BuyingOtherSelling April 29, 2022

Architectural Styles on the Horizon

Whether you’re buying, selling or staging a home, popular architectural styles and buzz-words can help you get the most out of your investment. Current and upcoming homebuyers have an “instant” mindset, are debt-savvy, and want all the luxuries of rural living in growing cities. Trending architectural styles, like shipping container and tiny homes, reflect the budget-friendliness and fast construction new homeowners want. Contemporary glass structures, modern farmhouse, and a Spanish-colonial revival make way for bigger homes and budgets.

Shipping Container
These days, building your own home is as easy as clicking around on a website or flipping through a catalog, mixing materials and adding desired features. The architecture that results is a Lego-like, innovative blend of textures and shapes that is “unique” to the homeowner’s preferences and taste. These styles are known as shipping container style homes. Some simulate the appearance of or incorporate actual shipping container material in their textures. By selecting from pre-fab, mix and match elements, homeowners can be sure that these features are ready-to-go. They can get exactly what they want without wasting time or resources.

Tiny Home

Tiny Home AFrame

Floor plans for both homes and apartments are getting smaller and smaller as the demand for land goes up and urban populations boom. Architects and builders are getting creative with their designs, finding new ways to make the most out of spaces as small as 300 square feet. This is “tiny home” size. These homes often sell at a lower price point than traditional-size homes, which makes the investment easier for modern homebuyers who are grappling with significant loan debt. These designs make the most out of every square inch with hidden storage, multi-use rooms and concepts like open space and indoor-outdoor living.

Santa Barbara

Santa Barbara Home 3927 Laguna Blanca Dr., Santa Barbara, CA listed by Linda Lorenzen with Coldwell Banker Residential Brokerage

One of the most desired builds, right now, is the Santa Barbara style of architecture. This involves white stucco walls, wood beam ceilings and red tile roofs. It gets its name from the Spanish Colonial style that boomed in Santa Barbara in the early 1900s. The city set the trend for the rest of the country and homeowners are finding that the aesthetics of this style are a top choice for their dream homes.

Modern Glass

Glass House with Water View 24450 Malibu Road, Malibu, CA listed by Chris Cortazzo with Coldwell Banker Residential Brokerage

Homeowners are knocking out walls and replacing them with glass doors and walls to see through to their back yards or patios. Incorporating the outdoors into indoor spaces is a top trend, right now. With the glass features, homeowners tend to blend sleek materials like concrete or wood. Modern glass style homes allow the outdoors to flow into the indoors and vice versa. This is a great trick to make the most of your property.

Updated Farmhouse

Modern Farmhouse 4576 Atwood Road Stone Ridge, NY listed by Cathy Pulichene with Coldwell Banker Village Green Realty

The farmhouse style has been a long-standing architectural icon. However, these days, the style is changing to incorporate more modern elements. The result is known as the modern farmhouse. In many builds, the design begins as a modern home outfitted with rural accents like barn doors and farmhouse siding. For builds that begin in the farmhouse style, modern colors and mixed industrial textures bring the old into the new.

If you are considering a new construction, an architect can help you to stay on top of the trends so that your home will be a success on the market well into the future. According to HomeAdvisor, the average cost to hire an architect is $5,000. They can guide you through the process to help maximize on your time and resources.

Buying April 29, 2022

Size Matters: Finding the Perfect Size Home

If you’re house shopping, there’s probably one question that’s been on your mind often: “What size home should I buy?” At a glance, the answer seems obvious: as big as you can afford! But that’s only a small piece of the puzzle. Home size matters on many levels from personal preference to resale value, future plans, your budget, and more.

How do you find the ideal home size for you and your family? Here are three things you need to consider:

The Truth About Square Footage
A foot is a foot, right? When it comes to the square footage of your future home that may not be the case. Measuring the size of a house isn’t incredibly precise. More often than not, the size will change depending on which appraiser is measuring and what mechanism they’re using to determine the square footage: measuring tape, laser measure, or eyeball. The reality is that there are no universal standards when it comes to measuring your home size.

What does this mean for you? You need to choose your home size not by the numbers but by the feel. Don’t put too much stock in the listing size on paper, but instead find out in person if each room, bathroom, and living area is large enough for your needs. It’s not about how other individuals answer the question, “What is a good sized house?” It’s about you, your family, and how big a place feels in person.

Penny Budget Jar

Your Budget
While your budget isn’t the only thing you should consider, it needs to be one of the critical factors in determining your ideal home size. And that may be little more complicated than you think. What matters when it comes to your budget?

Loan Size: The larger the house, the more expensive—most of the time. Make sure the average house size of your real estate listings fits with your pre-approved loan budget.
Monthly Budget: Large houses are expensive to keep up. As you increase your square footage expect to pay more in electricity, water, gas, cleaning, and more. If you have a tight allocation for monthly expenses, don’t go overboard on a large house without factoring in these other costs.
Your Future: Are you planning to have more kids? Do you need a new car? Are you counting on getting a raise at work? If you’re expecting your financial situation to change, make sure your home budget fits the modifications.
Your Preferences and Needs
Your particular wants and needs should have the most significant impact on the home you choose. Make sure you’re truthful and honest with yourself about your expectations and needs. For example, if you eat out regularly and hate cooking, there’s no need to spend on a gourmet kitchen! You’d be better served looking for a home with a smaller kitchen and a bigger living room.

To help you determine your preferences, here are ten questions you should ask yourself:

Do you like small and cozy or do you need room to spread out?
How many people are in your family and how much space does each person need?
Do you have any hobbies or jobs that require extra space? (If you work from home, you’ll need an office. If cars are a passion, you’ll want a more substantial garage)
How often do you have visitors over? (If you have parties every few weeks and relatives visit a few times a year, you might want more space for guests)
Are you planning to have more kids or have an elderly relative move in with you?
What size of house have you been excited about in the past?
How much storage do you need? (Closet space and built-ins can be a big space saver)
How large is your furniture, and how much do you have? (If you have a king-sized bed, you want a big master bedroom)
What’s your five-year plan? (Upgrading your home to a larger size can be difficult; make sure the home you choose can last for years)
How much outdoor space do I want?

The key to purchasing the right-sized home for you is being realistic. Make sure you really sit down with your family to discuss what you need, want, and can afford. Then, ask Cori Hamilton to help you search for the perfect sized house for you.

Buying April 29, 2022

Why You Should Get A Property Survey Before Buying

When buying a home, the last thing you want is a surprise. Most people worry about leaky roofs or rusty boilers. But there may be property issues that can come to light and cost you a lot of money if you’re not careful.

One way to avoid getting in over your head is to get a property survey before you buy. Also known as a house or land survey, it’s the perfect way to ensure you know exactly what you’re getting with the land, so there are no surprises.

How exactly do you go about getting a property survey?

Property Survey Basics
A property survey begins with defining the boundaries of a plot of land. This clarifies the size of the property, and where the land begins and ends.

An updated house survey is also important for legal reasons. This is because municipal laws are not fixed—they change from time to time. For example, the property might have a shed or a fence that was well within the boundaries years ago but after undated municipal border it now encroaches onto a neighbor’s property or too close to the public street. A new survey will give you the confidence that the property complies with current local regulations.

It can also highlight any potential discrepancies or boundary infringements. This can help you avoid any misunderstandings in the future with neighbors or the city.

What do Surveyors Look for in a House Survey?
You might have seen surveyors poking around your neighborhood taking measurements. Most of the time, they have been hired by home buyers or sellers to take surveys, or they could be performing a survey for a property dispute (something a survey can help you avoid!)

When you hire a surveyor here’s what they typically look for:

The legal boundaries of the land
The locations of any buildings (sheds, storage) on the land
Any easements and entrances to the property
The topography of the plot, including both natural features such as trees or a river and manmade features including swimming pools or fences
An updated survey will be compared to any previous survey from the last time the house was sold. This way any discrepancies that might appear are known to all parties before the closing.

How Much Does a House Survey Cost?
When getting a property surveyed it’s important to hire a professional. This is one instance where DIY surveys or estimates won’t help. In fact, it can actually hurt you as they are not accepted as legal documentation.

So hiring a surveyor may be worth it to ensure you have records that hold up in court, if it ever comes to that. House survey costs can vary from state to state, but they typically run anywhere from $250 to $1,000.

Check your local state laws regarding costs. In some states, the seller is responsible for the survey or the fees can be negotiated between both parties.

Should I Have a Home Buyers Survey?
The last thing any homeowner wants is to plan a new project only to find out all that land they thought they had wasn’t theirs after all. You can imagine the headaches that scenario can cause!

Nevertheless, this sort of thing can sometimes happen. One way to avoid these issues is to set up a survey. A buyer’s survey can save you from a lot of potential hassles (and even more costs) down the road.

Real Estate April 29, 2022

Difference Between a Realtor & a Real Estate Agent

Are you working with a Realtor or a real estate agent? Often, people use the words interchangeably to refer to any individual who handles real estate transactions, but that’s not correct.

A real estate professional can be classified as a real estate agent, realtor, and/or broker.  The difference between these titles are the levels of education, experience, and affiliation. So, who are these individuals and what do they offer? Are all real estate agents realtors or is there more required to be one or the other? We’ve got the inside scoop.

Real Estate Agent

A real estate agent is a person who is licensed to represent buyers and sellers in a real estate transaction. The steps to becoming licensed vary by state but typically include a minimum number of instructional hours and the passing of a real estate licensing exam. Additionally, many real estate agents have also passed a state background check and have business insurance.

Agents are the most common real estate professionals that you’ll run across. All real estate brokers and realtors are real estate agents, but not all real estate agents are brokers or realtors.

Real Estate Broker

The differences between a real estate agent and broker have to do with education. A real estate broker has pursued a higher level of licensing after working in the industry for a set amount of time. In addition, to become a broker you should be verified by a principal broker and pass a broker exam specific to your state.

In the end, the most telling differences between a real estate agent and broker are their level of experience. A broker has at least worked in the industry buying and selling homes for a few years.

Realtor

The final title is that of a realtor. A real estate agent and a real estate broker can both be realtors. The key to being a realtor vs. a real estate agent is belonging to the National Association of Realtors (NAR). Only members of this association can be identified as a realtor.

What makes a realtor unique? members of the NAR have all taken a pledge to follow a set of ethics and guidelines that ensure their integrity. These codes of ethics carry weight for a realtor in their day-to-day business practices and cover a wide range of pledges:

Shall put the interests of buyers and sellers ahead of their own.
Shall cooperate with other brokers and agents if it’s in the best interest of the client.
Shall refuse fees from more than one party without consent.
Shall not discriminate in any fashion.
Shall always present the truth in advertising.
All in all, the REALTOR® Code of Ethics offers a very specific outline for how an agent or broker should think, act, and perform their duties. This is not to say that the main broker and realtor difference is the type of individual—an ethical or non-ethical person. A broker can follow these same ethics guidelines without being a member of the National Association of Realtors. However, being a member of the NAR does offer a course of action if you have a complaint; you can contact your local board of realtors.

Choosing Your Real Estate Professional

So, how do you choose the right real estate professional for you? The right individual will be different for every transaction, homebuyer, and seller. You need to decide if having a few extra years of experience and education or adherence to a specific code of ethics makes you feel more comfortable hiring one person over another.

No matter whom you decide, we recommend carefully vetting all your candidates and reviewing their qualifications before making your choice. A realtor isn’t necessarily better than a broker, and an agent isn’t necessarily less experienced than a broker. It all depends on their qualifications. Vet wisely.

Home Improvement April 29, 2022

3 Simple DIY Projects to Tackle this Summer

Summer is here and it’s the perfect time to enjoy the great outdoors, even if just in your own backyard.

Does your yard or patio need a little sprucing up? Perhaps you’re dreaming of hosting a summer party but your outdoor space isn’t quite guest-ready.

Don’t worry, we’ve got some simple and affordable DIY projects that might help you inject a little curb appeal and make your home the place to be this summer.

Freshen Things Up with a Coat of Paint

Knoxville is a great place to live because of each distinct season, but those seasons can also wreak havoc on outdoor furniture. One of our favorite DIY projects to freshen up patio furniture involves simple spray paint.

You will want to thoroughly clean your furniture first to remove any dust or debris. If older layers of paint are chipping off, a wire brush might come in handy to smooth the surfaces. Anytime you are removing old layers of paint, take precaution by wearing a dust mask (available at your local hardware store).

This is one of those DIY projects that allows you to get really creative and let your style shine through. There are so many shades and textures of spray paint to select from, with options for painting nearly every type of surface.

Bright cheerful colors are sure to pop on your summer patio while peaceful neutrals and trendy metallics can create a more lush, sophisticated result.

Create a Multi-Purpose Container Herb Garden

Another great way to add some life to your backyard or patio space is by planting a container herb garden. Not only are they fairly easy to create, but container herb gardens are also one of those DIY projects that serve many purposes.

First, fresh herbs add lots of flavor to your cooking, which will come in handy as you plan a menu for your next summer party.

Next, you can choose colorful containers or pots that complement your patio style for lots of visual impact.

Finally, certain herbs are known to repel insects, including those pesky mosquitoes that love to crash outdoor gatherings. Basil, lavender, and mint are three great multipurpose herbs to grow.

Assemble a Portable Summer Party Kit

One great way to make sure you are ready for every possible impromptu summer gathering is by assembling a summer party kit.

Your DIY party kit might include things like disposable plates, cups, and napkins as well as fun decorative items such as a piñata or strings of colorful lights. You could also include sunscreen or battery-powered, handheld misting fans for your guests. And don’t forget skewers for roasting hot dogs or marshmallows for s’mores.

An old wooden crate or a plastic bin makes a great container for your party kit. This is one of those DIY projects that requires a little work on the front end but makes things much easier later on. Having all your essential party supplies gathered together will make organizing your next outdoor summer party easier and less stressful.

These are just a few simple DIY projects you might want to tackle this summer around your home in Knoxville. Get your outdoor space or patio ready and your next impromptu party will sure to be memorable for your guests!

Home Improvement October 15, 2020

Green Remodeling Projects With Aesthetic Appeal

Let’s face it: some remodeling projects are a lot more fun than others. Rearranging the living room? Count me in! But blowing in insulation in the attic? Meh, I’ll pass. And unfortunately, the home projects that have the most environmental impact usually don’t exactly let you bust out the Pinterest boards and interior design magazines. There’s nothing exciting about air sealing, after all.

But that doesn’t mean that there aren’t any green renovations with big design potential. Upcycled and reclaimed goods especially can add a certain editorial panache to your home—while diverting cast-off materials destined for landfills. Or you can go for a new lighting feature, landscaping design, or window treatment that will help you reduce your water and electricity use. Take a look at these five remodeling projects that are all super eco-friendly and pretty easy on the eyes, too!

Redo the Kitchen Countertops in Terrazzo
Every week, US residents throw away enough glass bottles and jars to fill a 1,350 square foot building. Terrazzo, a countertop material made from crushed glass suspended in concrete, helps give some of that glass a purpose—and it has a unique, glittery look, as well. The majority of terrazzo countertops come from post-consumer products, like wine bottles or car windshields. For an extra modern edge in your kitchen, go for sharp, clean lines and install a tiled backsplash in an unexpected pattern behind it for extra oomph.

Install a Solar Tube in Place of Recessed Can Lights in the Hallway
As experts have begun to study the effect that light has on our productivity, alertness, and overall well-being, they’ve noticed that interior lighting that more closely matches the intensity and hue of natural daylight consistently demonstrates the best responses from study participants. A solar tube is what it sounds like—a small, rounded tube cut into the ceiling that reflects natural light from the outdoors into your home’s interiors. Use them in place of recessed lights in a sunroom, hallway, or powder room, and enjoy the positive affect they have on your circadian rhythm—and the electric light they offset, as well!

Repaint Your Furniture with Homemade Milk Paint
Milk paint is exactly what it sounds like—an ancient surface covering mixed from lemon juice, color pigment, and of course, milk. Painted on furniture, it gives pieces an edgy, distressed feel. And it doesn’t contain harmful fumes, like VOCs, that can affect the air quality throughout your home. You can buy milk paint ready-made, or make it yourself using this recipe. Try it on an aging bureau, dresser, or on a side table that could use a lift—and pat yourself on the back for not adding to our landfill footprint!

Install a Solar Shade to Ward Off the Heat
If you live in a warm climate, you may already be aware of how excess solar radiation can affect your cooling bills. The sun raises the interior temperature of your home, meaning your AC has to work harder to keep things cool. And if you have old or outdated windows, the environmental toll may be even greater. While eco-friendly frames and glazings do exist, if you aren’t ready to spring for new windows for your whole home, you can at least protect your HVAC and furniture from solar heat by installing a solar shade over your most sun-prone areas. These green window treatments use specialized materials to block excess light and heat from entering your home. And they come in a variety of styles and colors as well!

Replant a Patch of Lawn with Native Grasses
Here’s one just for you, green thumbs! Every year, thirsty lawns pull billions upon billions of gallons off the water table. In fact, the EPA estimates that lawn irrigation accounts for 30 percent of residential water use—or 9 billion gallons per day. That’s a shocking statistic, and it means that our outdoor spaces could really use some help when it comes to cutting back on the sprinklers. Ornamental native grasses add an eclectic verve to your landscape design—and go well with other water efficient features, like hardscaping or manmade dry creek beds. What’s native will differ according to your area, of course, but reedgrass, oatgrass, and maiden grass are all popular choices—and grow without too much encouragement in many climates. They make the perfect accent next to a line of bushes or along pathways. After all, why shouldn’t green look good?

Home Improvement October 2, 2020

4 Tips to Making Your Home More Energy Efficient

If your resolution for 2019 includes cutting back on household expenses, making your home more energy efficient should be at the top of your list. You’ll find a wide range of products to help decrease your home’s energy consumption. Check out these four tips to make your home more energy efficient this year.

Go Solar

Harnessing the power of the sun is an easy way to incorporate energy efficiency into your home this year. Rooftop solar panels are becoming more popular and less expensive. Tax incentives can drastically reduce the cost of these systems.

Other solar powered options include outdoor lighting. You can choose a variety of lighting options that won’t consume any electricity. Solar powered flood lights, pathway lights, garden and porch lights are just a few of the many options available. Many of these lights are also motion censored, making them even more energy efficient. Consider installing a few of these around the outside of your home.

Auto-Renew Filters

The heating and cooling systems of your home are the primary source of energy consumption. Replacing older furnaces with newer energy efficient models is an excellent way to instantly cut down on energy costs. Can’t afford the newer options? Consider ordering your furnace filters online with an auto-renewal option. You’ll receive a new filter every few months making it easy to change. Doing so can help reduce energy costs as the heating and cooling systems won’t have to work as hard to force air through a clogged filter. Having the filters sent directly to your home also makes it more likely that you’ll replace them more often.

Plant Trees

If you live in the city of trees or an area with plenty of shade you may already be living more efficiently than you think. If not so much, an excellent way to add prolonged energy savings to your home is to plant shade trees in the yard. Not only do trees cut down on the amount of heat that hits your home, but they can also raise your home’s overall value. Trees help the environment by providing more air filtering qualities to the neighborhood. They also provide homes for pollinators and area wildlife. An Auburn University study concluded that your home’s energy costs will be reduced up to 11% by just having a mere 17% of your home shaded by a tree. Planting a few shade trees around your house today is a great investment that will make your home energy efficient for years to come.

Install A Tankless Water Heater

Many homeowners are choosing to ditch the large water heaters that can take up a good chunk of energy by continuously heating many gallons of water. A Tankless water heater only heats up the water that you immediately use. These smaller water heating systems cut down on the amount of space needed for heating water and cut down on the wasted energy of heating water that will need to be reheated later. Both gas and electric powered tankless heaters are available in these on-demand applications.

Any of these four tips will save you money and make your home more energy efficient in the new year. Upgrading to a tankless water heater and solar powered lights may cost you up front, but think of the savings you’ll see for years to come.

Home Improvement September 22, 2020

7 Easy Landscape Ideas for a New Home

You’ve closed on your new home, unpacked your belongings and breathed a sigh of relief. Now it’s time to look outside and turn your attention to the landscaping. If you’re lucky, you purchased a home that was once owned by a master gardener. However, most of us find our new yard needs a bit of work to make it our own. While some large-scale projects are more complex, there are some simple things you can do to personalize your outdoor living space. Check out these seven easy landscape ideas for a new home:

Plant Shade Trees

Trees are valuable to a landscape once they’ve matured. Older trees not only help shade your home and yard but also freshen the air. Trees also harbor neighborhood birds, which are important to the local environment. Planting a tree is a great way to mark the purchase of your new home and invest in the future. Make sure to plant a shade tree far enough away from the house so that it doesn’t interfere with the foundation or sewer system. You also want to avoid trees that will have you constantly raking and cleaning out the gutters. Consider planting evergreens on a breezy side of the yard to help block the wind.

Go Native

If you plan on adding any new plants to your landscaping, choose purple yarrow, coreopsis, red yucca shrubs or any of the native options that thrive naturally in Dallas. These are the plants that you may notice growing along the edge of a lake, beside roadways, and in untamed areas while on a hike. Native flowers need little water and will attract pollinators to your yard. They’ll also cut down on the amount of time you’ll have to spend maintaining your landscape.

Spread Some Mulch

Bringing in mulch to spread around the base of your landscaped plants is easy and will pay off in the long run. Organic mulch options, like bark dust, will provide beautiful color to the yard and keep plants hydrated. Inorganic mulch options, like stones or pebbles, will last longer but can be harder to spread due to their weight. Both options will help prevent weeds from popping up. Investing an afternoon spreading mulch can also save you a lot of maintenance time later on.

Make It Private

There will be areas of your yard that you will want to enjoy without the glances from neighbors walking by. Have fun with it and start some outdoor projects by planting a row of boxwoods for some semi-private areas or even hang some lattice on one side of the patio. Windscreens and vertical gardens are other ways that you can use the vertical space in the yard to add privacy. Adding a shade canopy or large umbrella can create a sense of privacy for homes with two-story neighbors.

Find A Favorite Spot

Outdoor seating is an integral part of landscaping a backyard. You can easily incorporate room amid plants and garden beds. Place a metal café table near your favorite rose bushes or even hang a hammock between two mature shade trees. Finding a spot in the yard that you can enjoy daily, while also being comfortable, will help you use your outdoor space more often.

Light it Up

A string of patio lights or outdoor solar lights will make the yard safer in the dark and allow you to use your yard well after dark. Go a step further and add a fire pit to the patio (either a permanent or less expensive portable one). The extra light will add a certain ambiance to your yard and encourage your family to get outdoors more often.

Add Some Stepping Stones

Many backyards have gates or side entry points that allow you to enter the yard without going through the house. These areas are often forgotten and usually, don’t include any kind of walkway or path. Consider adding stepping stones from the gate to the back patio to help encourage the use of the pathway without bringing dirt into your new home. Installing just a few stones will also help keep shoes out of the mud and provide a stable area that’s safe to use.

Updating your landscaping will help you increase the usable square footage of your home. You’ll now have more areas to relax and entertain guests.

BuyingFinancing September 15, 2020

Can You Buy a House with No Down Payment?

One of the most important financial investments you’ll ever make is the purchase of a home. There will be long-term impact on your credit and finances, so the decision has to be a sound one. Add to this the fact that most traditional mortgages require a 20% down payment, and the situation can bring anyone anxiety. Many people meet some aspects of the lending criteria, but lack the down payment. Are there any options to get into a house without shelling out 20% of the asking price up front? Read on to find out.

VA Loan

Obtaining a VA loan is one of the most popular ways for potential homeowners to purchase a home without a down payment. Qualified veterans and service members on active-duty as well as some members of the National Guard and Reserves may qualify to obtain a mortgage with no down payment. These loans are backed by the Department of Veterans Affairs, and charge the borrower a funding fee. Those in the military or veterans buying a home for the first time with no down payment pay a funding fee of 2.15%; the fee goes up to 2.4% for qualifiers in the National Guard or Reserves.

Navy Federal Loan

Another military related organization, the Navy Federal Credit Union, will provide 100% financing to qualified members. Potential borrowers include members of the military, certain civilian military and Department of Defense employees and their family members. The 1.75% funding fee for Navy Federal is lower than the fees charged by the VA.

USDA Loan

The Department of Agriculture, another government organization, offers loans for potential home buyers hoping to avoid a down payment. Despite what it may seem, this program is not only for rural properties and farms. See where the closest loan approval office is on the USDA website. USDA loan requirements are for first-time home-buyers only and include some household income restrictions and decent borrower credit.

Credit Union Loan

Some credit unions offer no down payment financing to those who meet other loan criteria. Potential home owners should check with their individual credit union for no- or low-down payment financing options.

FHA Loan

The Federal Housing Administration has offered home loans for those with less-than-perfect credit since 1934. Although they don’t make loans with no down payment, they require only a 3.5% down payment, which is more manageable for first-time home buyers and those with credit issues compared to the usual 20%.

Consider the Alternative

Before you go with one of the above options, consider this: there are benefits to putting down as much money as possible up-front when obtaining a home loan. Your monthly mortgage payment will be lower, and if you take out mortgage insurance, the more money you put down up front, the sooner your mortgage insurance payments will terminate.

One thing to keep in mind while seeking a no-money-down loan to buy a house is private mortgage insurance. When the down payment is less than the standard 20% of a home’s purchase price, private mortgage insurance kicks in to protect the lender in the event of default. Once a certain re-payment level has been reached, it will likely terminate, but this insurance can significantly increase monthly mortgage payments in the meantime. If you’re heading down the no-down-payment route, ensure whether the private mortgage insurance payments are factored into your monthly payments.

There are many paths to home ownership, and some don’t require a down payment. These are especially attractive to first-time home buyers and those with poor credit. As you research these options, be sure to secure the best loan rate for your situation, factoring in private mortgage insurance if it applies to your purchase. Be sure to establish a good working relationship with your real estate agent and representatives from lending institutions who will guide you toward sound financial decisions as you navigate the process of buying a new home.

BuyingFinancing September 4, 2020

Types of Home Buying Loans

Thinking about purchasing a home? One of the decisions you’ll need to make is whether you want a fixed-rate or adjustable-rate loan. Depending on the price of the home you’re looking for, you may need a jumbo loan.

First, let’s define these terms so you have a better understanding of your options.

Fixed-Rate Loan
A fixed-rate loan is a type of mortgage loan in which the interest rate does not change during the term of the loan. This holds true regardless of the duration of the loan, which could be 15 years, 30 years, or any other term length that the lender offers.

Adjustable-Rate Loan
An adjustable-rate mortgage, or ARM, is a loan in which the interest change may change from time to time, based on market conditions. If the benchmark interest rate declines, your interest rate could also drop, meaning you could enjoy lower payments. However, if the benchmark interest rate rises, the interest rate on an ARM will also rise.

Jumbo-Mortgage
While “fixed” and “adjustable” refer to the interest rates on a mortgage, “jumbo” refers to the amount that’s being borrowed. A jumbo mortgage is a loan for an amount that’s outside of federally-determined conforming loan limits.

The Details of a Fixed-Rate Loan
Your mortgage consists of four parts: principal, interest, property taxes and homeowner’s insurance. If you hold a fixed-rate loan, the principal and interest portion of your mortgage will remain locked for the entire duration of that loan. The property taxes and insurance, however, are outside of the lender’s control. Those may (and likely will) change over time.

Can market crashes or the federal funds rate change my loan?
If you hold a fixed-rate loan, changes to the federal funds rate (the rate at which the federal government loans money to institutions) will not affect your loan. Likewise, major economic changes like market crashes or rampant inflation also will not affect your loan’s interest rate. Your interest rate is “fixed,” regardless of what happens in the overall broader economy.

What if my credit score drops, or I lose my job?
As long as you remain current on your mortgage payments (meaning that you make on-time payments in full), your future creditworthiness, income, and debt-to-income ratios will have no impact on your mortgage.

What if I refinance?
Refinancing a loan means that you “close” the current loan and open a new one. This means that the terms and conditions of your current loan will end.

The Details of an Adjustable-Rate Loan
ARM rates are determined by two factors – the benchmark that it tracks, plus an additional margin added by the lender. Common benchmarks include the London Interbank Offered Rate (LIBOR) and the Cost of Funds Index (COFI).

Are there limits to how much – and how often – this changes?
Yes. ARMs are issued by locking the number of months or years in which you’ll pay the initial interest rate. This could be as short as one or two months, or as long as five or more years.

What is an adjustment period?
The interest rate on an ARM can only be raised after specific predetermined amounts of time. This is known as the adjustment period and can range from a few months to many years.

What’s the periodic adjustment cap?
Each rate hike will be “capped” at a specific threshold. This is called the periodic adjustment cap. Furthermore, the maximum interest rate that the ARM could ever charge is also limited. This is known as the lifetime cap.

The Details of a Jumbo Mortgage
A jumbo mortgage is a loan for an amount that’s outside of federally-determined conforming loan limits.

These are determined based on the county in which the property is located. In most countries in the U.S., a jumbo mortgage is any loan above $417,000. In more than 100 of the nation’s highest-priced countries, including many counties around L.A., San Francisco and New York, a jumbo loan is an amount over $625,500. There are also more than 100 other counties that have loan limits priced in-between those two.

Jumbo loans typically require higher down payments and stronger creditworthiness standards. Many jumbo loans require two appraisals, rather than only one.

A jumbo loan refers only to the borrowed amount – not the repayment terms. Fixed-rate and adjustable-rate mortgage refer to the repayment terms – specifically with regard to interest rate changes or lack thereof.

Which Loan Should I Choose?
Learn about all your lending options by talking to your real estate agent, mortgage banker and financial advisor. Take a careful look at your budget and goals. Then make a careful decision, weighing all the available options