What is PMI?

If you’re preparing to make the transition from renter to first-time homebuyer, you’ve undoubtedly been told by wide-eyed veterans of the homebuying process (or renters who equate homebuying with certain poverty), “Watch out for that PMI.” PM what? PMI, as in Private Mortgage Insurance. It’s a fact of life for homebuyers who put down less than 20 percent on their homes (and with home prices on the rise, that’s most of us). From the lender’s perspective, PMI is a necessary protection. For homebuyers, it’s not likely to be the deciding factor that causes financial ruin; after all, you’ve got your principal and interest, which can make your PMI look like pocket change.

Nevertheless, first-time buyers often experience trepidation when they see that mortgage payment on paper for the first time, so the addition of a PMI isn’t a welcome sight. In short, the PMI adds a weighty cherry to the top of an already overwhelming sundae.
So how exactly does PMI protect your lender? First, let it be said that PMI was designed strictly for your lender’s protection and not yours.

 

Written By: Courtney Ronan. If you would like to continue reading, click here.

What You Should Look for When House Hunting

If you’re shopping for a home and can afford to buy one, you couldn’t be in a better position right now. In many parts of the country, housing inventory is high and both home prices and interest rates are low and as a buyer, you can take advantage of that.

With so many properties on the market, you can probably take a more leisurely approach to house hunting without getting into a fast-paced bidding war. There is a caveat, however. The best homes priced properly for the market conditions will always be in higher demand.

As you begin your search for the right home for you, it pays to keep in mind things you need to check carefully so that they don’t cost you big bucks in the long run.

 

Written By: Diana Lundin. If you would like to continue reading, click here.

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What Do Home Buyers Want?

What do home buyers want in a new home?
According to AVID Ratings Co., some of the must-have amenities in a new house are home offices and green features.

Home buyers are willing to give up devoted space to home theaters and other specialized media rooms in order to have a home office. In fact, they’d be willing to forego a formal dining room altogether in order to have a home office or study.
And they want energy-efficiency in their appliances, windows and insulation.

Other desirable features are large kitchens with an island, though granite countertops aren’t necessarily important to all buyers.

 

Written By: Diana Lundin. If you would like to continue reading, click here.

Trying to Buy A “Diamond In the Rough?

The paper said “diamond in the rough.” Which means either it needs lots of work or perhaps just a little TLC. But exactly how “rough” can a house be before a lender decides the collateral is not healthy enough to issue a mortgage? And what happens if you want the seller to fix something before you’ll close the deal?

Upon contract, one of the first things you’ll want to do is have the home inspected for structural integrity, defects and potential problems. Note, this is not the function of a licensed appraiser who determines the market value for the home. A home inspection helps to ascertain the overall “health” of the house you’re about to buy. A bad roof, leaky plumbing or wood rot can usually only be found when a house doctor crawls through the attic, under the house and on the roof. If there are major problems found, potentially it can stop the deal dead in its tracks. That’s why most lenders won’t order appraisals on properties until an inspection has been performed.

 

Written By: David Reed. If you would like to continue reading, click here.