Monthly Archives: June 2014

//June
27 06, 2014

Home Appraisal vs. Home Inspection: What’s the difference?

June 27th, 2014|Blog|

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May home buyers get confused about the difference between an appraisal and a home inspection. While they may seem like the same thing, appraisals and inspections serve two completely different purposes. A home inspection is optional, while an appraisal is required by the mortgage lender. An appraiser is more concerned with the value of the property, and a home inspector is more concerned with the condition of the property. Here is a closer look at the differences between an appraisal and a home inspection.

 

Home Appraisal

An appraisal is an evaluation of a property’s value based on its condition, features, and similar home sales in the area. Appraisals are conducted by trained, certified professionals who are licensed to determine the value of a home. Getting an appraisal is a standard part of the mortgage process. Before a mortgage lender will loan you money to buy a home, they want to get an idea of how much the property is worth. The following factors are typically considered during an appraisal:

 

Comparable Properties: Appraisers look at recent sales of similar homes in the area to help determine the market value of a home.  If homes with similar features in the same neighborhood are selling at a particular price, this will influence the assessed value of the home in question.

The Property: A home’s physical features such as the age of the home, its square footage, the number of bedroom and bathrooms, lot size, location, view etc., are all taken into consideration when an appraiser is determining the value of a home. Permanent structures on the property, such as an in-ground pool or sprinkler system also impact the value. However, movable structures like sheds and above ground pools are not included in the valuation.

The Structure: Appraisers […]

19 06, 2014

Mortgage 101: What is a Good Faith Estimate (GFE)?

June 19th, 2014|Blog, Mortgage 101|

gfe

A Good Faith Estimate (GFE) is an official document provided by a mortgage lender detailing the estimated costs associated with a loan.  After you apply for a loan, the lender is required to provide you with a GFE within three business days of the receipt of your application. The GFE can be a great tool to help you understand the cost of the loan, compare offers, and make an informed decision.

 

What a GFE tells you

A GFE lists basic information about the terms of the loan and an estimate of your settlement charges. A summary of your loan, including the initial loan amount, loan terms, initial monthly payment, and if your interest rate and loan balance can rise, is listed on the GFE.  If applicable, the GFE will also include Information about your escrow account. An escrow account is used to cover taxes and insurance. Also listed on the GFE is a summary of your settlement charges, which is the estimated amount you’ll need to pay at closing. Here’s a list of some of the settlement charges you’ll find on your GFE:

    • A fee for obtaining a credit report
    • A Loan origination fee – the amount the lender charges for processing loan paperwork
    • Legal fees
    • Charges for home inspections
    • Appraisal fee
    • Survey fee – the cost to verify property lines
    • Title insurance – this protects the lender if the title isn’t clean
    • Title search fee – the cost for a background check on the title to make sure there aren’t unpaid mortgages or tax liens on the property
    • An escrow deposit
    • A recording fee – The cost to record the transaction in the city or county’s records
    • Underwriting fee – covers the cost of evaluating the loan application

 

When it can and cannot change

Some of the costs on the GFE can change […]

13 06, 2014

5 Mortgage Mistakes to Avoid

June 13th, 2014|Blog|

mortgage-mistakes-to-avoid_421674Buying a home is likely one the biggest purchases you will ever make, and it can be both exciting and overwhelming. To make sure that the process goes as smoothly as possible and that you end up with the best mortgage option for your situation, here are five common mortgage mistakes you should avoid.

 

Mistake #1: Not checking your credit

You should know where your credit score stands before you start looking for a home or begin the mortgage process.  This is a common mortgage mistake that many homebuyers make, and it’s any easy one to avoid. Even if you think you have perfect credit, there may be issues or mistakes on your credit report that you are not aware of. A mistake on your credit report can seriously cost you in the long run. If there are mistakes on your report that make you look less appealing to lenders, it can prevent you from getting the best rate possible. This means you could be paying much more than you should on your mortgage each month.

 

Mistake #2: Not getting pre-approved

It’s important to get a mortgage pre-approval because it gives you a guideline on what you can spend and will reveal any problems that could prevent you from getting a loan.  Getting pre-approved before you start shopping for a home ensures that you can actually qualify for financing. You will have a clear understanding of how much home you can afford so you won’t waste your time looking at houses out of your price range. Being pre-approved also allows you to act quickly when you find the perfect home and can make your offer more appealing to the seller.

 

Mistake #3: Not sticking to your budget

We all want to move into a dream home, but […]

5 06, 2014

7 Common Mortgage Questions

June 5th, 2014|Blog|

Mortgage1. What can I afford?

An important first step in the home buying process is to determine how much house you are able to afford. Many people skip this step and start looking at homes before they have a true understanding of what they can actually afford. Use our calculator to estimate how much you can afford. To save time and prevent the potential heartbreak of falling in love with a house that’s out of your price range, you can also get pre-qualified or pre-approved before you start home shopping. Contact us to get started.

 

2. What’s the difference between pre-qualification & pre-approval?

Pre-Qualification
A mortgage pre-qualification is an estimate of how much the lender thinks you could be eligible to borrow based on your basic financial information. This can help you determine a price range for the homes you should be looking at, but pre-qualification does not guarantee you will get a loan. The lender is only showing you the loan amount that they believe you could be approved for if everything checks out.

 

Pre-Approval
A pre-approval gives you a more accurate estimate of how much house you can afford. You will need to complete an official mortgage application and provide the lender with more detailed information. The lender will look at your credit report and assess your current debt-to-income ratio to pre-approve you for a specific loan amount. Getting pre-approved also lets the seller and real estate agent know that you’re serious about buying a home.

 

3. What if my credit’s less than great?

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