Having to make monthly mortgage payments can be very stressful for anyone buying condos or other homes. Worrying about a $200,000 debt, especially if you are just scraping by, can be a problem.
But there are ways to pay off your debt quickly and save on interest without really paying any more than you do now. Splitting the regularly monthly mortgage payments in half and paying that amount bi-weekly, or every two weeks is one option.
With 52 weeks in the year, that means you are making 26 half-payments, or 13 full mortgage payments instead of the usual 12. This way, you can pay off a 30-year mortgage in as little as 26 years. On a typical 30-year mortgage with a 5 percent interest rate, you can save tens of thousands of dollars.
Some lenders allow you to build this option into your mortgage payments, but be careful because there are often additional fees involved. With your monthly condo assessments and other costs, this is the last thing you want. These extra fees cab ve avoided by doing it yourself. Lenders don’t have a problem processing two payments per month, as long as the full payment is received by the due date.
Adding a bit more to your monthly mortgage payment is another way to save money in the end. You can do this simply by rounding up, so instead of paying $927 per month, make it an even $1,000 whenever you can afford to do so Every little bit taken off the principal helps, and it is something to consider when financing condos.
This is the second in a series of blogs regarding the purchase of real estate and is taken from the seller’s perspective. Real estate transactions are a complicated process and the need for a professional real estate agent is crucial to complete the transaction so all parties involved are satisfied with the outcome. Traditionally sellers are always represented by both real estate agents in a transaction. Obviously, the listing agent who has a signed legal document with all the responsibilities lined out represents the seller. What many buyers do not know is the agent who is finding and showing them properties is also legally responsible to the seller. But in the past several years a new type of representation has emerged with the buyer being exclusively represented by their agent. This type of representation is known as Buyer’s Agency.
From the seller’s perspective buyer's agency can eliminate any conflict of interest real estate agents may have when showing and negotiating for a buyer. The seller’s main focus is to sell their home or condo for the highest and best price which is the fiduciary responsibility of the listing agent. The main focus of a real estate agent acting as a buyer’s agent is to find and negotiate the sale for the buyer, representing their wants and wishes above all others. Sellers need to be careful about what they say, as well as their actions, when the buyer or their agent is present at showings. The seller needs to be aware that any information they may give the buyer’s agent can be conveyed to the buyer, which may or may not influence their price and terms when making an offer. Sellers also need to know that the buyer’s agent will most likely complete a Comparative Market Analysis (CMA) for the buyer which shows what similar properties have sold for in the area. The CMA is the basis for the buyer’s offer. This is where many times emotion enters the transaction and it is the job of both agents no matter who they represent to calm everyone down and present the facts to both parties. No one wants to complicate matters when as a buyer you may be making the most expensive investment you will ever make and as the seller you are trying to sell your home or condo and move on with your plans. From the seller’s perspective it is best to remember that as you are being represented, so is the buyer and both of you are trying to get the best deal possible.
When purchasing a home most people take out a loan. The question that a typical homebuyer may run into is what type of mortgage option would be the best? The real answer, is the type of mortgage that fits your financial situation. There are many types of mortgage loans out there and they all mean different things. Understanding all of the terms of your mortgage options will save you from trouble down the road. Too many people chose an option that isn’t right for them and as a result they end up in foreclosure!
There is a Fixed Rate Mortgage option. This is a mortgage that maintains the same interest rate throughout the entire life of the loan. The loan doesn’t fluctuate at all. Depending on the economic times, the fixed rate usually comes in 10, 15 or 30 year terms. This type of mortgage is good for the home buyer who needs the peace of mind with paying the same rate every month.
There is also an Adjustable Rate Mortgage. Another name for this is an ARM. This type of mortgage has rates that often change according to financial indexes that are determined by the current market. The mortgagee must be prepared that the rate on the mortgage may change year after year. This type of loan works for a home buyer who is willing to take the risk in getting the lowest rate possible at the expense of risking a higher rate and higher monthly payments. People typically choose an ARM for the lower initial interest rate and because they do not intend to own the property long-term.
Many times home buyers are presented with the Balloon Mortgage Option. This is considered a higher risk than an ARM mortgage because there can be a large payment when the loan is due in full. For instance, you may pay low rates for many years, but then when the amount is due, a large chunk of money is needed to cover the mortgage. The life of the loan can either be 3, 5, or 7 year balloons.
There are many other types of loans in addition to the few mentioned here, but these are the most common options that mortgage companies offer to homebuyers as mortgage options. Understanding your options is of the utmost importance when purchasing a home. Knowing this information could save you from the risk of not being able to pay your mortgage because of unknown factors with your loan terms. Always be sure to research your options before making your next home purchase.
Today’s real estate market is challenging to buyers, sellers and real estate agents and requires creativity to satisfy the needs of everyone. The rent to own program offered by OwnACondo.com satisfies that need.
You just purchased the home you have wanted your entire life but haven’t sold your current home. What can you do? Rent to own may be the solution to your problem. This scenario as well as many others, offer both buyers and sellers alike opportunities not often made available by traditional real estate brokers.
The rent to own program offers the seller the opportunity to sell their condo and enables buyers who might be cash strapped or have credit issues that can be addressed over time to buy.
The rent to own program works very much like a car lease. Each month the renter pays you a certain amount to live in the house. The program can be set up have a portion of the rent go toward down payment accumulating over time to enable the buyer to purchase. The seller is covering his expenses and feels secure the property is being taken care of because the potential owner is currently living there. The buyer is living in a property that might be his one day so he is saving toward a down payment and experiencing the neighborhood, schools, shopping and other amenities in the area.
There are definite advantages to the rent to own program and below are just a few.
- Potential buyers who have no down payment or credit issues may be able to purchase. They have time to build income and repair their credit.
- Depending on the agreement, a buyer may not exercise their option to purchase if there is something seriously wrong with the home.
- Monthly lease or rental amount may go toward down payment enabling the buyer to save for a down payment while living in the property.
- Potential buyers will be able to determine if the location is one in which they wish to live. They will be able to learn about the neighborhood, schools, shopping, transportation, etc.
The great American dream of owning your own home is alive and well if you know where to look and what to look for. A rent to own program can be the perfect solution for everyone and more and more people are seriously looking at it as a means to owning their own home.
While many people interested in buying condos take a break from their condo search during the holiday season, in part because of the winter weather, December is often a good time to get great deals from motivated sellers.
As the new year approaches, many sellers are very interested in finding buyers for their vacant properties, or renters as the case may be, before January rolls around. And qualified buyers can often find the home of their dreams at a discount, or with some sort of money-saving incentive. That benefits buyers and sellers, because everyone gets to enjoy a fresh start in January.
For instance, in addition to reducing the selling price of the condo, some condo owners, from the South Loop to the Gold Coast, and other attractive neighborhoods in Chicago and elsewhere, are now offering to give buyers a break on monthly assessments. Some are offering deals that would not require buyers to pay monthly assessments for the first three months of ownership, as long as the contract is signed before the end of the year. Imagine what a great holiday present that would be, worth several thousand dollars to a cash-strapped buyer.
In addition to those buying condos, in many cases people renting condos can also benefit by signing leases before the end of December. By doing so, they can often qualify for a reduction in rent for at least the first few months.
Many of these deals are not widely advertised, but working with one of our condo specialist Realtors ® at OwnACondo.com is a great way to find these sales. The condo specialist you are working with will know exactly what type of condo or townhouse you are looking for, in which towns or neighborhoods, and will be sure to negotiate with the seller to find the best deal possible for their clients.
Of course, many people with young families like to move during the summer so their children do not have to switch schools in the middle of the year. But to get the best deal, you wouldn’t have to move in this month, just sign the contract by then. So if you are ready to finance a condo now, don’t wait for the spring thaw because the sales might be over. When it comes to buying condos, December is as good a time as any to do it.
While everyone else is at the mall, you can get ready to ring in the new year on your own doorbell.
An exclusive buyer agency representation is much different than being represented by a traditional brokerage that works with buyers and sellers. An exclusive buyer agency only represents buyers. The sole focus of the agency is buyers' and making sure that they get the home of their dreams at the price of their dreams. An agency of this representation will typically provide the buyer with a presentation so that the buyer understands exactly what services the buyer agency will provide.
The first step is discussing the buyer agency representation. You will be presented with all of the state-required agency forms to help you understand the legal relationship between the agent and the buyer. The agent will also discuss the advantages of an exclusive buyer representation. The next step would be to cover all of the resources the company has to offer to make the home buyer experience as easy and convenient as possible.
It is always important to make sure that the agent covers fair housing laws and equal opportunity to ensure the client that the agency takes this very seriously. The agent will cover some of the agency laws to make sure the client understands that there are some things an agent cannot do for them because it is against fair housing laws. The agent will then explain the process of mortgage pre-approval and the importance of getting pre-approved before the search process begins.
The next step is really to discuss the search plan. The agent will map out the process of locating the home to finding the right home to negotiating the best offer to purchase the home. This can often times be a lengthy process which can get side tracked very easily. It will be the agents’ responsibility to make sure the clients stay on track with the home buying process.
Once the contract gets accepted, it will be the real estate agents responsibility to ensure a smooth closing. The agent will explain the closing process and what documents are needed. The agent will also advise the buyer to contact a lawyer to represent the buyer legally throughout the closing process.
The agent will not only explain the process of securing a new home, but they will also cover the differences between an exclusive buyer agency and what one can do for you vs. a traditional brokerage that works with buyers and sellers. The agent will cover the advantages of working with an exclusive buyer agency. At the end of the presentation the buyer will have a clear understanding of the agency relationship.
Closing costs are something that must be considered when buying a condo or house, especially because they have been rising across the country in 2010.
However, many buyers, especially those going through the process for the first time, are not even sure what closing costs encompass. Essentially, closing costs are the fees that must be paid for items required by the lender as conditions of the loan. They include the cost of title searches, loan applications, recording the deed, appraisals, credit checks, homeowner’s insurance and mortgage insurance.
The total amount of closing costs vary because they are a percentage of the cost of the property being bought, usually between 3 and 6 percent. Prior to the closing, it is advisable to ask your lender for at least an approximate cost, so you will have an idea what to expect and will come prepared. In some cases, a motivated seller agrees to cover the fees for a cash-strapped buyer, but that doesn’t always happen.
Furthermore, the average mortgage closing costs have been increasing across the country in 2010, according to an online survey by personal finance company Bankrate Inc., which released its findings in August. For instance, the closing costs jumped 40 percent in Illinois in 2010. For instance, the origination and third-party fees on a $200,000 mortgage added up to $3,505 in the 2010 survey, up from $2,486 a year ago.
The story was similar across the United States, which saw, on average, a 36 percent increase in closing costs over 2009 numbers. Bankrate attributed one of the reasons for the increase to the new regulations implemented in January. Lenders now must provide an estimate of title and closing fees within 10 percent of what the final cost will be, or they will risk penalties. The regulations require more labor in getting a loan together, but they are meant to benefit people financing a condo by providing them with as much information as possible before the closing.
In the Bankrate survey, which assessed average closing costs in the 50 states plus Washington, D.C., Illinois ranked as the 43rd most expensive, and moved up to 31st with the increases this year. But still trails behind New York, which was found to be the most expensive, with an average fee of $5,623. The survey excludes property taxes, recording fees, homeowners insurance and prepaid items such as a partial month’s mortgage interest. It also does not include any discount points.
You want a Realtor with excellent negotiating skills to help you get the best deal possible. Because after all, if you have your heart set on buying a condo that you really like, you don’t want closing costs to be a deal-breaker.
Rental condos are great, and can be found in moderately priced and luxury developments alike, in cities across the United States. But the percentage of rented condos in a particular development is an important piece of information to know for many people interested in buying condos there.
One reason the percentage of owner-occupied condos in a complex is an important consideration for many condo buyers is that if they are looking for an FHA mortgage, the percentage will have a bearing on whether they will be approved for the loan or not. The FHA recently made a slight adjustment to its rules, permitting 50 percent of the condos to be owner-occupied, whereas the minimum used to be 51 percent. This was done in part to encourage ownership. More people are applying for FHA loans now because they only require 3.5 percent down payment, while banks and other lenders want a 10 percent down payment, which many people are unable to come up with.
But the issue remains a conundrum for many condo associations. So while the FHA is becoming more lenient, many condo associations want to reduce the allowable percentage of rental condos in their own buildings to as little as 25 percent, if they are allowed at all. Of course, any change in the condo laws have to be approved by a majority of owners, and if most of the owners are investors who don’t live in the complex, they might not go along with it.
If there are too many rental condos, owner-occupants in the building often feel like they are living in an apartment complex, and express concerns that others considering moving into the building might be hesitant to move in for the same reason.
At the same time, having the ability to lease condos give owners more flexibility, if their job takes them out of the city and they are not ready to put the property up for sale. Also, many people like the idea of being able to rent a condo, rather than an apartment, because condos are usually larger and there are often more amenities in condo developments than in apartment complexes. Many also sign rent-to-own contracts, so they will eventually become owners.
So the two sides have come to some sort of “happy medium” regarding the issue of rental condos, because while some condo owners would rather not have any rented units in the complex, feeling that renters do not have as much invested in, others point out that having units rented is definitely better than having them empty.
Working at OwnACondo.com, people often tell us why they decided to buy a condo or house at this time, and here is just such a homebuyer’s story.
Joan had moved around a bit after college, going where the jobs took here, to Boston and elsewhere. Now that she is back in the Chicago area, she decided that she had enough of apartment living. She heard a lot of gloom and doom from people who said this was not a good time to buy, but she had realized that now really is a good time. After all, she figured, as hard to believe at it is, we have 1963 mortgage rates. Imagine, getting a loan for the same interest that it would have cost almost 50 years ago. That is a hard deal to pass up. Of course the prices of homes have multiplied since then, but so have wages and everything else. But you can still borrow money at the same rate as when John F. Kennedy was president.
Besides the price of the loan, a homebuyer’s story also has to consider house affordability. In this case, Joan was looking at both condos and houses, and she found the ideal single-family house in a southwest suburb. Because she has a large dog, a Dalmatian, she had wanted to buy a house but was afraid initially that she would be limited to buying a condo due to the price. However, due to the low interest rates and the seller’s interest in coming to a deal, she was able to get a nice, two-story house near a park for what she considered a steal. So deals are out there, but sometimes you have to be patient. Joan actually had been looking for several months, and one deal actually fell through, but she took her time and did not get discouraged. All the naysayers were surprised and happy for her when she finally landed her dream house, even in this economy.
Of course, housing affordability varies between cities, so whether in Chicago or Minneapolis, or New York or Miami or L.A., a homebuyer’s story is going to be different. In Joan’s case, she bought a three-bedroom house for a little more than half of what her sister bought a one-bedroom condo for in suburban New York City a few years ago, but prices have gone down in New York too, and there are deals to be found now in every city. And they are not just on dilapidated, foreclosed properties. Joan’s house was in walk-in condition, and she couldn’t wipe the smile off her face as she turned that key in the door of her new home.
$950 Down
There is no better time than the present to buy condos, because along with low interest rates and tax incentives that make it a buyer’s market, motivated developers are offering incentives such as the $950 down program, which allows qualified buyers to get their own condo for an initial down payment of $950.
That’s right, just $950 is all that is needed as a down payment to buy one of the hundreds of condos being sold through the condo program for people with credit scores of at least 620. More than 820 condos located in developments throughout the Chicago area are available for $950 to first-time buyers and repeat buyers, with initial 6.5 percent interest-only financing provided by the developer.
One-. two- and three-bedroom condos with prices as low as $69,900 are available in attractive developments such as Grays Point in Grayslake; Waterfall Glen in Willowbrook; Lloyd Place in Worth; Scenic Tree in Palos Hills; and the Oak Lawn developments of Menard Manor and Park Place. Monthly payments for the condos, including assessments, average between $750 and $1,000.
But the time is limited for those who want to take advantage of the program, which will end April 30, so anyone interested is advised to act quickly and lock in a deal for the condo of their dreams. The deadline coincides with the expiration date for the Government-Sponsored Tax Credit, which participants in the $950 down program will apply for and receive after the initial land contract, and use to build up their down payment for a conventional loan. First-time home buyers could get as much as $8,000 as a tax credit, or $6,500 for a Repeat Buyer.
When the buyer refinances, within 18 months, the tax refund will go toward the down payment. Bank of America, the exclusive partner of OwnACondo.com, can gets loans with excellent interest rates that could be as low as 5.25 percent.
The $950 down condo program is especially good for people who are renting, and would like to buy a condo, but might have thought they could not afford one. You can’t beat $950 as a starting price, and there are a lot of condos to choose from.
All the condo developments are in great suburban locations. Many buildings have been recently renovated, and they all have attractive amenities inside and outside the buildings. They are close to transportation, shopping, restaurants and parks, too.
In short, you can’t really go wrong with the $950 down program. It is one of the best incentives anyone could ask for to become a property owner.
