Why you should pay off your mortgage before you retire The By Ilyce Glink and Samuel J. Tamkin October 24 at 7:30 AM (BigStock) I saw your excellent article on how much it costs to own a house after the mortgage is paid off. The costs remain in perpetuity! Is it always a good idea to pay off a mortgage, though? A house “free and clear” means a large asset that provides no financial opportunity to the owners.
Category: Mortgage + Real Estate Tips
If you’re a first-time homebuyer, the whole idea of “closing” on a home may sound mysterious and a little bit spooky. But it doesn’t have to be!
Be prepared for closing costs, which sometimes catch new buyers off guard. While every loan varies, approximately 2-5% of the purchase price of the home will be required at closing. For example, if you are purchasing a $250,000 home, you may need to have an additional $5,000 to $12,500 available for fees on top of the down payment amount.
What are these fees for, you’re probably asking?
Here are 10 of the most common closing fees:
1. Inspection Fees – A home inspector will examine the condition of the home. The average fee for this service is around $300. Depending on the area and the age of the home, other unexpected inspections may also be necessary to search for things like wood ants, radon, lead-based paint, asbestos, mold, etc. Each of these inspections cost extra.
2. Appraisal Fee – You will pay a fee to evaluate the home for its current value (compared it to other homes sold in the area) to make sure it is worth what you want to pay.
3. Realtor Fees – For getting you access into homes and helping guide you through the process, Realtors are paid a commission from the sale price of the home.
4. Origination Fee – This is the fee a lender charges you for originating a loan to you.
5. Discount Points – If you want to pay for a lower interest rate, commonly referred to as “buying down the rate”, you will be charged a fee; usually a small percentage of the loan amount.
6. Title Services – You will need to buy lender’s title Insurance to protect your lender against claims on the house. Owner’s title insurance is optional, but if elected, there is a cost.
7. Property Taxes – The lender collects for any tax due from you to pay your local government at the time of the purchase.
8. Government Recording Fees – When the local government records the sale, they charge a fee for it.
9. Initial Interest – You pay interest on the loan amount for the time between when you close and the end of the current month.
10. Private Mortgage Insurance – If your down payment is less than 20% of the purchase price of the home, you may also have to purchase this insurance.
As with any home purchase, I’m here to help answer all these loan questions! Call me at (602) 456-2195 and we can walk through all your closing costs together.
Sources: U.S. News & World Report and Kiplinger
New homes aren’t being built, and construction and development lending trends may be to blame, according to Kroll Bond Rating Agency’s Christopher Whalen.
Regulations have changed the equation for banks when it comes to where they focus their C&D lending activity. And because of the fundamentals underpinning the markets for single-family homes versus other sectors, a significant portion of today’s C&D lending is going to multifamily developments instead, Whalen argued in a research note.
Given your credit standing and other factors, you may qualify for a better rate with one lender than another. Often it’s hard to tell a good offer from a bad one without shopping around, so pick up the phone, check online sites and let lenders battle for your business.
- Address the details – you might think that people won’t notice the small things, like an old outdoor light fixture or slightly rusty locks, but they do. Hardware is something that nobody notices when it’s good and everybody notices when it’s bad. Don’t give potential buyers a reason to hesitate.
- Make your front door a statement piece – a bold front door is instantly noticeable. It can change the entire look of the outside of a home and it makes the house look a little more kept up.
- Light it up – solar lights along the walkway are inexpensive, easy to install, aesthetically pleasing, and functional. Because they generate power from the sun, they won’t increase your energy bill. To install, you just stick them in the ground. And then they look nice and help you see at night.
- Get some plants – potted plants on your front porch can instantly make your home look homier and well taken care of. This can also give you an opportunity to get creative and try your hand as an amateur landscape architect.
- Mail it in – a sleek new mailbox can add a touch of sophistication to your home. It says “I care about the details.”
- Window dressing – adding window boxes the flowers or lush plants can really take a home up a notch. They make a home look a little warmer and softer and add instant charm.
- Artsy fartsy – include some outdoor art into your garden. Art can vary the mix and helps to draw they eye to a specific area.
- Make your gutters shine – gutters usually aren’t the prettiest part of a house, but they don’t have to be the ugliest. Clean yours out and polish the outside for a generally well-kept look to your home. Or replace them altogether!
- Repaint – a fresh coat of paint is like a facelift for a house. It makes it look newer and nicer. Be sure to paint the trim, as well. And while you’re at it, replace any missing shingles and fix any broken fencing.
- Clean up your driveway – if your driveway is discolored in any way, it could take away from the curb appeal. But this is a pretty quick fix. Stain the concrete and you’ll be good to go.
A first impression is important for everything, even for a house. A nice exterior will entice potential buyers to investigate the inside, and that’s the first step to getting an offer!
Thinking about selling your home and moving on to another one? Give me a call at (602) 456-2195 or email me at firstname.lastname@example.org when you’re ready.
Sources: Real Simple and Better Homes & Garden