Serving the North Shore, South Shore & Metro Boston Areas

Seven Money-Saving Secrets You Can Use When You Buy A Home…

May 6, 2015 by

1. Choose a low down payment loan.piggybank

There is no law that says you MUST put 20% or even 10% down. There are some loans that require as little as 3% or even zero down. This is attractive for three reasons: It’s hard to save for a large down payment, you could earn more interest on that money than you’re paying in interest on the loan, and it’s nice (and sometimes necessary) to have cash on hand after buying a home.

2. Have someone give you money to pay closing costs.

A relative, church or nonprofit organization can give you money for closing costs. Cash gifts from wedding gifts can also be used.

3. Ask the seller to pay some of your closing costs as part of your offer.

Sellers are usually allowed to contribute to a buyer’s closing costs.

4. Do not pay too much insurance at closing!

Most Lenders require 14 months hazard insurance paid at closing, so be ready. What happens to that extra money? It sits in your escrow account until you sell the house. It’s safe there, but it often earns no interest.

5. Remember, the homes that you’re looking at don’t belong to your agent.

You must be straightforward about your likes and dislikes in order for the agent to do the best job for you. Your agent should show you everything available that meets your requirements. Don’t make a decision on a house until you feel that you’ve seen enough to pick the best one. Review the Multiple Listing printout with your agent to make sure that you are getting a COMPLETE list.

6. Shop around for your home insurance.

A little shopping might help save you money.

7. You can deduct money paid for discount points from your gross income before computing your tax.

See a CPA for more information.

Filed Under: Articles Tagged With: , , , , , ,

What It Helps To Know About Interest Rates, Points, And The “Mysterious” APR

July 20, 2012 by

When you get a mortgage, there are three important terms for you to remember.

  • Interest      Rates
  • Points
  • APR

I’ve combined these three terms here because they’re related, and you’ll understand them better if I explain them together.

Interest Rate:  “Interest Rates” are the price that Lenders charge for the use of their money.  So, when interest rates are high, it’s because Lenders are charging you more to use their money right now.

Again, it’s a trade-off between now and later.  Lenders are only going to give you so much money to use over the next 15 to 30 years (the life of your mortgage).  They work backwards from that figure using interest rates.

If you have a higher interest rate, you have less money to spend now.  If you have a lower interest rate, you have more money to spend now.

Points:  I want to tell you about a funny word – it’s one of those words that doesn’t mean what you might think it means when you hear it.  (Like when the waiter at the restaurant asks you if you would like your “check,” and somehow you know that what they really mean is your bill, but you say, “Oh yes, thank you.”)

When you hear the word “points,” what do you think of?  Maybe points in a football game?  Maybe a test score?

Well, some smart person in the mortgage industry started using the word “points” to mean 1% of your entire loan amount, that you get to pay up front, as a fee for certain things.

So let’s say your mortgage is for $200,000.  One “point” would mean $2,000.

Now I’ll tell you about the third term and how it relates to the first two.

APR:  “APR” stands for “Annual Percentage Rate.”  That sounds friendly, too, doesn’t it?

The APR is what you get when you add the interest rate, the points, and all of the other fees together and then calculate what the loan will cost you each year, based on all of the fees added together.

an excerpt from by referral only

 

Filed Under: Articles Tagged With: , , , , ,