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If you are looking to buy or sell in the current Reno-Saprks real estate market it's important to stay up-to-date on the current and often changing market conditions. In my latest podcast, I am joined by Elena Boland from Wholesale Mortgage to discuss the essential real estate trends from May 2024 and what that means going forward. We cover key topics such as median home prices, current mortgage rates, and effective selling strategies.
Whether you're a first-time homebuyer or seasoned in the real estate game, navigating the terrain of home loans involves grasping various elements—from prevailing interest rates and contractual specifics to the array of loan options tailored to your needs. In this blog post, we've compiled a vital glossary of loan and lending terms to equip you with foundational knowledge for a smoother journey through the process of purchasing a new home.
Term. Mortgages are generally available at 15-year, 20-year, or 30-year terms. In general, the longer the term, the lower the monthly payment. However, shorter terms mean you pay less interest over the life of the loan.
Fixed vs. adjustable interest rates. A fixed-rate allows you to lock in a low interest rate as long as you hold the mortgage and, in general, is a good choice if interest rates are low. An adjustable-rate mortgage (ARM) usually offers a lower rate that will rise as market rates increase. ARMs usually have a limit as to how much and how frequently the interest rate can be increased. These types of mortgages are a good choice when fixed interest rates are high or if you expect your income to grow significantly in the coming years.
Non-traditional mortgages. Also sometimes called “exotic,” these mortgage types were common in the run-up to the housing crisis, and often featured loans with low initial payments that increase over time.
Balloon mortgage. This is a form of non-traditional financing where your interest rate will be very low for a short period of time—often three to seven years. Payments usually only cover interest so the principal owed is not reduced. This type of loan may be a good choice if you think you will sell your home at a large profit in a few years.
Government-backed loans. These loans are sponsored by agencies such as the Federal Housing Administration or the Department of Veterans Affairs. They offer special terms, including reduced interest rates to qualified buyers. VA Loans are open to veterans, reservists, active-duty personnel, and surviving spouses and are one of the only options available for zero down payment loans. FHA loans are open to anyone, and while they do require a down payment, they can be as low as 3.5 percent. Drawbacks include a slower loan process and—for FHA loans—the need to pay mortgage insurance.
As the housing market shifts, so do lending practices. A mortgage broker—an independent professional who acts as an intermediary between you and lending institutions—may be able to help you find a better rate than you can on your own. Also, be sure to shop around; slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment.
It is important to do your research and understand what options are available for you. Many home buyers do not take the time to get prequalified for a new home loan. They also often do not take the time to shop around to find the best mortgage for their particular situation. It’s important to ask plenty of questions and make sure you understand the home loan process completely. You can learn even more about the process pre-approval process and what to expect here.
If you would like to learn even more about lending and home loans, our local market, and the entire real estate process, we have many videos with local experts available. Just visit our YouTube Channel and be sure to subscribe to our channel for the latest real estate videos.
As we get ready to welcome the month of April, lets take a look back at the Reno-Sparks real estate market in March 2024. I recently sat down with Brian Cushing from American Financial Network to provide a comprehensive overview of the March 2024 real estate market in the Reno-Sparks area on my podcast.
ALTA statements, or American Land Title Association Statements, play a crucial role in real estate transactions. These statements are designed to provide transparency and clarity regarding the financial aspects of a real estate deal, ensuring that all parties involved have a comprehensive understanding of the property's financial history and the credits and debits in a real estate transaction. In this blog post, we will explore the significance of ALTA statements, their components, and why they are essential in real estate deals.
Whether you own your home or are in the process of purchasing a new home, understanding property taxes is a key piece of the real estate puzzle. Property taxes directly affect homeowners and property investors. Understanding this process is crucial for homeowners in Washoe County, as it is not only a financial responsibility but also an essential aspect of informed homeownership and real estate investment. Let's delve into the key insights shared during our enlightening conversation.
Home loans are used to finance the purchase of a new or existing home. There are several different types of home loans available, each with its own unique set of features and benefits. In this blog post, we will discuss some of the most common types of home loans.
One of the most common questions that buyers have is: What is mortgage insurance and when do I have to get it? In our podcast we sat down with Elena Boland, of Wholesale Mortage, to learn more details. Mortgage insurance is essentially an insurance against loss, paid as a monthly fee when putting anything less than 20% down on most loan types. These fees are paid into entities such as government reserves or private mortgage insurance reserves that help pay for foreclosures or back up any losses for banks.
With mortgage rates doubling in the last 12 months, buyers are scrambling to find lower-rate options to buy a home. One option is an adjustable-rate mortgage, also known as ARMs. An adjustable-rate mortgage is a home loan with an interest rate that can fluctuate periodically based on the performance of a specific benchmark. ARMs generally have caps that limit how much the interest rate and/or payments can rise per year or over the lifetime of the loan.