Shari Sagan McGuirk's Blog
Whether you’re a first time homebuyer or a seasoned homeowner, the terminology of mortgages can be confusing. Since buying a home is such a huge financial decision, you’re also going to want to make sure you understand every step of the process and all of the conditions and fees along the way.
In this article, we’re going to explain some of the common terms you might come across when applying for a home loan, be it online or over the phone. By learning the basic meaning of these terms you’ll feel more confident and prepared going into the application process.
We’ll cover the acronyms, like APRs and ARMs, and the scary sounding terms like “amortization” so that you know everything you need to about the terminology of home loans.
ARM and FRM, or adjustable rate vs fixed rate mortgages. Lenders make their money by charging you interest on your home loan that you pay back over the length of your loan period. Adjustable rate mortgages or ARMs are loans that have interest rates which change over the lifespan of your loan. You may start off at a low, “introductory rate” and later start paying higher amounts depending on the predetermined rate index. Fixed rate mortgages, on the other hand, remain at the same rate throughout the life of the loan. However, refinancing on your loan allows you to receive a different interest rate later down the road.
Amortization. It sounds like a medieval torture technique, but in reality amortization is the process of making your life easier by setting up a fixed repayment schedule. This schedule includes both the interest and the principal loan balance, allowing you to understand how long and how much money will go toward repaying your mortgage.
Equity. Simply state, your equity is the the amount of the home you have paid off. In a sense, it’s the amount of the home that you really own. Your equity increases as you make payments, and having equity can help you buy a new home, or see a return on investment with your current home if the home increases in value.
Assumption and assumability. It isn’t the title of a Jane Austen novel. It’s all about the process of a mortgage changing hands. An assumable mortgage can be transferred to a new buyer, and assumption is the actual transfer of the loan. Assuming a loan can be financially beneficial if the home as increased in value since the mortgage was created.
Escrow. There are a lot of legal implications that come along with buying a home. An escrow is designed to make sure the loan process runs smoothly. It acts as a holding tank for your documents, payments, as well as property taxes and insurance. An escrow performs an important function in the home buying process, and, as a result, charges you a percentage of the home for its services.
Origination fee. Basically a fancy way of saying “processing fee,” the origination covers the cost of processing your mortgage application. It’s one of the many “closing costs” you’ll encounter when buying a home and accounts for all of the legwork your loan officer does to make your mortgage a reality--running credit reports, reviewing income history, and so on.
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97 Phillips Avenue, Swampscott, MA 01907
97 Phillips Avenue, Swampscott, MA 01907
For home sellers, maximizing the value of a property remains a top priority. However, finding the best ways to boost the value of a residence quickly can be an uphill climb for many home sellers, and for good reason.
In most instances, home sellers have limited time and resources at their disposal. Thus, dedicating substantial time and resources to complete a full home overhaul rarely, if ever, is an option.
Fortunately, there are many quick, easy ways for home sellers to make the most of their time and resources and boost their value of any home in any housing market. Here are three tips to help home sellers enhance a property's value.
1. Focus on the Kitchen.
The kitchen often represents the main attraction in a home. As such, you may want to allocate time and resources to revamp your kitchen over other areas of your house to boost your residence's value.
Updating your kitchen hardware and cleaning the kitchen floors often requires minimal time and resources but can make a major difference in the eyes of homebuyers. Thus, a home seller who focuses on kitchen enhancements may be able to move one step closer to maximizing the value of his or her house.
2. Paint the Bedroom Walls.
Adding a fresh coat of paint to the bedroom walls can make a world of difference in your bedroom's appearance. Plus, you may be able to paint the walls in only a few hours, which means you won't have to worry about allocating substantial time and resources to complete this task.
Remember, you only get one chance to make a first impression. And if you paint your bedroom walls, you can minimize signs of wear and tear on your walls and give your bedroom a new look and feel. As a result, your bedroom may help your home stand out to homebuyers and enable you to optimize the value of your residence.
3. Keep Your Home's Exterior Clean.
Simple home exterior upkeep can deliver long-lasting benefits, particularly when it comes time to add your house to the real estate market.
Mowing the lawn, trimming the hedges and performing other landscaping tasks will boost your home's curb appeal instantly. In addition, if you power-wash your home's siding and driveway, you can may be able to transform your ordinary house into an attractive one that stirs up plenty of interest from homebuyers.
When it comes to finding ways to boost your home's value, don't be afraid to ask your real estate agent for help. Your real estate agent is an experienced housing market professional, and as such, may be able to offer tips to ensure you can improve your home without breaking your budget.
Furthermore, your real estate agent can provide honest feedback about your home. That way, you can establish realistic expectations and get your house ready to show to potential homebuyers.
Use the aforementioned tips to bolster the value of your home – you'll be glad you did. By doing so, you can enhance your house's appearance inside and out and improve your chances of a quick home sale.