Charlottesville Real Estate

Charlottesville Real Estate Finance FAQ

Below are some of the frequently asked questions that are posed by Charlottesville homebuyers who are new to the process of buying a home:

What is a mortgage?

A mortgage is a loan used to buy a home or other real estate property, with the home serving as the collateral for the loan, acting as the guarantee that the loan will be repaid.

What’s in a payment?

Payments are comprised of principal, interest, property taxes, and possibly mortgage insurance. In the cases of condominiums, maintenance fees may apply as well. However, the real question is: how much can you repay over how many years? Consider how quickly you could repay your loan. Is it 15 years, 20 years, 25 years, or 30 years? Typically, the sooner you repay the loan, the more you’ll save on interest payments. However, the longer you extend the term of your financing, the lower your monthly payments may be. When choosing a loan term, consider your budget, your long-term spending patterns, your income over the life of the loan, and how long you plan to stay in your home.

What is a fixed rate (mortgage)?

The interest rate is set for the full length of the loan and doesn’t change. Therefore, since the monthly mortgage payment for principal and interest stays the same for the life of the loan, it’s easier to plan a budget using this sort of loan.

What is an adjustable rate mortgage (or ARM)?

An adjustable rate mortgage (ARM) usually starts with a lower initial interest rate than traditional fixed rate loans. After a set initial payment period—anywhere from one to 10 years—the interest rate may change periodically based on market conditions. As the rate changes, so does your monthly payment.In addition, ARM loans feature an adjustment “cap” that limits how much the interest rate can go up, protecting you from large increases in your monthly payment. If you plan on being in your home for a shorter period of time, or expect your income to increase over the years, an ARM loan may be right for you.

What is the property appraisal?

A professional appraisal is done to determine the value of the home or other type of real estate. An appraisal is based on the home’s condition and selling prices of comparable properties in the area.

What is the best mortgage for me?

The best mortgage is one that you can afford without cutting in on other necessities, and has interest rates and terms and conditions that give you peace of mind. Click Here to gain a better idea of which mortgage is the most affordable for you.

How much will my mortgage be?

The size of your mortgage and the monthly payments that you will incur are determined by the price of your home minus the down payment, spread over the term of the mortgage at the interest rate chosen.
If you are considering purchasing Charlottesville Real Estate, contact me today–I am happy to help!

Tags: Charlottesville market update, charlottesville mortgage, Charlottesville Real Estate

Mortgage Rates Fall; 30-Year Remains Under 4% – WSJ.com

By MIA LAMAR And MELODIE WARNER
Home-mortgage rates in the U.S. fell slightly over the past week as the 30-year fixed-rate mortgage has averaged at or below 4% for the fourth consecutive week, according to Freddie Mac’s weekly survey of mortgage rates.

“Mortgage rates eased slightly this week with fixed-rate loans hovering above all-time lows and [adjustable-rate mortgages] reaching a new nadir,” said Freddie Mac chief economist Frank Nothaft.

The 30-year fixed-rate mortgage averaged 3.98%, down from 4% the previous week and 4.4% a year ago. Rates on 15-year fixed-rate mortgages averaged 3.3%, down from 3.31% a week earlier and 3.77% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.91%, down from 2.97% last week and 3.45% a year ago. One-year Treasury-indexed ARM rates averaged 2.79%, down from 2.98% in the previous week and 3.23% last year.

To obtain the rates, 30-year and 15-year fixed-rate mortgages required a 0.7-point payment. Five-year and one-year adjustable rate mortgages required an average 0.6-point payment. A point is 1% of the mortgage amount, charged as prepaid interest.

Mortgage Rates Fall; 30-Year Remains Under 4% – WSJ.com.

What’s First? The House or the Mortgage?

Most people get it backwards. They shop for a home, THEN, they try to structure the financing for it. They make the emotional decision of buying the home of their dreams, THEN, try to apply logic in how they pay for it. Many even go “online” and play with what is affordable by underwriting standards without TRULY considering their future.

I am always fascinated by mortgage underwriting “standards” when they don’t even take into account some very large variables that affect an applicant’s cash flow, and thereby, their ability to repay the loan or maintain a lifestyle they want:

Are you single or a family of six? Costs for food and clothing alone are very different.
Do you live in a state that requires State Income Tax or not? Another significant part of the equation.
How often do you like to eat out or vacation? Are you willing to sacrifice these things for a bigger or nicer home?
Falling in love with a home without considering the REAL impact on your lifestyle is a recipe for unhappiness….either in re-adjusting to a “lesser” home or disappointment over the lack of vacations or nights out.

My advice is to first work on your financing. Go the logic route. Find out what you can afford from a lender’s underwriting perspective, but then, spend some time considering the the cash flow realities of your choice. Work with your loan officer to make wise choices.

Additionally, your loan officer should be advising you on ways to properly represent and transfer your assets, how to explain and document your income, as well as, assisting you in methods to get your optimal credit score. This counsel can be invaluable in smoothing out some of the bumps in the mortgage process, besides giving you the best chance to get the most aggressive pricing available.

To me, the choice is crystal clear…the mortgage before the house!
Written By: Dean Hartman
Link to artcile:
What’s First? The House or the Mortgage?#more-9304.

Emergency Homeowners Loan Program

HUD is administering $1 billion Emergency Homeowners Loan Program to provide assistance — for up to 24 months– to homeowners who have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition and are at risk of foreclosure. The EHLP offers a forgivable, deferred payment “bridge loan” for up to $50,000 to assist eligible borrowers with their mortgage arrearages and payments on their for mortgage principal, interest, mortgage insurance premiums, taxes and hazard insurance for up to 24 months.

HUD has delegated key program administration functions to NeighborWorks America – an experienced and highly regarded national network of affiliated housing counseling agencies. Those functions include coordinating intake counseling, document preparation, and outreach.
West Virginia has $8,339,884 and Virginia has $46,627,889 to help struggling homeowners through EHLP.

Homeowners’ best course of action is to contact www.FINDEHLP.org or 855-FIND-EHLP (346-3345) to be connected with a local housing counseling agency assisting to administer the program.
Housing counseling agencies funded through the Emergency Homeowners’ Loan Program can provide information and assistance needed to apply for the program. Pre-Applicant Screening Worksheets are due July 22, 2011.

Mortgage Rates Decline – WSJ.com

Mortgage rates declined in the latest week, with the average rate on 30-year fixed-rate mortgages edging lower, according to Freddie Mac’s weekly survey of mortgage rates.

“Mortgage rates followed Treasury bond yields lower this week amid weak local economic data reports on business conditions and house prices,” said Freddie Chief Economist Frank Nothaft. Mortgage rates generally track Treasury yields, which move inversely to Treasury prices.

Rates have slumped for months, setting record lows in the process, as yields on Treasurys slid amid economic uncertainty. But yields began to rise at the end of August. Mortgage rates generally track the yields, which move inversely to Treasury prices.

The 30-year fixed-rate mortgage averaged 4.78% for the week ended Thursday, down slightly from the prior week’s 4.8% average and 5.06% a year ago. Rates on 15-year fixed-rate mortgages were 3.97%, down from 4.02% in the previous week and 4.39% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.51%, down from the prior week’s 3.61% and 4% a year earlier. One-year Treasury-indexed ARMs were 3.15%, down from 3.16% and 4.25%, respectively.

Click here for the full article: Mortgage Rates Decline – WSJ.com.

Written By Nathan Becker

Tags: charlottesville mortgage, Home Mortgage