Thursday, July 30, 2015

House Shopping 101


For many house hunters the search for their first home is an intimidating process. We have compiled some info and some pointers to help make the process as smooth as possible.

AGENT versus REALTOR:

You have probably heard various terms to describe real estate sales people: realtor, agent and broker. The term “realtor” is actually a trademarked term of the National Association of Realtors. Only real estate agents who belong to a NAR-affiliated organization may call themselves “realtors.” The real estate “agent” and “broker” are defined by the different state-issued licenses they attain.

HOW TO CHOOSE THE BEST REALTOR FOR YOUR NEEDS

There are several steps you should take when searching for a realtor.
  1. Ask around and get referrals from your friends
  2. Research the license online
  3. Google their names to see if they may have won any awards
  4. Look for certain designations, such as CRS (certified residential specialist), ABR (accredited buyer’s representative) and SRES (senior real estate specialist)
  5. Check out their current listings
  6. Ask specific questions about the neighborhood to see how in touch the realtor is with the area

WHAT IS MLS?

MLS is the multiple listing service, which compiles an extensive database of available properties offered by a wide variety of realtors and agencies. There are many online websites that allow consumers and real estate professionals to access these listings.

SHOULD YOU CHECK OUT OPEN HOUSES?

The open house used to be a primary tool in the realtor’s bag of sales “tricks.” However, recent studies have shown only about 9% of home buyers found their home through an open house. The open house has been replaced to a large extent with virtual online tours.

ADDITIONAL POINTERS

  • Do not even tempt yourself with homes over your budget.
  • Do not shop alone. Feel free to invite a friend with home shopping experience to your house hunting journey.
  • Ask why the seller is so motivated to leave their home. It may not be the “Amityville Horror,” but there may be a very good reason why they are fleeing the neighborhood.
  • Check inside every door – even the closets.
  • Make notes and take photos (with permission).
  • A tape measure is a very helpful tool – especially if some rooms seems a bit small for your furniture.
  • Visit sites such as Google Maps and Zillow to get additional information about the neighborhood, schools, etc.

THE HOME STRETCH

When you are ready to make an offer, please contact AltaOne’s real estate department. We offer some of the most competitive real estate rates, and our team of professionals make the process extremely pleasant.


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Monday, July 13, 2015

Helpful HELOC Facts


Helpful HELOC Facts


Your home provides solid shelter and comfort. But it can also help pay for life’s expenses. If you are a homeowner and you have paid down a chunk of your mortgage, having a home equity line of credit, or HELOC, could be a good way to tap into extra funds when you need them.

Here are some basics on how HELOCs work and how to know if one is right for you.

1. The amount of financing is based on your home’s value. When you apply for a HELOC, you’re offering your home as collateral, and many financial institutions will lend as much as 80% to 85% of the home’s value minus the mortgage balance.

For example, say your home is worth $300,000 and you owe $200,000:

     80% of home value: $240,000
     Amount owed on first mortgage: ($200,000)
     The difference: $40,000

So you could obtain a HELOC of up to $40,000 in this scenario.

2. You are not charged interest until you withdraw money. Once you are approved by a lender like Alta One Federal Credit Union, you do not have to spend HELOC funds right away. You also do not have to start paying interest until you use the line of credit.

Paying back a HELOC works differently than with other types of financing. The line of credit may have a term of around 10 to 20 years, and the first part of that term, which could be five to 10 years, is generally a “draw” period. During this time, you could borrow against the line of credit and may only have to pay back the interest on the financing you use. After the draw period, you may no longer borrow against the credit line and you start paying back the principal plus interest.

Because of this feature, your monthly HELOC payments may initially be lower than if you took out a fixed home loan. But the line of credit payment could increase by the latter part of the term. And it is important to make your payments, because you could lose your home if you default.

HELOC interest rates can vary based on the markets, just as with credit cards. But generally speaking, they are lower than credit card interest rates. During the HELOC application process, you may have to pay fees normally related to applying for a home loan.

3. Interest can be tax deductible. Because a HELOC is secured by your home, you could receive a home mortgage interest deduction on your taxes. Interest fees are generally tax deductible up to $100,000 for lines of credit taken on first or second homes.

4. HELOCs are often better for multiple purchases. If you know you need a chunk of money for one set purpose, like to remodel a kitchen, then a loan may be an easier option. But if you need access to different amounts of cash several times, say for repairs around the house if various appliances break down, and to cover medical expenses, then a HELOC could be your best option.

5. They can also be better for unexpected expenses. HELOCs can be good if you need a safety cushion, in addition to your savings, to prepare for unexpected bills. With a regular home loan, it could take a few weeks for approval, which means it would be weeks before you receive any funds. And once you receive the money, you have to immediately start paying back the home loan with interest, which means it would not be ideal to save for emergencies.

But if you are approved for a HELOC before an unexpected event occurs, you could have quick access to the line of credit and could use it at a moment’s notice.

If you own your home and have equity, a HELOC is an excellent source of funding. By understanding what it is and how it works, you will have the tools to help decide if a HELOC is the best product to meet your needs.


Margarette Burnette NerdWallet http://www.nerdwallet.com/


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