Navigation

Mortgage 101: Five Key Mortgage Terms You Need to Understand

From putting your home on the market to finding the lender with the best rates, there are so many things involved in buying a home that the terminology is just one more thing to add to the list. While there may be quite a few words you’ll hear that may be unclear, here are a few you’ll want to watch out for so you’ll be prepared for home ownership.

Adjustable-Rate Mortgage

Often known as ARM, an adjustable-rate mortgage corresponds to the conditions of the market. This means that your interest rate will shift from day to day along with the market, and the amount of your monthly mortgage payment will fluctuate along with it.

Fixed-Rate Mortgage

Unlike an ARM mortgage, a fixed-rate mortgage will offer a predictable monthly interest rate that you can rely on. While this can be comforting for many homeowners who are market-weary, it can also end up costing more than an adjustable-rate mortgage by the end of the loan term.

Down Payment

Down payment is one of the most familiar mortgage terms out there, and refers to the amount of money you put down on your home to secure it. While putting 20% down will enable you to avoid having to pay private mortgage insurance, the amount that is required varies from lender to lender.

Private Mortgage Insurance

Often known as PMI, this type of insurance can often be confused with homeowner’s insurance, which protects your home in the event of fires, floods and other damage. PMI, however, is the type of insurance that is required for those who do not put 20% down and is there to protect the lender in case of loan default. For homebuyers who can put down 20% or more, PMI will not be an issue.

The Principal

With the costs involved in interest, insurance and the down payment, it can be confusing to keep all the mortgage fees straight. However, the principal is different from all of these things and is the total loan that you borrow to make your home purchase. When you hear the phrase “paying down the principal”, it refers to the total amount of your loan, without any interest.

There are many terms that may not be familiar to the layman, but there are a few that will be important to know when you’re hitting the real estate market. If you’re currently getting ready to purchase a home, contact Catskill Country Real Estate for suggestion on lenders.

Thinking About Buying a ‘Fixer Upper’? Here’s What You Need to Know

With all of the home renovation and fixer-upper shows on television, the idea of completely renovating and re-doing an old home can seem like an enticing premise. Unfortunately, investing in the wrong fixer-upper can mean an awful lot of expenditure without the added financial rewards. Whether you’re considering investing down the road or are ready to dive in, here are a few things to consider first.

How Much Do You Want To Spend?

It’s easy to be swept away by possibility, but before making an offer you’ll need to sit down and determine exactly what you’re willing to invest into upgrades for your fixer-upper. By deciding what you would want to renovate, what the cost of materials and labor would be and how this figures into the market price of the home, you’ll be able to determine if the price you’re offering will be worth it.

Are Major Repairs Required?

It’s one thing to consider a nice paint job and new tiling in the kitchen, but if there are serious issues with the home, it can create huge financial issues to put money into it. Because foundational issues or water damage throughout the home can be expensive items to repair and will take time and resources, fixing these issues may cost more than the money you’ll make. If you’re uncertain about what you’re getting into, it may be a wise decision to bypass the investment all together.

Are You Willing To Work?

Most home fixer-uppers that people buy can be financially lucrative because the buyer is interested in doing a lot of the work themselves. However, if you’re thinking of hiring people to do the work for you, this can end up costing a lot more money and eating any profits the renovations might have created. It’s also important to realize that renovations can go over budget. Instead of being idealistic about a fixer-upper, ensure you’re certain it’s what you really want so that you’re not stuck with a home you don’t want to invest your efforts into.

The idea of digging in and getting your hands dirty with purchasing a fixer-upper may be endearing, but if you’re not truly prepared for the responsibilities it can be a drain on your time and your finances. If you’re currently considering purchasing a home in need of help in your neighborhood, contact John Kavaller for a frank discussion of possibilities.

Fixed-rate vs. Adjustable-rate Mortgages: The Pros and Cons of Each

Whether or not you’re new to the housing market, you’ve likely heard about low interest rates and are wondering what kind of impact these can have on your mortgage. Both fixed and adjustable-rate mortgages have their benefits and drawbacks, but what will work for you depends on your financial health and knowledge of the real estate market. If you’re currently comparing the pros and the cons of each, here are some pointers on how they can impact your home purchase.

The Security Of A Known Rate

With the relatively low interest rates of the last few years, many people can be enraptured with the idea of a variable rate mortgage that may save them money. However, while a variable rate mortgage can certainly provide a benefit if low interest rates remain in place, a fixed rate can provide the home buyer with the economic security of knowing exactly what their rate is for the entire length of their loan period.

A Lower Mortgage Cost

It goes without saying that there’s a strong benefit in knowing exactly what your mortgage payment will be each month. However, while a fixed-rate mortgage can offer this assurance, an adjustable-rate can actually end up costing you a lot less in the long term. Since mortgage rates will fluctuate over the term of your loan and a lower interest rate means a lowered monthly payment, this can result in a more economical price tag when it comes to your biggest investment.

How Market Savvy Are You?

Many home buyers feel confident enough in timing the market and getting a good price that they aren’t as concerned with the choice between an adjustable and fixed-rates. However, if you’re not savvy when it comes to the real estate, deciding on a variable rate can make a monthly payment difficult if you’re already pushing your financial capabilities. Instead of making a rash decision, ensure you’re aware of your flexibility before deciding which rate option to choose.

There are a variety of benefits on both sides of the equation, whether you choose a fixed-rate or an adjustable-rate mortgage. However, what works best for you can depend entirely on your economic situation and your loan period so it’s important to consider all the variables before making a decision. If you’re currently on the market for a home and are considering all your options, contact John for several lenders who will pre-qu7alify you and discuss the pros and cons of fixed rate and adjustable mortgage products.

Growing Your Wealth: 3 Reasons Why Real Estate Is the Ultimate Long-Term Investment

keyWhile many people may be hesitant to consider real estate as a viable long-term investment, owning property has a steady historical track record and isn’t as volatile as other investment markets can be.

Any investor who hasn’t seriously considered it as an option should take a closer look at the benefits of owning real estate and why it is the ultimate long-term investment strategy.

It Becomes A Consistent Source Of Income

Investing in rental property has the added benefit of being able to show regular returns in the form of rental income. Unlike other long-term investments that require a level of patience in order to profit, real estate can provide a large sum return in the future while still providing financial benefits on a monthly basis.

An Investment That Anybody Can Participate In

Many forms of investment require a level of skill or familiarity in order for first timers to jump straight into it with any level of confidence. Real estate is one investment that anybody can enjoy, thanks in part to the insight that can be gained from family and friends who have gone through the same process.

The level of knowledge that’s required to invest can be gained with some simple investigating to learn more about local areas that have increased in value and the kinds of homes that are popular. John Kavaller can take that information and add to it, providing invaluable expertise to the process.

Consider It To Be A Guaranteed Retirement Plan

Saving for retirement has become harder to commit to as each year goes by. Money being left in a savings account or an easy to sell investment can be dipped into at any point, leaving very little when retirement starts to roll around.

Using property as a long-term retirement plan requires a level of commitment to the investment and upkeep to the property that guarantees there will be something tangible to bank on later in life.

While investing in real estate may seem simple, especially when compared to other investment markets, it’s still recommended to consult with John before making any decisions. He has a level of knowledge about which areas will be the wisest to invest in depending on how long in the future you are looking to sell. Contact John for a substantial conversation about real estate investment FREE.

Buying for Retirement: 3 Reasons Why You’ll Want to Buy Your Retirement Home Before You Retire

retire-1Many people dream of buying their ideal retirement home after their career has come to a conclusion – with all that extra free time it seems like it’d be the most logical time to shop around!

However many real estate professionals strongly recommend that their clients find a retirement property before they’re off the payroll. While it may seem like a big time commitment to find a new home while you’re still busy with your work there are several significant financial benefits to purchasing your retirement home before you actually do retire. Here are our top reasons why.

It Makes Your Mortgage Easy

 When you are employed it is easier to get approved for a mortgage. If you wait until after you retire to buy your retirement home, you may not have the income require to qualify for the mortgage that you need. Don’t limit yourself! Buy while you’re still employed to keep your options open.

It Leaves You With More Spending Money

Buying a new home while you have an income provides you with more security with your expenses, such as mortgage payments and planned upgrades or renovations. Having an income can also mitigate financial stress should you run into any unexpected expenses after closing.

It Leaves You Ready For Reality

You may think you can accurately predict the expenses of your new home, but if you buy the property before retiring it gives you time to get to know the true amounts of your monthly payments. This can help ensure that you have enough saved to retire and live comfortably in your new property, with no surprises for your budget. You’ll be in a better position to create a financial plan once you know the reality of owning your new home.

An Added Bonus: It Can Be An Income Property

If you decide to purchase your retirement home before you retire you don’t have to move into it right away. You can rent it out as an income property until you’re ready to settle in, which will not only help cover mortgage payments but will also allow you to see first-hand what the monthly expenses are for the property.

This will also prevent you from having to deal with a move while working; you can wait until you do finally retire before packing up your current home and moving into your new one.

Ready to find the perfect retirement property? Contact John Kavaller today for more advice to set yourself up for the future.

Feeling Squeezed by Higher Rents? It Might Be Time to Consider Buying Your First Home

Buy NowWith the cost of rent going up across the board and becoming even less affordable in metropolitan centers, it’s never been a better time to seriously consider home ownership. While the price of a home and all the associated costs can certainly seem like a tight squeeze after years of renting, here are some reasons you may want to consider giving up your rental and springing for a home instead.

It’s An Automatic Savings

It’s a sure bet that the money you spend on rent is going down the drain as soon as the month is over, but investing your money into a home each month means that you’re actually putting it into something tangible that you can profit from later on. While there are no certainties that the price of your home will improve, there’s a good chance you’ll stand to make a bit of money in the end that will easily offset the cost of insurance and property taxes involved in buying a home.

The Insecurity Of Apartment Living

With apartments being bought up all the time and torn down to make way for new developments, it’s always a possibility that the day may come when your home won’t be your home anymore. The good thing about using your purchasing power to invest in a home is that it gives you the freedom of feeling like you really have something that belongs to you, and you probably won’t have to worry as much about your loud next door neighbors or a landlord that never completes the required maintenance on your apartment.

You Can Consider A Roommate

An apartment often means a smaller amount of space, but it’s possible that a home purchase may provide you with a little bit of extra room and a place for a renter who can help with the monthly bills. Whether you decide on a friend, relative or someone you don’t know, this can be a great way to make home purchasing a little bit more economical and still provide you with the equity you’ll need to make it a worthwhile, long term investment.

With rent becoming less affordable in so many cities, the idea of purchasing a home is becoming a more tenable reality for many people. If you’re interested in what is out there and are curious about your own possibilities for home ownership, you may want to contact John Kavaller, Broker-Owner at Catskill Country Real Estate.

The Mindful Broker

Mindful-BrokerBeing MINDFUL is extraordinarily important in real estate because dealing with other people’s money– YOUR MONEY– means substantial fiduciary responsibility.

Sellers and buyers should perform due diligence when contemplating which broker to choose for the sale or purchase of real estate. Reading on-line reviews, browsing sales made, and interviewing prospective professionals is just good business.

Is a part time agent suitable and up to the tasks involved? How fast did the agent respond to your request for more information? Is the prospective agent listening to you? Does the broker have a team of well oiled pros ready to dive into your transaction and get it to closing?

Since real estate business is personal, a level of sophistication and friendliness help engender confidence your chosen agent will follow through with your direction and guidance. You may want to rule out an agent who wants to spend your money, instead of suggesting options and waiting for you to decide what works best for you.

Being mindful suggests being aware and having the experience to meet the many challenges involved in the real estate process. Although conceptually, buying or selling appears straight forward, the devil is always in the details; and they can can’t pretty sticky.

You’ll want a broker who is sharp enough to untangle all manner of challenges that often arise during transactions. We have a team in place that takes you from the initial research phase, through negotiations and finding an agreed upon price, home inspections, coordination with attorneys, mortgage people, surveyors, contractors and much more, to owning a property that has deep value and meaning to you and also translates to a good investment.

Catskill Country Real Estate looks forward to meeting you and your needs so your assets are protected, and you get what you want. Call me today for a chat on ways to move forward with your real estate aims.

3 Things You Need to Consider Before Buying That Fixer-upper Home

FlipThe idea of buying a home that will need a fair bit of renovating can seem like a great investment opportunity, but some renovations come with high prices and may actually end up costing you more than you think. If you’re trying to determine whether or not a fixer-upper is worth the cost, here are some important things to consider.

What Will It Cost?

If you’re going into a home expecting a few renovations costs, a minor detail here or there may not add up to much. However, if you’re not interested in spending the big bucks on making changes, you’ll want to estimate an approximate amount of how much the renovations you don’t want to live without will amount to. By including all the necessary labor and materials, you’ll be able to determine if the price-point of your offer will be worth it. Keep in mind that if there are any serious issues with the house, it may not be worth your while to consider the purchase at all.

Will Renovations Increase The Value?

In the event that you’re buying a home for its investment value, it’s going to be particularly important to consider if the renovations required will actually increase its market value. While adding another bedroom or upgrading a bathroom may not add significantly to a home’s overall price, certain more inexpensive improvements like painting, refinishing and new siding can actually add a lot to the look (and worth) of your home.

How Much Are You Willing To Take On?

It’s easy to think that you’re prepared to do the dirty work when faced with a fixer-upper, but getting down to brass tacks may not be so simple when the time comes. Before taking on a home that needs a lot of renovation, consider how much you’re willing to do so that you can determine if fixing it up will even be an economic boon after all the labor that may go into it. If you’re not a DIY kind of person, you may want to avoid a house that has a long list of repairs.

A fixer-upper can be tempting for those who want to invest or save on a home purchase, but you’ll want to carefully consider if it will be a good choice when it comes to selling time. If you’re currently perusing the market for a home, contact John for a few ideas on how to proceed.

Possible casinos in northern NJ, Manhattan could oversaturate market

CrapsBy The Associated Press

Posted Feb. 18, 2016 at 12:55 PM
Updated Feb 18, 2016 at 1:04 PM

Read The Associated Press article here.  Then, consider the following implications for the Montreign Resort and Casino at Adelaar.

If casinos are built in Northern Jersey and perhaps Manhattan, the Sullivan resort scheduled to open in early 2018 could be in serious trouble. The article makes the “over saturation”  and “slice of the pie” arguments.  There is a limited number of gambling folks thus the proliferation of casinos within a short driving radius of the NYS Metro area will simply dilute the customer base.

Goodbye jobs, major development, economic bounce-back, etc for Sullivan County.  This is a nasty prognostication few in our Sullivan Catskill Community welcome.  There is no input to render as to how New Jersey, and the New York State Gaming Commission will react; nor are the cards dealt regarding the business consortiums who make the decisions to build or pass on a casino development.

The implications for investors, as mentioned in my previous blog on this subject, is substantial.  And, that is why a “wait and see” attitude concerning property purchases has been adopted by those who follow casino/business news.  Based on the uncertainly of the Montreign’s ultimate success, residential sellers should be very cautious about pricing and believing there is now a seller’s market underway in Monticello, or for that matter, Sullivan County, NY in the entirety.

 

 

 

Buying a Rental Property? How to Choose Between Single-family and Multi-family Homes

Entering into the real estate market requires time and monetary commitment. Depending on the purpose for purchasing rental property determines whether one should invest in a single family or multi-family dwelling. In either case, one should prepare short or long term goals, be cognizant of his or her financial health and monetary comfort zone, and conduct a comparative market analysis before considering a real estate investment.

Cap

Short Term Versus Long Term Investments

For investment purposes, a multi-family dwelling provides the owner with more potential rental income than a single family dwelling. However, if the purpose is to claim the new location as a future domicile, then investing in a single family dwelling provides the buyer with time for relocating. One should be aware, however, that rentals are not eligible for homestead exemptions. With the exception of Delaware, Pennsylvania, New Jersey, and Rhode Island, all states offer some type of homestead exemption for primary residences. As a result, if changing one’s domicile is part of the long-term goal, then considering the purchase of a single family for a temporary rental, until one is ready to change domiciles, may prove advantageous.

Investment Considerations

One must be prepared for the initial rental preparation. Plumbing and sewage lines must be in working conditions to avoid impending disasters. Adequate electrical service and outlets, in combination with internet access, attract financially secure tenants. If one depends on registered, licensed, and insured contractors to provide the necessary workmanship, one must also be prepared for delays in the delivery of goods, inspections, and completed work orders. If one’s finances are not be stretched beyond his or her monetary comfort zone, then time may present the only obstacle.

Location Versus Location

Any real estate investor must consider location. One should look at the demographics of an area, the percentage of violent versus non-violent crimes committed in an area, and the future plans for development of any surrounding areas. Usually the rating of the local high school will also provide insight into the stability of the surrounding communities.

Consult A Reputable Agent

Before making an investment, one should consult a licensed and experienced real-estate agent familiar with area rentals. The agent should provide information regarding long term versus short term available rentals. In addition, if there are deed restrictions, the agent should provide the prospective buyer with the necessary information.