How Much Down Payment Will I Need For a House?

When you are in the market to purchase a home, one of the first things you will need to determine is how much of a down payment you will have to place on the property. 

This applies to any type of home, loft, condo, or townhome that is used for your main residence. Second homes and commercial properties have different requirements for down payments.

Type Of Mortgage You Are Going To Use Can Impact Down Payment

The type of mortgage that you get will impact the amount of your down payment. Different loan programs have different requirements, some of which are required by laws that were enacted after the financial crisis in 2008.

Conventional Loans

Conventional mortgages offer the best interest rates and are usually available for the longest terms. You can apply for 10, 15, 30 and 40 year conventional mortgages. A conventional loan will require you to place a minimum of 20 percent down on your home. A $200,000 home would require a $40,000 down payment. However, this large of a down payment will give you instant equity in your home and significantly reduce the interest payments that you will make over the life of the loan.

Adjustable Rate Mortgages (ARM’s)

An adjustable rate mortgage can have down payment requirements as low as five percent. Some loans are even being offered at 3.5 percent. This type of loan usually has low payments for the first one to five years, then the interest adjusts and the payments become higher. This type of loan is usually preferred by someone who does not plan to remain in a home for an extended period of time.

Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac loans are guaranteed loans through the use of mortgage insurance. These federally backed loan programs will allow down payments to be as low as three percent for first time home buyers. In addition to this low down payment, Fannie Mae and Freddie Mac will allow the down payment money to come from a monetary gift. (Many loans require that the down payment is from the savings of the buyer.) These loan programs offer very competitive interest rates. However, buyers are required to carry mortgage insurance as a guarantee on the loan. This is an additional premium added to the mortgage payment.

FHA Loans

The Federal Housing Authority offers a mortgage insurance program that guarantees loans for first time home buyers. Down payments are generally 3.5 percent for all buyers. Those with credit scores under 580 can still qualify for the program, but will require a larger down payment. Similar to Fannie Mae and Freddie Mac, this loan program also has a separate mortgage insurance payment.

VA Loans

You may qualify for a VA loan if you are on active duty or are a military veteran. In this case you will not have to pay any money down. You should contact a VA loan specialist to make sure the paperwork is handled correctly and that you get the best interest rate available.

Additional Down Payment Information

It is important to remember that larger down payments reduce the overall debt on the home. You can save thousands of dollars in interest payments over the course of the loan by using a larger down payment. Additionally, larger down payments also help secure lower interest rates. Lenders feel more comfortable dropping interest rates on homes that already have equity established in the home.

If you're looking for an urban condo or high rise in Phoenix, Scottsdale or Tempe AZ contact the urban specialists at We Know Urban. Visit the site to learn more about condos for sale.  

Is a Lease-to-Buy Contract Worth Signing?

A lease-to-buy contract is an option that isn't new, but is becoming more popular when you're renting a high-rise Phoenix condo or loft. Leasing a property before you buy can have advantages for you as a potential buyer.

One of the biggest advantages to the buyer and the seller is the flexibility of the contract. It's important for all parties to read, understand, and sign the contract.

How A Lease-To-Buy Contract Works

An agreement between a tenant and owner that includes an option to buy allows the tenant to purchase the property while the lease is valid. Agreements of this type are usually drawn up for duration of twelve to eighteen months.

However, the duration of the contract may be longer at the discretion of the buyer and seller, especially if the buyer needs additional time to have the funds available for the mortgage.

Buyer's Exclusive Rights

The tenant and owner agree to the terms before the contract is signed. While the contract is in effect, the renter has an exclusive option to purchase the property. Lease-to-own agreements allow the buyer to put down less than a traditional down payment.

The amount is usually between one and five percent. The renter pays the seller a deposit and the monthly payments go toward the purchase of the property.

Benefits For Lease-To-Purchase Buyers

The lease-to-buy contract is an opportunity for a buyer to save money for the purchase when they don't currently have the funds for a traditional down payment. The contract allows a buyer with a low credit score to increase their score and resolve any credit problems before the lease expires.

The higher the credit score, the more likely the buyer is to be approved for a mortgage. The advantage of a lease-to-buy contract is that the payments the buyer makes build equity in the property.

If the buyer is approved for a mortgage, the property can be purchased at any time while the contract is valid. Entering into a lease-to-purchase contract is a good way to determine if buying a condo or loft is the best option.

What Sellers Need To Know

A lease-to-purchase contract can be beneficial for the seller when the market is slow. The contract allows them to increase their cash flow.

The lease-to-buy agreement is a good option for real estate developers who are having problems leasing or selling units. Some real estate developers offer incentives to potential buyers. The broker may offer an option to buy at a set price if they purchase the condo or loft within a year of signing the lease.

Ensuring A Successful Transaction

When entering into a lease-to-purchase contract, it's essential that all parties understand the contract. It's advisable to have a real estate attorney go over the terms of the contract before it's signed.

The property should be inspected and all necessary repairs should be made before the contract is finalized. All parties should be clear about who will pay for the maintenance and repairs to the property.

If there are any tax liens, it should be disclosed in the contract. The buyer should be aware of the amount due for taxes, HOA fees, and insurance.

If you are looking for Scottsdale condos, We Know Urban Realty will help you find the perfect place. Their realtors are experts when it comes to urban living. Visit the site to see what's available right now: http://weknowurban.com/

What Is the Difference Between an Agent and a Broker?

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Buying or selling a home may be just one of the biggest financial deals you will make in your life, add the key element of your lifestyle, where and what area you desire to live; turning it into one large decision.  

As your real estate agent helps you in every step of the buying or selling process, the skills and qualifications of that agent can eventually make a major difference in your real estate experience. 

There are three main titles that signify levels of training and licensing in the real estate profession, but several other forms of specialist certification which may be relevant to your real estate transaction.

Real Estate Broker

Although some of the requirements vary from state to state, a broker is generally required to complete over 100 hours of classes, have at least a year's experience as a real estate agent, and pass exams. Brokers are legally able to handle deposits and escrow accounts. 

In most states, real estate agents must work under the supervision of brokers. A licensed broker working under the supervision of another broker is often called an "Associate Broker." If choosing an agent who is not a broker, you should make sure that the agent works for a reputable brokerage.

Real Estate Agent

Like brokers, real estate agents must be licensed by the state in which they are working, something that requires completing a certain amount of coursework, usually at least 50 hours, and passing a licensing exam. 

While real estate agents can list and show houses and work with customers, they are normally employed or supervised by brokers. While all brokers must be real estate agents, not all real estate agents are brokers.

REALTOR®

To use the title REALTOR®, a real estate agent must be a member of the National Association of REALTORS®, and have agreed to follow its code of ethics.

Certified Real Property Appraiser

Although a real estate agent is expert at understanding the market, and helping you determine selling prices and offers for properties, if you intend to get a mortgage, you must get an appraisal conducted by a state-certified appraiser. 

Appraisers have a duty to be objective and unbiased when evaluating properties. The Appraiser Qualifications Board sets training standards for appraisers.

Seniors Real Estate Specialist®

Members of the National Association of REALTORS® who have completed advanced training and passed an examination on addressing the particular real estate needs of seniors can obtain SRES® certification. 

Agents with this designation are adept at helping seniors who may be downsizing, moving to transitional living arrangements, or setting up multi-generational trusts.

Military Relocation Professional

Relocating as a military family brings with it unique challenges, especially in dealing with VA financing and other aspects of the military relocation process. 

This certification requires completing specific coursework and passing an exam focused especially on VA loans and military paperwork.

National Association of REALTORS® Green Designation

Many urban professionals are concerned about the impact of their home choices on the environment. ‘What is the Green Resource Council’ trains and certifies real estate agents to work with homeowners concerned with finding or selling green housing.

If you are looking for a condo to buy in Arizona, We Know Urban Realty will help you find the perfect place. Their realtors are experts when it comes to urban living. Visit the site to see what's available right now: http://weknowurban.com/

Some Pitfalls to Watch for When Buying a Starter Home

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First time home-buyers are the power behind the real estate recovery. Without entry-level buyers, existing homes do not give sellers the ability to buy other homes. When it comes to the real estate economy, buyers of starter homes save the day.

Unfortunately, entry level home buyers frequently work with less experienced real estate professionals who are not as well prepared to support the inexperienced buyer who needs more explanation and coaching. 

The first home purchase is often more stressful than second or third home purchases. Stress and anxiety are contributing factors to the high statistics of pitfalls and setbacks that seem to accompany first home purchases.

Valuable Facts and Tips When Buying a Starter Home

• A small house with a yard is not the ideal starter home for everyone. Entry level buyers have the most success when homes have been viewed on a more recreational and educational level before pre-qualifying for a loan and submitting an offer to purchase. 

Although a downtown high rise condo is not your mother’s first home, a condominium project in an urban setting does not require a major investment in gardening tools, or in many cases, a second car. It is important to know what one really desires as well as what is within a person’s capabilities.

• Once an offer to purchase has been signed by both buyer and seller and the flurry of emotion following acceptance has calmed, the sales contract should be carefully read and reviewed by the buyers in a different setting with minimal distractions. The purpose of this review is to adjust the initial plan of action to conform to what is now a legally binding contract. There are inevitable questions that are best answered early on during the escrow and predictably will come up only after the deal is signed.

• Begin loan process immediately. An appraisal that is not timely, a missing employment verification, or an overlooked bank verification are just a few of the details that will hold up a sale closing and sabotage moving plans for all parties. By starting the financial procedure right away, margins of time are available to solve problems that are minor early on and major when it is time to close the escrow.

• Real estate agents representing first time home buyers are often the hardest workers when it comes to showing property. The lack of experience shows itself with overlooked details that grow into major issues. If questions arising from sales contract reviews are not answered clearly, insist on clarity from the escrow agent, loan officer or broker in charge of the agents’ real estate office as soon as possible.

A home purchase is the largest and most permanent investment most people will ever make. It is normal to have doubts. Whether it is a little cottage in the woods, or a downtown high rise condo; the essential considerations of the home to provide a sense of safety and security, and that the monthly loan payment, projected maintenance costs, insurance and dues are within the capabilities of the buyer(s). If that is the situation, they should make an offer!

If you are looking for a condo to buy in Arizona, We Know Urban Realty will help you find the perfect place. Their realtors are experts when it comes to urban living. Visit the site to see what's available right now: http://weknowurban.com/

Does It Make Sense to Buy a New Home Before You Sell?

Does It Make Sense to Buy a New Home Before You Sell? from Kay Frenzer-Zeeh

If you are looking for a condo to buy in Arizona, We Know Urban Realty will help you find the perfect place. Their realtors are experts when it comes to urban living. Visit the site to see what's available right now: http://weknowurban.com/

Advantages of Buying a Condo

After many years of living in a single family home, many people begin to consider condominium ownership as a good alternative for their changing needs. 

Condominium living in an urban environment is significantly different than the big home in the suburbs. 

It can be the perfect option for young singles who are free to spend their time as they like and for older people thinking about shedding their big home in the suburbs.

If you’re shopping for a new residence, consider the many advantages of owning a condominium:

No Maintenance

If you are moving from a single family home, you are fully aware of the time and money this type of housing requires. High rise condos allow residents to avoid the long weekends of grass mowing and gutter cleaning, so you can spend more time doing the things you love. Maintenance expenses for the condominium are included in your regular monthly or quarterly condominium fee, so you can budget your money more easily.

Shared Amenities

Many condominium lofts and apartments have swimming pools, exercise rooms and clubrooms that are shared in common with other residents. The expense and maintenance for these items are included in your fees, so that you and your guests can enjoy them completely trouble-free.

Close to Urban Excitement

Urban condos are close to restaurants, theaters, shopping venues, museums and other activities, so that you can spend more time enjoying yourself and less time getting there. High rise condos are often located near city centers, which provide many opportunities to participate in civic events, such as holiday festivals, farmer’s markets and specifically- scheduled activities.

Easy Transportation

Urban condos also allow you to access public transportation easily; so that you can get anywhere you need to go. Buses, taxis, subways and walkways are easily accessible and provide cost-effective transportation throughout the area.

For Young Professionals

The purchase of a condominium puts young professionals in the middle of urban activities. These residents often spend long hours at their jobs and don’t have time for long commutes and maintenance. A condominium in an urban neighborhood allows them to easily meet with friends and enjoy all that the city provides.

For Retirees

For older people who have raised their families and now look forward to more freedom in life, the urban condominium can mean increased recreational opportunities and chances to get out with friends more easily. Maintenance expenses for the condominium are included in condominium fees, which make budgeting retirement income easier. Access to public transportation means that you don’t need a car, which can be an important feature for those who can no longer drive.

A Good Investment

Condominiums tend to hold their value under most market conditions. Many people look to condominium living for a variety of reasons, and the number of condominiums that are available tend to be limited. In some cases, condominiums can also provide rental income. For these reasons, your condominium purchase is likely to be a good investment for years to come.

The right condominium can add new dimensions to your life and can make life easier and more enjoyable for people, both young and old.

If you are looking for a condo to buy in Arizona, We Know Urban Realty will help you find the perfect place. Their realtors are experts when it comes to urban living. Visit the site to see what's available right now: http://weknowurban.com/

A Few Red Flags to Watch for When Buying a Home

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When you're buying a home, it's not feasible to have an inspection done on every home that you tour, but it's important to know about any potential problems before you make a commitment. The same principle applies when you're considering a downtown high rise condo.

Homeowner's Association

It's essential to know what the HOA is like before committing to the sale. Each homeowner's association has different rules and a board that makes decisions regarding homeowner's rights.

One way to learn about the HOA is to get copies of the minutes of recent meetings. Some HOA's are more flexible than others. Make sure you understand what improvements or changes you can make to your property that don't conflict with the HOA.

Fees Included in the Price

Most buyers looking for downtown condos to buy calculate what they'll pay for their mortgage but don't always consider additional fees. When you buy a condo, you have to pay a monthly fee that may include:

• Landscaping
• Maintenance of common areas
• Master insurance
• Snow or refuse removal

What most buyers don't know is that the monthly fee isn't the same for every tenant. If you buy a condo that's assessed at a higher rate than some others in the building, your monthly fee may be higher. When you're signing the contract for your condo, the fees must be itemized and included in the contract. The monthly fee may change if the owner of the building plans on making upgrades. If there's a high delinquency rate, the fees may be raised.

Out of Pocket Maintenance and Repairs

It's customary to take out a homeowner's insurance policy when you buy a downtown high rise condo. The HOA fee in many cases includes a master insurance plan that covers damage to the building. Even though some states don't require separate insurance apart from the HOA fees, it's a good idea to have a policy to cover damage to personal items.

Rates of Delinquency

If a substantial number of homeowners in a building are delinquent in paying their HOA fees, it may not be possible to be approved for a mortgage. The same rule often applies when a large number of residents in a building are renters rather than owners. Even if you have a superior credit rating, the building may be considered an apartment building and your mortgage could be denied.

Telltale Signs of Damage

When you're inspecting the condo you want to buy, make sure to look for recent paint jobs in one area or peeling ceilings that could indicate water damage. Check doors and windows to see that they open and shut as they should. Check electrical outlets and fixtures and look for signs of mildew or mold. It's best to contact a home inspector to check out the condo thoroughly before you sign a contract.

The Appraiser's Role

Your lender will have an appraiser inspect the condo to make sure that it's worth the asking price. Buyers have the right to look at the appraisal. Sometimes, the appraiser may make not of potential issues that the buyer should know about before signing the contract.           

If you are looking for a condo to buy in Arizona, We Know Urban Realty will help you find the perfect place. Their realtors are experts when it comes to urban living. Visit the site to see what's available right now: http://weknowurban.com/