Classic Properties REALTORS ®



Posted by Classic Properties REALTORS ® on 5/5/2019

There are different kinds of mortgages available to prospective homeowners today. The right mortgage for you will depend on a number of factors, including your level of income and credit rating. While there are numerous mortgage products available to buyers today, they will mostly fall under the categories below:

FHA-Backed loans

Most folks getting a home for the first time will purchase it with the help of a Federal Housing Administration loan. Introduced back in the 1930s after the Great Depression, these loans are insured by the government and hence come with attractively low-interest rates. Since the government backs them, even folks with a bad credit score can confidently apply for FHA loans. If you can't raise all of the down payment the seller is asking for, an FHA loan is ideal. 

VA loans

This kind of loan was established by the US Department of Veteran Affairs to enable former members of the nation’s armed forces to buy homes. You can also access this type of mortgage if you’re the spouse of a deceased veteran. Those who fit under this category can get a mortgage even without a down payment. 

Fixed-rate mortgage

If you want to buy a house to stay in for the long haul, a fixed-rate mortgage is a good idea. With this type of loan, the interest rate will remain fixed for the duration of the mortgage. If economists are projecting a rise in interest rates, you can cushion yourself from higher repayments with a fixed-rate mortgage. The predictability of this type of mortgage is ideal for planning since the payment consistency makes it easy to budget your paycheck. While this protects you if the interest index rises, you won’t benefit if there is a fall in the interest index. 

Adjustable rate mortgage

If you’re confident that interest rates will decline soon, this kind of mortgage will help you take advantage of that trend. Should the interest rate dip, you can expect your monthly repayments to reduce accordingly. 

Despite the name, the interest on the mortgage is usually not flexible for the duration of the loan. The loan starts with a period of fixed interest followed by a period where it becomes adjustable. Such an arrangement will work well for you if you intend to sell the house before the end of that initial period.

Find out the kind of loan you qualify for and see if you can push for better terms. Not sure where to apply? Ask your real estate agent about their recommended lenders.




Categories: Real estate   Mortgage   homebuyers  


Posted by Classic Properties REALTORS ® on 2/24/2019

Whether you're an active senior or have a mobile job, heading to warmer climes in the winter, or cooler temperatures in the summer offers unique challenges and advantages. Buying a second home in your favorite locale, rather than living in an RV or rental, could be the perfect decision for you.

Be close to family

When your adult children take jobs that move them across the country, looking for a second home to spend time nearby—to see those grandchildren, for example—for holidays, the summers, and other special times makes perfect sense. After all, just because you want to be close by sometimes doesn’t mean you want to be there full-time.

Eventually, however, you may want to relocate near to family permanently as you age and find travel between your homes cumbersome. If you purchase your snowbird home with the future in mind—being mindful of stairs, access to exceptional healthcare and other age-related issues—your transition to living there full time will be smoother. 

Be fiscally astute

Second homes in tax-advantaged areas—states that do not have an income tax—may reduce your tax liability. Several states including Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming fall into this category. In addition to income tax savings, some areas have a lower property tax than others. The savings on property tax in one state might offset its income tax and vice versa. Before buying property in one of these states for tax advantages, speak with a qualified tax consultant about how it might affect your bottom line.

Be investment wise

One question you may have about a second home is “Can I earn income with it when I’m not using it?” The answer is “yes” and “no.” Online rental portals make the idea of a holiday rental more attractive than when you marketed it with a For Rent sign in the window. But, they don’t always make enough to pay for themselves. Coveted rentals in holiday destinations have high seasons, low seasons, inclement weather, and generally off years and the cost of maintenance and turnover between renters, general repairs and damages might outweigh the value. Unless you intend to rent out your property during the high season, which means you can’t use it then for yourself, you might make enough to break even, but most experts warn that your holiday rental income may not cover your mortgage. If you decide to rent your snowbird home, don't rely on the property to pay for itself.

If you've seriously considered buying a second home and wonder about the advantages and disadvantages, consult a local real estate expert for information on second homes in your desired location.




Categories: homebuyers   retirement