Did you join real estate expert Ilyce Glink on the last Live Chat? If you missed out, here’s an excerpt with common questions about qualifying for a mortgage and paying your mortgage. Sign up for the next Live Chat on the Equifax Facebook page.
Q: Is it possible to double mortgage payments without paying a penalty?
IG: Yes – you can prepay your mortgage typically without paying a penalty. Prepayment penalties kick in if you, first, have one attached to your mortgage. And, second if you have one and pay off within the prescribed time, usually 2 to 4 years. Everyone else can prepay to their hearts delight – and I generally recommend it.
Q: When is the best time to refinance my home’s mortgage?
IG: If you have equity and will stay for another 5 years, now is an amazing time to refinance. 30-year rates are about 4.6 percent.
Q: I know ARM mortgages aren’t popular. But it’s the only way I can buy now while I’m still in school. I know I’ll be making more money in a few years when I’m out. What do you think? Is it possible to get an ARM that will only increase a little?
IG: Adjustable Rate Mortgages (ARMs) are extremely affordable, but they’re really risky. They are limited to going up 5 or 6 percent, but if you start at 4 percent, you could be staring at a 10 percent loan down the line. Yuck! I think you should buy a lower-priced home. In a few years, we could have hyper-inflation and then you’ll really be stuck.
Q: My credit sucks and I don’t have much for a down payment, but I have a good job and steady income. Any chance I could get approved for a loan?
IG: If you have bad credit, you won’t get approved for a loan in today’s lending environment. It just depends on how low it is. If you have a lot of cash for a down payment, that would help. But with a low credit score and no down payment, you’re better off waiting a year until your fortunes improve. Don’t worry – home prices will still be REALLY low in a year.
Q: In addition to the mortgage payment, what other costs do I need to consider when owning?
IG: If you’re buying a home, you should think about mortgage, real estate taxes and homeowners insurance. That’s for starters.
Then, there is annual maintenance and improvements to keep the home in good shape. That’s light bulbs, new filters, having the HVAC guy come and keeping the garden in good shape.
Q: I am thinking about selling my home myself. Can I list it on FMLS if I don’t have an agent?
IG: You can list your home on the local multiple listing service if you go through a service like ForSaleByOwner.com. They give you an option to list the property. There are also brokers who will allow you to unbundle their services and pay for whatever you want.
Q: If my buyer has an agent and I don’t, do I have to pay the buyers agent? I just got transferred to another state for work and I’m trying just to break even since the home values have decreased in my neighborhood.
IG: If your buyer has an agent, you might want to cut a deal with the agent to pay a half commission. I’ve done this and it works pretty well. You’ll probably be able to work this into the deal.