prepared to make that large payment at the end.
* Estimated monthly payment and estimated taxes, insurance, and assessments. Make sure everything adds up to a number you can pay. Sometimes taxes, insurance, and assessments are held in escrow for you. If not, make sure you have a plan to pay these bills when they arise, because they can be large lump-sum amounts.
* Estimated cash to close. This is cash you’ll need on hand at closing.
Features to ignore when house hunting
If you’re perusing listings online or visiting a property in person, there are a lot of red flags to watch out for. However, there are also several features that shouldn’t affect your decision to make an offer on a home.
Paint colors and wallpaper
Painting a home is easy and affordable, even if you need to remove a bit of wallpaper first. In fact, you shouldn’t let any of the seller’s questionable decor choices distract you from seeing the potential of each room.
Carpets and popcorn ceilings
With so many attractive low-cost flooring options, there’s no need to be dissuaded by ugly carpets. Similarly, an expert can take out a popcorn ceiling in no time. For the sake of convenience, just be sure to have both removed before you move in.
Privacy and curb appeal
Don’t be discouraged if you’re not wowed when you first see a property. Landscaping the yard and repainting the front door can make a big difference. And you can always add hedges as fencing for more privacy.
Finally, don’t judge a home by its age. In many cases, an older property will have higher quality materials — not to mention more charm and character — than a new build.
ASK THE EXPERT: We are wondering — is it possible to refinance our home and take money out of it?
We really need to replace the flooring and we think this could be the way.
It’s absolutely possible and this kind of loan is called cash-out refinance. Many people are doing just that.
In the second quarter of 2021, U.S. homeowners withdrew $63 billion in equity from their homes in more than 1.1 million cash-out refinances the largest quarterly volume since mid-2007.
A cash-out refinance lets you take some of your equity out of your home and get a new mortgage. Right now, if you’ve had your mortgage for a while, you might also be able to get a lower interest rate, although cash-out rates are usually slightly higher than traditional mortgages.
Whether your lender will do a cash-out refinances depends on your credit profile and how much you want to take out. It is possible to take out up to 80 percent of your home equity.
Suppose your home is worth $350,000. Your current mortgage balance is $250,000. If you need $30,000, you can refinance your loan for $280,000 and take the $30,000.
The funds you take out can be used for any purpose but most people spend the money on something that will improve their home or consolidate higher-interest debt.
To do a cash-out refinance, you must:
– Have more than 20 percent equity in your home.
– Get a new home appraisal to verify the home value.
– Credit score of at least 620.
– Loan-to-Value Score of 80 percent or less.
– Verification of income and employment.
With FHA and VA loans, the credit score or Loan-to-Value requirements might be slightly different.
2021 was a record-breaking year for Virginia’s housing market
According to the December 2021 Homes Sales Report released by Virginia REALTORS®, the commonwealth’s competitive housing market broke numerous records in 2021.
Last year, there were 154,340 home sales statewide, a surge of 10.2% over 2020. Nearly every local market across Virginia had more home sales in 2021 than the previous year.
Much of Virginia saw rapid price gains. The commonwealth’s annual median sales price was $350,000, a $30,000 jump from 2020, which is a 9.4% increase. This is the largest annual price gain the state has had in years. This strong price growth was fueled by historically low mortgage interest rates, record sales activity, and the tight inventory of homes available.
The inventory shortage continues to be a major challenge in Virginia. There were just 13,469 active listings throughout the state at the end of December, a 24.2% drop from a year ago, which is nearly 4,300 fewer listings. “Virginia’s housing market is very strong. The biggest challenge in the market is a lack of inventory. Sales are slowing down a bit because buyers are having a hard time finding homes to consider,” says Virginia REALTORS® 2022 President Denise Ramey.
Driven by climbing prices and strong demand, Virginia’s sold dollar volume also swelled to record levels in 2021. There was about $66.8 billion of total sold volume in 2021, more than a 22% increase from 2020—an increase of about $12.1 billion through the course of the entire year.
2021’s strong demand for homes led to a major decrease in the number of days homes remained on the market. Statewide, the average days on market for 2021 was just 25 days, more than two weeks faster (-16 days) than 2020’s average.
While these numbers are staggering, the majority of home sales activity took place early in the year. Starting in the fall, sales activity began to cool in many markets around Virginia. “At the end of 2021, home sales activity slowed compared to the very fast pace of last year at the same time. Nevertheless, demand remained very strong over the year,” says Virginia REALTORS® Chief Economist Lisa Sturtevant, PhD.
The Virginia Home Sales Report is published by Virginia REALTORS®. Click here to view the full December 2021 Home Sales Report.
What new and future parents should look for in a home
If you’re a new or expectant parent, buying a family home may be on your to-do list. While you can’t anticipate everything you’ll need in the coming years, here are some essential features to keep top of mind as you shop for your dream home.
• A home on a quiet street in close proximity to a playground. Ideally, the route to the park should have sidewalks the entire way.
• A mudroom with plenty of storage to keep jackets, dirty shoes, and other clutter from spilling into the main li¬ving space.
• Bedrooms on the same level. This is practical for nightly feedings and gives both you and your kids peace of mind.
• A bathtub, preferably one that’s easy for kids to access and has an extra hand-held shower head.
• Stairs that are easy to baby-proof. Avoid wide staircases that won’t fit a safety gate and railings with large gaps between the rungs.
• A powder room on the main floor. This is helpful for potty training so your child has quick and easy access to a toilet.
To ensure you find the right home for your family, work with a real estate agent who’s familiar with the area where you want to live.
Real estate and community news with Jen Avery, REALTOR
This year I would like to add community news to the Warren County Market Reports every month. We have several upcoming events to put on your calendar!
Front Royal Women’s Resource Center
- Women’s Wellness Workshop – February 5 from 9am to 1pm | Virtual
- Visit this link to register: frontroyalwomenswellness.com
- YOU MUST RSVP to receive the Zoom Link
- Presented by Front Royal Women’s Resource Center & The Phoenix Project
- Sponsored by Valley Health and Friends of Samuels Library.
- Virtual event jampacked with amazing presenters/workshops from 21st Century Investing to Movement, Creativity, Nutrition and so much more. Goodie bags with information, tools and of course goodies for the first 50 who sign up.
House of Hope
- Empty Bowl Supper
- date to be determined soon!
Humane Society of Warren County
- Polar Plunge – January 15 at 11am | 4H Center Lake
- Interested in sponsoring a plunger? Please help our local animal shelter care for all of our animals needing a forever home. Visit this site for all details: hswcevents.org/polar-plunge
Rotary Club of Warren County
- Ride With Rotary – April 5 starting around 9am with staggered start times | Rockland Park
- New fundraiser brought to you by the Rotary Club of Warren County. Beneficiaries for the ride are Reaching Out Now and Cars Changing Lives. 4 ride routes, all ages and all riding experience levels.
- Event link: https://fb.me/e/1ngbJweEg
- Registration will begin early February.
- Sponsorships are needed. Contact Ellen Aders for more information on sponsorship levels. Great way to get a little exposure for your company!
Logan Maiatico Foundation
- Alfredo Birthday Dinner Fundraiser – January 29 from 5:30-8:30 | Front Royal Volunteer Fire Hall
- The Logan Maiatico Foundation has been established to continue the legacy of Logan Maiatico, Logan was loved by all of his friends, family and community and was known for spreading love to everyone he interacted with.
- Enjoy alfredo birthday dinner, Logan’s favorite meal! Ten dollars per person paid at the door. All proceeds will go to the Logan Maiatico Foundation in memory of Logan. Interested in swag? Visit: thestitchesandbows.com/live-like-logan
- We See You, Warren County – sign up (free) online to join this “movement” to help bring our community together. Follow on Facebook! You are going to love it! #WeCUWC
Warren County Market Report for December 2021 with Jen Avery, REALTOR
Watch this video for a quick summary of Warren County real estate for December 2021. We are back in the green. Numbers have climbed during December. Charts demonstrate the changes in the market, so be sure to click play!
In general summary:
- New Listings are UP 17.8%.
- New Pending UP 1.9%.
- Closed sales are UP 12.9%
- Average Median Sold $333,450
- Average Days on Market 31
*If you would like a copy of this report emailed to you, please send request to email@example.com.
Resource: December 2021 Market Stats by ShowingTime
Bright MLS: Statistics calculated January 2022.
Jennifer Avery, REALTOR® “Your Happy Home Expert!”
BPOR, SRS, CNE, E-Pro Certified | Licensed in VA
firstname.lastname@example.org | 540-683-0790
CRUM REALTY, INC | 318 S Loudoun St, Winchester VA 22601 | 540-662-0400
4 expenses homeowners pay that renters don’t
Do you want to become a homeowner? While there are many benefits to owning property, there are also numerous costs. In addition to the price of the home, here are just some of the expenses you’ll need to factor into your budget.
1. Property taxes
If you own a house or condominium, you’re responsible for paying taxes to your local government to fund services such as garbage collection, road maintenance, policing, and more.
2. Homeowner’s insurance
Although tenants typically pay for renter’s insurance, it’s important to be aware that homeowner’s insurance is a lot more expensive. This is largely due to the fact that if you own the property, you need to insure the actual structure of the home, not just its contents.
3. Mortgage interest
This is an expense you’ll have to pay for the duration of your mortgage. The amount required will depend on the time over which your mortgage is amortized, the frequency of your payments, and the rate and type of interest.
4. Maintenance and repairs
Gone are the days of simply calling the landlord if an appliance stops working or there’s no hot water. From simple electrical repairs to replacing the roof or flood-proofing the basement, all home maintenance tasks are the homeowner’s responsibility.
Before you decide to buy a home, it’s a good idea to consult a financial adviser to ensure you’re making the right choice based on your needs and circumstances.