Category Archives: Banking/Mortgage

New Albany, Ohio dream home

Different Types of Mortgages for New Albany Home Buyers

Last week we spoke about important financial costs to consider when buying a home in New Albany, and we talked briefly about mortgages.

This week we want to explore the topic of mortgages in depth, and we specifically want to focus on the different types of mortgages available for home buyers.

Discussion with a real estate agent at the officeFixed-Rate Mortgages

This type of loan keeps the interest rate consistent throughout the life of the loan, which may be 10, 15, 20, or 30 years. Fixed monthly mortgage payments make budgeting easier for homeowners.

Adjustable-Rate Mortgages (ARMs)

While the initial interest rates tend to be lower than fixed-rate mortgages, the interest rate fluctuates, with low rates that gradually increase each year. You can learn more about adjustable-rate mortgages in this handbook from the Consumer Financial Protection Bureau.

Federal Housing Administration (FHA) Loans

These type of loans typically only require a 5% down payment as opposed to the conventional 20%. However, FHA loans require mortgage insurance.

Veterans Administration (VA) Loans

All military veterans are eligible for this type of loan, which requires no down payment or mortgage insurance. There is a borrowing limit, however. In Licking and Franklin Counties, where New Albany is located, the borrowing limit is currently $417,000 for a one-unit property.

Two-Step Mortgages

These are 30-year loans that have a fixed rate for either 5 or 7 years before they are changed into a convertible loan (fixed-rate) or nonconvertible (adjustable-rate) loan. These loans are also known as 5/25s or 7/23s.

Balloon Mortgages

These type of loans tend to have lower interest rates, but require that you pay the entire loan in full at the end of the loan period.

Bi-Weekly Mortgage Payments

You can significantly reduce the amount of time you have a loan, and decrease the interest you have to pay, by making two mortgage payments a month.

home buyer receiving key to new homeWhich Mortgage is Right for You?

The right mortgage depends on your individual needs: your monthly income, future expected income, and current debts.

If you need help choosing the best mortgage or would like to speak with a recommended lender, we can provide any information you need to help make your transaction go smoothly so you can receive the keys to your New Albany home in no time. We would be happy to talk with you at any time; just call us at 614.939.1234.

front exterior of a house in new albany ohio

Important Considerations When Buying a Home in New Albany

If you are buying a home in New Albany, knowing how much you can afford is key to a simpler home search. And if you are a first-time home buyer, this information is crucial to helping you experience a smooth and enjoyable home buying process.

Learning What Size Mortgage You Can Qualify For

two business people discussing real estateWhen you talk with a mortgage lender during the preapproval process — which involves a deeper look into your financial history than a mortgage prequalification — you will will receive the amount of financing that you can qualify for. Unlike a prequalification, there is no estimation on your loan amount.

If you want to read more about why preapproval is a valuable tool to you as a home buyer, read this article on a previous blog post.

Other Financing Considerations

It is a good idea to speak with a mortgage lender to learn how much financing you can qualify for. But it’s also a good idea to understand how much you can truly afford for a mortgage. Home buyers often find that they are preapproved for more than they want to spend.

Monthly Mortgage Payments

calculator on a financial budget sheetMake a budget and find out exactly how much you can afford to make monthly for your mortgage payments, and use our helpful mortgage calculator to determine your monthly payment amounts, taking into account your interest rate, loan amount, and annual tax and insurance amounts.

The Down Payment

Depending on which type of mortgage you apply for in New Albany, you may end up having to put a 20% down payment on your home. On a home that is $500,000 that ends up being $100,000.

Other Closing Costs

In New Albany, common closing costs include the down payment, points, inspection fees, and notary fees. Read our article about the closing process to find other fees that may apply.

We Can Help You Find the Perfect Home

house keychain on the key to a new houseThere are significant costs associated with buying a home, but homeownership is a rewarding experience.

If you are considering buying a home in New Albany, we can help you take the step toward homeownership, including finding the best home that is within your price range and helping you decide which mortgage plan is best for you.

We are the real estate experts in New Albany. Contact us today at 614.939.1234 and let’s start working together to find your dream home.

New Albany Home Prices Stabilizing

New Albany Country Club Homes Prices Hold

Sale prices of homes in the New Albany Country Club community seem to have leveled out.  2012 prices remain equal to 2009 and 2010.  One of the gauges we use to evaluate sales trends is $ per Square Foot.  If you look at the past 3 years, the average sales price for real estate in the New Albany Country Club area has been ~$162/square foot.  While this is significantly less than the peak of $197/sq foot that we saw in 2006, it’s encouraging that we appear to be bouncing along what I believe is the bottom of the market.

Historical Look at New Albany Country Club Sales in $/Square Foot

The graph below illustrates why many real estate experts refer to the time between 2000 – 2010 as the “Lost Decade”.  Home prices in the New Albany Country Club community are actually slightly below the prices we saw in 2000.

 Is Now A Good Time To Sell?

Prices show no sign of going either up or down right now.  When they start to head back up, it’s unlikely that they will take a giant leap.  With few exceptions, in an average year, the Greater Columbus real estate market goes up 3%.  At 3% a year, it will take almost 7 years before we see 2006 prices once prices do begin to rebound.   If now is the time for you to upsize, down size, or just move because you don’t want to redecorate the home you are in, then you should do it.    Homes ARE selling and mortgage rates are at 60 year lows.  Let us know if you’d like Tony or I to assist you with your decision.  We offer confidential and complementary market evaluations of your home to enable you to make the best decision for you and your family.  Call or email us today.

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Franklin County Property Appraisals Released Today

Check your mail for your new home valuation!

We know property values have fallen since the last county-wide appraisals were done in 2005 but just how much?  You’ll know soon.  The Franklin County Auditor’s office is mailing the new valuations today!  It’s unprecedented and will be interesting to see what they look like.  While the auditor reports that Franklin County property values are down 6.7% from 2005, I expect to see a deeper decline in the New Albany valuations.

What if you don’t agree with the new valuation?

If you disagree with the new value established by the Franklin County auditor, you can present your case directly to county appraisers at informal value reviews held around the county beginning August 31st.  For a complete list of dates and locations for these meetings, visit the Franklin County Auditor site.  The New Albany community meeting will be held on September 8th at the Church of the Resurrection Ministry Center at 6300 E Dublin Granville Road in New Albany from 11 a.m. to 7 p.m.

Contact Kate or Tony if you have any real estate questions would like us to provide local market information to help you prepare for your meeting.   Good luck!

Visit www.NewAlbanyOhio.com to search the MLS and get up-to-date New Albany and Franklin County real estate information.

Lunch with Snoopy

The Thomas Team had a great luncheon meeting with our lender partner, Scott Miller of Met Life Home Mortgage, and his team yesterday at their new corporate digs. The focus of the meeting was for our team to get a complete understanding of the new world of home loans and the process from application to funding. To quote an old song from my youth “It Don’t Come Easy” . There are lots of new of steps and lots of different hand offs, gates and gate keepers. “Rushing” any deal these days is all but impossible as the banking industry is still reeling from the sub prime mess.

 Mac & Mae

At the end of the day, 90% of all loans come through the federal entities Freddy Mac and Fannie Mae. So even if you are going to get your loan through Acme Savings & Loan or Ginormous National Bank, at the end of the day the money and the thumbs up or down are tied to Mac and Mae. That’s because Acme and Ginormous sell their loans to Freddy and Fannie, and while they once took in any ‘ole kinda loan like a lost puppy, they are now very picky.

Automatic Underwriting

We learned that all loan apps go through an automated desktop underwriting system. Using this system, the loan officer can make a determination if the loan has a chance of meeting the guidelines issues by Freddie and Fannie. The answer can be had in as little as 60 seconds. Now this is true IF the borrower has provided the loan officer all the info necessary, and that’s often a big IF.

Knowledge is Powerful Stuff

The Thomas Team now knows the ins and outs (okay, we now have a better understanding) of the new world of loan application, process and approval. We can better advise our Buyers and Sellers as to what they can expect and we can assist our lending partner in meeting and exceeding client’s expectations. At the end of the day, it’s really about doing business with people of integrity and expertise who value you and your clients. We highly recommend Scott Miller (smiller5@metlife.com) and his team at Met Life (Snoopy).

Did The $8000 Tax Credit Help The New Albany Real Estate Market?

kateblog

With the $8,000 tax credit for 1st time home buyers about to expire on November 30th, I was expecting to see a lot more  New Albany homes for sale and Columbus homes for sale going into contract.  When the tax credit was announced, the experts thought it would jump start the housing market.  From my vantage point, there has been little “trickle up” effect seen in New Albany Ohio real estate.

Usually when one home sells, the seller buys another home, and the seller of that home buys another home and it goes on up the line with buyers trading up or down to different homes.  What has actually happened is that a large number of the buyers who have taken advantage of the tax credit have purchased NEW homes which means there is no ripple effect following the sale of that home.  The builders have moved a lot of spec inventory but the resale market remains unchanged.

New Tax Credit Being Considered

A bill was introduced in the Senate to extend and EXPAND the home buyer incentives.  It’s targeted at the “move up market” which was what was missing from the current incentive.  The passage of this bill is what I think will finally launch a recovery of the entire housing market.
The proposal being would extend a $15,000 tax credit to anyone who purchases a home through the end of next year.  A recent Moody’s Economy.com analysis suggests that the $15,000 credit would result in the sale of an additional 675,000 nationally – New Albany, Ohio and the Greater Columbus area would surely see the number of homes sold as well and, hopefully, a gradual return of some of the home equity that was lost during the past several years.  Stay tuned or contact Kate & Tony for any updates on the bill.

Until next time,

Kate

Is there a Foreclosure Problem in New Albany, Ohio?

An article in the August 13th issue of the Columbus Dispatch referred to a growing foreclosure problem in the suburbs of Columbus.  I began to wonder if this applied to New Albany as well.  I searched the  Multiple Listing Service to see how many of the homes that have sold in NA so far this year were either Foreclosed properties or Short Sale properties.

22 Foreclosed or Short Sale Homes Sold in New Albany Year to Date

Year to date (through 8/26/09), 144 homes have sold in the New Albany School District.  22 of the homes sold were either Foreclosed properties or Bank Short Sales or 13% of the homes sold.  This is not an insignificant number but it does mean that 85% of the homes sold in New Albany this year were traditional resale or new build homes.  A breakdown by price range shows that only 5% of the homes sold above $400.0 were foreclosed or short sale properties while 22% of the homes sold under $400.0 were foreclosures or short sales.  A breakdown by price range is shown below.

New Albany YTD Sold vs Foreclosed & Bank Short Sales
Price Range

Total Sold

# FrCl/ShSl

% to Total

Under $200.0

23

7

30%

$200.0 – $400.0

62

12

19%

$400.0 – $600.0

31

1

3%

$600.0 – $800.0

14

1

7%

$800.0 – $1000.0

7

1

14%

Over $1 Million

7

0

0%

Total

144

22

13%

Questions? Ask a  New Albany Ohio Realtor

Tony has earned the Certified Distressed Property Expert (CDPE) designation and can answer your questions about both foreclosures and short sales. Visit our website www.NewAlbanyOhio.com for information on Foreclosure and Short Sale Assistance.

Until next time,
Kate

Coming Up Short in the Real Estate Market

Today’s shifting economy has created some hardships and heartache within the real estate market, even in New Albany, Ohio.  You may have heard the term “short sale” being used lately with regards to real estate.   Many are unfamiliar with what a short sale is.  The “short” in short sale refers to a situation where the debt owed on a property is more than the current market value of the property.  In order for a property to transfer to a new owner, the seller’s lender needs to agree to accept less than is owed on the home. 

Short Sale vs Foreclosure

A short sale can be a way to prevent a foreclosure which is advantageous to both the seller and the lender.  The advantages to a short sale include a negotiated settlement with the bank and without attorneys or a court appearance.  The seller’s credit is “bruised” but not ruined and you can buy a home again in two years.  A short sale inevitably saves the lender money over the cost of the foreclosure process often making it the best solution for all parties. 

How Can Kate & Tony Help?

It’s important to have an advocate working for you – someone you can trust who will assist you through the bureaucracy of the mortgage industry.  We have counseled and assisted numerous clients through this process.  It’s a time consuming process but resolving this in the pre-foreclosure period is far more desirable than dealing with foreclosure.  It allows a seller to get on with their lives.  Tony and I welcome your questions.  Please contact Kate or Tony Thomas for a private consultation if you or someone you know finds themself needing to consider a short sale strategy.  You aren’t alone – we can help.

New Appraisal Requirements Announced for Jumbo Loans by HUD

The procedure for obtaining a loan continues to tighten as the banks, investors, and HUD figure out how best to insure that jumbo mortgages are secure investments.  The US Department of Housing and Urban Development (HUD) announced on April 1, 2008 that jumbo mortgages (loans exceeding the conforming loan limit of $417,000) may require 2 appraisals in order for a buyer to obtain a loan commitment.   According to the HUD Mortgagee Letter, a 2nd appraisal may be required when 3 requirements are met:

  • The loan amount, excluding the upfront mortgage insurance premium, will exceed $417,000, and
  • The Loan-to-Value equals or exceeds 95%, and
  • The property is determined as being in a declining market.  A declining market is determined by either the appraiser or the lender.

Every time I speak with one of our lenders, it seems there are more and more changes that need to be understood and incorporated into the mortgage approval process.  However, this is probably a good change… though it could slow down or add additional cost to the process.  I find myself counseling our buyers that there is a little bit of a learning curve as everyone becomes more familiar with the sweeping changes that have taken place in the mortgage industry.

Good Real Estate News For A Change!

It’s no secret that real estate and banking have been in the news for all the wrong reasons during the past 12 months. Yesterday, we received great news from our preferred lender, Scott Miller, at National City Mortgage.  Interest rates are at long time lows right now.   Yesterday, the rates for a 30 year fixed rate dropped to 5.49% and the rate for a 15 year fixed mortgage dropped to 4.99%. According to The New York Times, most economists don’t believe rates will decline much more in the near future.

We’re not sure if we will see another time in the next 10 years where extremely low interest rates are coupled with lowered home prices.   This unusual alignment of low interest rates and low sale prices makes for a very opportunistic time to BUY a home, particularly if you would like to trade up to a larger home.   If you are planning on SELLING, the lower rates allows more people to qualify to purchase your property…producing a larger potential pool of buyers.

Tony and I would love to talk to you about any questions you may have about your current home or the market in a neighborhood that interests you.  Just call us or email us to arrange a confidential consultation.  We look forward to hearing from you.