Information Courtesy of Realtor.com

Pets can be sensitive to change, so you want to provide the smoothest transition possible for all creatures involved. When moving, you’d think that bringing along your pet’s favorite treat to comfort them would be the best way to reassure them on the way to their new home. In actuality, this can make them feel worse. Your Animals may already be coping with some anxiety from all of the changes happening, so stick to their regular foods and eating routines up until the last day, to keep their tummies and nerves at ease!

Now that you’ve mastered the art of keeping your pet calm, cool & collected, its time to introduce the three main points to consider when buying your next home:

• Neighbors
• Space
• Location

If you are an animal lover and your neighbors aren’t… you’ll want to know for sure before making the move! Go ahead and introduce yourself while at the same time, letting them know you have a few pets in your family and assure them that they can come to you if anything becomes intolerable or they have any requests! This is the best way to assure your new neighbors don’t resent you for your fury friends.

Space. If you aren’t the kind of pet owner to take your animals to the park every other day, you’ll definitely want to make sure your new home has plenty of space for your pets to stretch out and release some energy! Look for places that have good walking areas, parks nearby, or just a decent sized back yard where they can have a space to call their own.

This brings us to location, location, location. This is something that you can’t change about a home when you are looking to buy, so you want to make sure all of the resources you need regularly are within close proximity. This includes pet stores! Save yourself the travel time and energy it takes to get to the opposite side of town when you need to pick up supplies for your pet. By working with an Agent, they can show you homes in a neighborhood near all of your favorite places, that you might not have known about.

Ultimately, we want your pets to love their new Home as much as you do. Follow these steps, and rest in peace knowing that your pet will be happy and healthy. Now…time to unpack!

In the world of lending and borrowing, there is an extensive amount of information that must be absorbed in order for real estate buyers and sellers to understand and make it through the process without a scratch. As a seller of real estate, one has to hope that the potential buyer is capable of attaining financing and receiving that notorious letter of acceptance from the bank or else the deal falls through. Buyers have the real job-finding a lender that will offer the best payment plan with the best interest rate possible, because even a single percent lower on a rate can save a buyer thousands of dollars over the years of the note. So when a buyer sets out to figure out how they want to tackle this feat, they approach the lenders and realize that there are options when it comes to a home mortgage loan.

One of the options that a lender will present to a potential real estate buyer is the Adjustable Rate Mortgage, often called an ARM. Some individuals consider this route of financing risky as the interest rate could rise, while others find it a convenient way to get into a low rate mortgage early with the option of future refinancing. ARMs dictate a periodically changing interest rate through the life of the loan, usually based on the prime rate in the financial index. As stated previously, the golden ticket in this type of loan is the fact that the ARM usually begins with a lower interest rate than a standard fixed rate mortgage. This feature is designed to attract borrowers who may not otherwise apply for financing.

A low beginning interest rate can save the buyer thousands of dollars in the first years of the note, and the major point of the ARM loan is the fact that it has the ability to stay lower than other loans over time if rates stay low or decrease through the years. The cons side of an ARM is the elevated risk level. Remember, this is an “adjustable” rate mortgage, meaning the rate can stay low, but it can easily rise if normal interest rates begin to head up. Often, on some ARM loans, the initial interest rate is good for only the first year before being adjusted, so it’s vital to everyone that this be understood in the beginning. A good ARM will have a cap on the interest rate increase from period to period (and all have a ceiling on rate increases over the life of the loan), which limits the levels of risk for the borrower.

On the other hand, a Fixed Rate Mortgage features an interest rate that is unchanging and ensures the payment never changes. A 30 year fixed rate is the most common note, though 15 and 20 are often written in the interest of an earlier payoff. Though a fixed rate loan may have a slightly higher interest rate than an ARM, the key benefit is that this type of loan offers stability and regular predictable payments over the years with no surprises. Fixed rate mortgages are the best choice for buyers who plan to live in the property long term, possibly throughout the life of the note and if their income stays the same (or increases). Some people simply need the peace of mind that their payments are always consistent and unchanging.

When a borrower is considering the type of loan they need to acquire from a lender, there are some important questions that must be addressed before a decision is met. The borrower must have an idea how long they plan to own their home, must have a good outline of other financial obligations that could affect payment methods (with the understanding that these obligations usually increase), and if and when interest rates do rise, will the income rise with it to sufficiently cover the higher payments? If some of the answers to these questions are shaky and uncertain, or a buyer plans to definitely stay in the new property long-term, then it’s likely that they will go with a good 20 or 30 year fixed rate mortgage.

With the value of homes and properties generally increasing in most cases across the country, homeowners can take advantage and use home equity loans to finance large purchases that they might not otherwise be able to afford. College tuition for a son or daughter is one of the most sought out needs for funding, as is major home remodeling and a long list of other major expenses. Home equity rates have always provided homeowners an alternative method of borrowing money for large costs and are based on the difference between the value of a home and the mortgage balance.

Some examples of equity are: A home appraised at $150,000 that has a mortgage with a $110,000 balance has $40,000 equity, which can be borrowed on for things such as the college funding or home remodeling. A home appraised at $90,000 with a $45,000 mortgage balance has $45,000 equity. Sometimes, the amount of equity is not only based on how much the value of the home has appreciated, but how long the borrower has been paying down the principal, thus creating more equity and leverage. Owning real estate is usually a very good investment that creates a valuable asset, usually purchased with a small down payment. As the home appreciates, the investment appreciates-eventually, the appreciation value is larger than the original down payment, creating amazing leverage.

On the other hand, if the property value decreases, so does the leverage. An example of property appreciation would be if the property appreciated 15% in the first year. A $100,000 home is now worth $115,000. If the original down payment was $10,000, the equity increased 150%, giving the buyer leverage from $10,000 to $25,000! And, hopefully, growing! But the flip is also true. If the value of the property decreases 15% in the first year, the home is now worth $85,000 rather than the initial $100,000. This would be considered one of the proverbial “rock and hard places”, giving the homeowner a difficult time if needing to sell the property and trying to just break even. Leverage is everything in home equity and decisions must be carefully made before securing financing, whether it be for an initial home mortgage or a home equity loan. The best way to avoid disaster in investing in real estate is to do the most research possible before making a purchase.

Home equity loans require knowledge of several key points. First, most equity loans are similar to Adjustable Rate Mortgage loans (ARMs), as they are variable interest rate loans, but offer a nice low introductory rate. There are fees involved, such as ongoing transaction fees, which are charged every time money is borrowed on the note. Expenses, such as application fee, title search, appraisal fee, attorney fee and other should be considered in this type of loan also. Sitting down with the lender and going over each of these points (and more) is key to a successful and knowledgeable transaction. Overall, getting the best rate is most important, and lenders all around are competing aggressively to provide that.

When it comes to lending and borrowing, there seems to be a library of information and facts one needs to understand before even beginning the process. Broken down, however, this information is easily understood and categorized for clarity’s sake. In mortgages, there are basically two major choices, the Fixed Rate Mortgage and the Adjustable Rate Mortgage (ARM). A fixed rate is an interest rate that remains fixed for the life of the loan, whether it is 15, 20, or 30 years. Adjustable rate refers to a loan that usually features an initial low interest rate (usually for the first year) and often are adjusted on a regular basis after that first year depending on the market rates. Some of these ARMs will have a cap from period to period and by law all of them must have a ceiling on rate increases. This limits the level of risk a borrower is assuming when acquiring this kind of loan. A borrower who intends to live in the property long term and favors peace of mind will likely choose the fixed rate, while another borrower who doesn’t mind a little risk and may sell within a few years might go with the ARM.

As far as loan amounts are concerned, there are two types: conventional and jumbo, depending on the amount borrowed (this amount is reviewed annually). There are also several other types of ways to finance a loan. A Balloon Mortgage is a loan that usually offers very low rates for 5, 7, or 10 years, after which the final payment is due or refinancing is set up. A Blanket Loan is a loan where more than one property is offered for collateral. An Interest-Only Loan is an option that allows the buyer to pay only the interest in the monthly payments for a term (5-7 years typically), and then the options roll in: refinance, pay the balance, or begin paying on the principal. A Hard Money Loan is a type of non-bankable loan that is approved based upon the value of assets, usually equity and other assets (and have a generally higher interest rate). A Package Loan involves securing the cost of both real and personal property. For example, the cost of the new home and all major appliances. This is a popular method of borrowing as it saves time and energy for the buyer who has all of this to do regardless.

Other kinds of loans include the Reverse Mortgage and the Wraparound Mortgage. The reverse mortgage is designed so that the borrower can receive money from the lender in installments, usually monthly with the property being collateral. The borrower will pay all property taxes, insurance and maintenance costs, while not having to pay back the cash advances until the end of the loan. The wraparound mortgage, also called the all-inclusive trust deed, gives the buyer the option of purchasing property without qualifying for a loan or paying closing costs. In this loan, a second mortgage is added to the first, basically meaning that the new mortgage includes the unpaid balance of the original mortgage. Of course, no matter what type of mortgage or loan is secured, other costs and fees are usually applicable, such as closing costs, entry fees, exit fees and administration fees. All properties require mortgage insurance and it is always in the best interest if the potential buyer to pursue multiple competitive quotes before deciding on a lender and type of loan.

Adjustable Rate Mortgage (ARM): A mortgage loan which adjusts to changes in interest rates. As rates change, ARM monthly payments increase or decrease determined by the lender, but generally subject to a maximum/cap.

Annual Percentage Rate (APR): A rate calculated using a standard formula. Shows the total cost of a loan – interest, points, mortgage insurance, and other fees associated with the loan.

Assumable Mortgage: A transferable home loan (from seller to buyer). There may be a fee with the transfer.

Balloon Mortgage: The balloon generally offers low rates for 5, 7, or 10 years; then the balance is due or is refinanced by the borrower.

Closing (settlement): The property is formally sold and the title is transferred to the buyer; who is responsible for the loan obligation.

Closing Costs: In addition to the property sale price to cover the transfer of ownership at closing and are detailed to the borrower after a loan application is submitted.

Conventional Loan: A mortgage not guaranteed or insured by the U.S. government.

Credit Score: A number based upon credit history, used to determine ability to qualify for a mortgage.

Down Payment: Not part of the mortgage, generally 20% of the home’s purchase price paid prior to the loan commences.

Equity: The market value of the property minus the amount still owed on the mortgage.

Escrow: A neutral third party or account to hold documents and/or money for a real estate transaction. Ensures all conditions of the upcoming sale are met.

Fixed-Rate Mortgage: A home loan with a fixed interest rate; consistent payments throughout the life of the mortgage.

Home Equity Line of Credit: Generally a set second mortgage loan that allows the borrower to obtain cash drawn against the equity of the home.

Interest Rate: The percentage of interest charged on a monthly loan payment.

Lease Purchase: Designed to assist low-to-moderate-income buyers – first they lease a home, then they can exercise an option to buy. Rent = monthly rental payment + additional money credited to a down payment account.

Lock-in: A specific, guaranteed interest rate if the loan is closed within a specific time.

Mortgage: A lien on the property that secures the legal document outlining loan terms and obligations.

Mortgage Insurance: An insurance policy that protects lenders against a mortgage borrower default; primarily required for borrowers with a down payment of less than 20% of the home’s purchase price.

Offer: Generally a written tender by a potential buyer – indicating willingness to purchase a home at a specific price.

Private Mortgage Insurance (PMI): Affordable mortgage insurance programs for qualified borrowers with down payments of less than 20% of a purchase price.

Pre-approval: A lender commitment to lend to a potential borrower, as as long as the borrower continues to meet the qualification requirements at the time of purchase.

Prepayment: Full payment of a loan before the scheduled due date. In some cases, a prepayment penalty could apply.

Principal: The amount borrowed from a lender without interest or any additional fees.

Refinancing: A mortgage refinancing pays off one loan by obtaining another, generally done to secure better a interest rate.

Sweat Equity: Trading labor to build or improve a property as part of the down payment.

Title: Ownership of real property to the exclusion of anyone else’s right to claim the property.

Title insurance: Insurance that protects the lender or home buyer against any outside claims to ownership of the same property. This situation can actually happen if the person selling you the house does not actually own it. Most often this occurs due to faulty paperwork in some sale of the house in the distant past.

Title Search: Public record search to ascertain that the seller is the real owner of the property and there are no other claims against the property. Balloon Mortgage: The balloon generally offers low rates for 5, 7, or 10 years; then the balance is due or is refinanced by the borrower.

There are exceptions to the PITI, such as the interest-only loan. In this case, only interest is being paid and not principal. The balance of the note is not being paid in this instance. One thing every buyer must consider in regards to making payments is called negative amortization. This begins to happen when the principal balance begins to grow rather than shrink. Negative amortization can begin when interest rates begin to go up on an adjustable rate mortgage and only the minimum monthly payment is being made. Basically, the amount of the mortgage will increase if the payment is not covering the owed interest, which results in the unpaid interest being added directly to the principal balance and thus creating a growing debt. It is in the borrower’s best interest to pay more on each monthly mortgage payment to avoid this disaster from beginning.

When economic times allow, interest rates become favorable and many homeowners take advantage by refinancing their mortgage and saving a large sum of money over time. This is a trend that is hugely popular and offers a source of credit for uses such as rebuilding credit, funding large expenses such as college tuition, debt consolidation, or simply for building leverage. Many homeowners will take advantage of refinancing their mortgage rather than taking out a home equity loan because they can secure a lower interest rate than they might have previously held and end up paying less over the lifetime of the loan. For example, if a homeowner owes $85,000 on the current loan at 4.5%, they might be able to borrow $125,000 on a refinance with a rate of 3.9%. They can use the difference for a major expense and lock in a much lower interest rate in the same deal, saving money over time. As always, when venturing out to find a lender, either for an first mortgage or a refinance, it is always best to seek out rates from up to four lending companies to ensure the best rate possible. If a homeowner with a current mortgage is seeking a possible refinance, they should get quotes from three other lenders before going back to their first lender and seeing if they can beat those rates. The original lender already has the business from the first deal and is less likely to offer a competitive rate unless presented first with offers from others who may essentially “steal away” their current client.

When you set out to look at houses and acquire the help of a professional and knowledgeable real estate agent, you have to know if the homes you are looking at are worth the prices the sellers are asking. This is a tedious but important part to buying a new home and it could be easy to overpay for a piece of property. A home appraisal is a review of a house that determines a house’s actual market value. Your agent makes their living understanding market values and how to sell houses, so make good use of their expertise in this regard.

A formal home appraisal is a further step where a trained professional comes in and looks at a house to determine a formal valuation of the property. This cannot happen until you have applied for financing with your lender. This all follows the accepting of the offer by the seller and a purchase agreement is signed. The formal appraisal will be ordered by your lender to act as a neutral third party to assess the true value of the home. This protects their interests in case the buyer defaults on the loan in the end.

If a buyer defaults on a mortgage, the lender must take possession of the house and sell it immediately. The formal home appraisal will give them adequate information to help them do this. Their goal is to create a loan that is less than that value, so that in cases of repossession, they can sell the house to make up for the loan and the money it took for expenses of reselling. This is their biggest order to the buyer and once they are reassured of the value of the home, the commitment letter is that much closer to finalization. As always, apply to multiple lenders for a loan to maximize the best possible interest rate, which will save you thousands in the years to come over the period of the mortgage.

Acquiring the services of a home appraiser (or surveyor), whether it is by yourself or your lender (usually both) is key to providing everyone with accurate market information about the value of your potential home. Without this information, the bank has no idea what to loan you and you have no idea if you’re receiving a good deal or being ripped off. This is just one of the many legal checks and balances set in place to make the business of dealing in real estate fun and fair for every party involved.

Providing the deposit required by the seller is a small price to convey that you as a potential buyer are serious about the offer and intend to proceed should the seller accept the deal. It is usually a very small percent, often times a thousand dollars. Failing to follow through with the offer results in forfeiture of the deposit (which the realtor usually keeps). Negotiating an offer is a standard and expected practice in the dealing process. It is common for a potential buyer to offer less than the asking price, which is often countered by the seller until either an agreeable price is reached or one of the parties declines completely. Even before a price is accepted or declined, the initial offer give the buyer the opportunity to have a professional home inspector come in and check the place out.

The home inspection will provide the buyer with accurate information on the property and inform of any potential hazards or hidden issues that need to be resolved. At this point, if a price has been agreed upon, the buyer will ask the seller to repair the problems the inspector brought to light. After these are worked out and the inspector gives his thumbs up, you’re off to the next step (assuming you don’t decide to back out of the deal because the seller didn’t live up to the requirements). The second contingency of the original offer means that you as buyer must obtain financing, proving in the end that you can pay for the house as part of the deal. After financing, the last contingency will be to do a title search on the property to prove that the seller really does own the house and that it is clear. At times, this search can produce results that the seller has unpaid taxes in the past and the such.

In most cases, from offer to close, the process usually goes very smoothly. It is a scenario that happens many times a day and these professionals are very good at what they do, so don’t be afraid to take advantage of the expert resources available at your disposal. But it all begins with the offer. This is crucial in the scheme of the whole deal. This is where you will commit to the final price you are willing to pay and what comes with the deal. Don’t be afraid to negotiate!

A real estate agent is a wise choice when deciding to go house shopping. An agent can help quickly find the right home for you as a buyer and at the very least point you in the right direction. After viewing homes and deciding on one that suits your needs and wants, it is time to make an offer. Doing this requires a standard legal form that entails aspects of the deal such as price, what does or does not come with the house, and contingencies (house inspection and loan). Most sellers require a deposit to secure the offer, which shows seriousness on your part. This is a point of negotiations where the price may be adjusted as well as other amenities. Only be careful as to not upset the seller in the process-if they have other offers that are very competitive to yours, they’ll be easy to let the deal slip away from you.

Assuming the seller accepts the offer, a sales contract called a Purchase Agreement or Purchase and Sales Agreement is drawn up. A real estate attorney is beneficial in this case to handle the legal issues and make sure both buyer and seller are playing fair. But there is still much to accomplish before the home is yours and everything is settled. The next big step, and invariably one of the most important, is hiring a professional inspector to come in and look at the home and property. This is also required by the lender to ensure the property they are loaning the money for is worth the price. It is only on a rare occasion when the inspector finds something that is monumentally devastating to the sale of the house.

Once the home inspection is finished, the loan commitment follows from the lender. Other steps that will be followed will include a title search, pest inspections, safety tests, etc. Once the loan is secured, a date is set for closing. Before this date, you must have your home insurance secured and ready to prove before that date. When that notorious day comes to finally close, every loose end is tied and the sale is complete. You will sign many documents and bring a certified check to cover closing costs and down payment. The house is yours!