buying – Desiree Estrada

Being a home buyer can be a stressful experience, especially if you don’t know what to expect. You want to ensure that you make informed decisions. But, doing so can be challenging when you aren’t even sure of what the right questions are to ask your mortgage lender.

How much money can I borrow to buy a home?

When determining how much you can borrow, lenders may consider your income level compared with debt, your employment status and your credit history. Talk to a lender about getting prequalified for a mortgage before you start shopping for your new home. This can make the whole experience go more smoothly.

2. How much money do I need to put down?

To get the best rate and terms for your loan, try to put down at least 20 percent of the purchase price. Although a lower down payment won’t necessarily disqualify you, there is a chance that a monthly private mortgage insurance (PMI) payment will be added if your down payment is less than 20 percent. Your down payment will affect other variables as well, such as your interest rate, terms and monthly payments. Ask your lender for more information about the minimum down payment required for your loan and if you might be eligible for any down payment or cost-saving assistance programs, and decide what’s right for you.

3. What’s the interest rate?

Right off the bat, you should ask your lender for a direct interest rate quote, as well as the corresponding annual percentage rate (APR) for the loan. Since the APR accounts for fees and other loan-related charges, it gives you an apples-to-apples comparison among lenders. Don’t be afraid to shop around until you find one you’re comfortable with.

4. What’s the difference between a fixed rate and an adjustable rate?

A fixed-rate mortgage keeps the same interest rate for the life of the loan, typically a 15- or 30-year term. This keeps your monthly payment for principal and interest steady and predictable over time. Adjustable-rate mortgages, or ARMs, have interest rates that change based on the market, so your payment will go up and down. Most ARMs are based on a 30-year term and typically start with an initial fixed interest rate for a specific period of time, usually 5, 7 or 10 years. It’s important to compare these two types of mortgages to find what’s best for your situation.

5. How many points does that rate include?

A discount point is a fee paid to the lender at closing in exchange for a reduced interest rate. (1 point = 1% of your total mortgage amount.) Be sure to ask your lender how many points are included in the quoted interest rate and what the benefits might be to buying more or fewer points.

6. When can I lock my interest rate?

Interest rates always fluctuate. Sometimes, locking in a low rate can really pay off. Ask your lender when you can lock a particular rate and for how long. Keep in mind, lenders will usually offer lower interest rates for shorter-term locks and higher interest rates for longer-term locks.

7. What are my estimated closing costs?

Remember to factor in the various fees associated with buying a home—particularly closing costs. Closing costs include loan origination fees, appraisal fees and attorney fees (if any), to name a few. Your lender should provide you with a Loan Estimate showing the approximate costs of your loan so you can budget accordingly.

8. Are there any other costs or fees I should know about?

The more information you can collect up front, the more prepared you’ll be should you run into any unexpected expenses along the way. To help you understand the various fees you’ll need to cover, your lender should give you a Closing Disclosure detailing all the costs associated with your loan. It’s a good idea to compare the Closing Disclosure to the Loan Estimate.

9. Can you estimate when the closing will be?

A lot of factors help determine when your exact closing date will be—many of which are completely out of your control. Ask your lender for an estimate of when you might expect to close. That way you’ll at least have a rough idea of the timetable you’re working with.

10. Is there anything that could delay my closing?

Yes, buying a home is a complex process with many stages and requirements. While delays are normal, the best way to avoid them is to stay in touch with your lender and provide the most up-to-date documentation as quickly as you can.

Pre-qualification is neither pre-approval nor a commitment to lend; you must submit additional information for review and approval.

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Are you interested in buying a condo? If so, you’ve come to the right place. Buying a condo is somewhat like buying a single-family house, but there are some differences you should be aware of. There are many pros and some cons to buying a condo and it’s important to be fully aware of every angle before making a decision. So, if you or someone you know is looking to make a condo their new home, read on for much more information.

What is a Condo?

In simplistic terms, think of a condo as an apartment you own. In those instances, residents often share walls with their next-door neighbors. Condos have common areas like many apartment complexes, but with a condo, the common areas are jointly owned by other condo residents.

It should be noted that there are some condos that are detached units.

Are Condos Worth Buying?

Condos offer many buyers an opportunity to live in a location they might not otherwise be able to without sacrificing convenience or their preferred lifestyle in favor of homeownership. Owning a condo can be a viable alternative to renting an apartment, especially considering that as a condo owner, you can build equity and often take advantage of tax deductions on the mortgage interest.

Another unique feature of condo living is that most condos will have a governing board that oversees how the condominium community operates and is maintained. These associations manage the complex and handle any rules or guidelines for the community. They are also responsible for the upkeep of the common areas that are owned by all the residents of the building.

Pros of Buying a Condo

Equity

If you are partial to apartment living due to the amenities and the sense of community you can build, but you are also interested in building for your financial future, condo life may be the right choice for you. When you buy a condo, you can build equity. Home equity is the financial portion of the home the owner truly owns. Equity can increase over time as you pay down your mortgage. Equity can also increase if the property value rises. Then, if you decide to sell the condo, you can use the equity you’ve built to help you buy your new home.

2. Affordability

Condos tend to be less expensive than their single-family house counterparts, and they can provide homeownership opportunities for more buyers.

3. Location

Many condos are built in popular, high-demand areas and downtowns, so if you want to be in the heart of a city or within walking distance to many different amenities, a condo might be a good option.

4. Security

Many condos offer security features such as a call box, doorman, or guard service. Living among a group of neighbors also provides a sense of security when you are away from your condo.

5. Improvements

Unlike an apartment, if you own a condo, it’s yours. You can make home improvements you like to your unit. Want to redo the kitchen or a bathroom? You can do it. Want to paint a bedroom? You can do it. You aren’t beholden to whether the apartment management company wants to make improvements or not.

6. Maintenance

If you’re not inclined to do yard work or handy with tools, a condo may be for you. Many condo complexes hire professionals to maintain the exterior and the common areas.

7. Amenities

As a condo owner, you are co-owner of any common areas that the condo building has to offer. Many buildings offer tennis courts, swimming pools, a gym, a theater room, and other amenities that you might not be able to afford on your own.

Possible Cons

No Land Ownership

When you buy a condo, you won’t own the land beneath it. Instead, you share an interest in it with the other condominium residents. When you buy a house, you are also buying the land the house sits on. Depending on your preference, this might mean spending less over time on home maintenance.

2. Fees

The common areas of a condo building are certainly nice, but it costs money to maintain them. As a condominium resident, you will likely be required to pay a monthly fee that goes towards the maintenance and repair of the common areas. There may also be an additional fee tacked on for any larger repairs and renovations to those areas as well, but you will also get to enjoy these amenity upgrades.

3. Community Association Rules

Since you’ll be living in a community with a community board or association that helps to govern it, you will have to abide by the rules of the condo. Rules may include whether you can have pets, what types of pets you may have, how and when the shared facilities may be used, and rules about visitors or guests among others. You may also elect to participate in your community board or association.

4. Parking

Depending on the location, a condo may come with limited (if any) parking options. Some condos only allow one assigned parking space per unit, which could be an issue if your family has more than one car.

5. Storage

Given that condos are typically smaller than houses, you will likely have much less space for storing items in a condo compared to a house. Some condo units come with a designated storage space, but those spaces may be small and not able to hold larger items.

Condo Loans

When it comes to buying a condo, you should be aware that there are some differences between condos and single-family houses when it comes to the mortgage process.

Compared to a loan for a single-family house, a condo loan may have a few additional considerations. If you’re ready to buy a condo, be sure to work with a dedicated team for condo approvals.

DESIREE ESTRADA

REALTOR®
c: 323.543.1881
e: desiree@revelrealestate.com
o: 9320 Wilshire Blvd. Suite 100-A Beverly Hills, CA 90212

BUYING | SELLING | CONTACT ME

Tag: buying

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