How to Ease the Stress of the Home Selling Process

April 15th, 2017
Home selling process

Buying a home or selling a home, both processes are stressful. Here are six steps for sellers that will help to reduce some of that stress.

In the previous blog post, How to Research and Prepare for the Home Buying Process, we touched on the intimidation and overwhelm that can be felt when buying a home. This week, let’s address the stress of the home selling process.

Buying a home or selling a home, both processes are stressful. But just like the home buying process, the home selling process can be less stressful, too. Here are six steps for sellers that will help to reduce some of that stress.

Reducing the Stress of the Home Selling Process

If you’re stressing over the sale of your home, follow these simple steps:

  1. Disclose, disclose, disclose

If you’ve lived in your home for a few years, you’ve likely had to deal with a few issues. Chimney fires, water damage, and water in the basement are a few examples of issues that should be disclosed. Did you add a sump pump or a French drain while living in your home? Disclose every problem you have had and how you solved each one:

  • Explain in detail the issues and how you fixed them
  • Take before and after pictures
  • Save receipts
  1. Find out how your home looks online

Google your address. All buyers are online these days in their search for a new home. Maybe you added a deck or awnings recently. Recent improvements made to your home may not show up on Google Maps’ street view. Flag those updates.

What value does Google estimate your listing to be worth? Is Google’s value of your listing different from your asking price? Your listing may have more bedrooms now than it did when you bought it years ago. Sometimes tax records don’t have updated information which reflects in the value Google lists for your property. If there is a difference, you can fix it without much difficulty.

  1. Make a good first impression

Fix minor repairs. An improperly working doorbell, for example, can cost you a sale. From curb to front door, a home that is well-maintained shows prospective buyers that you have taken good care of it. Prospective buyers appreciate a home that is well-maintained. To them, it is move-in ready and won’t cost them much to fix up and settle into.

  1. Deep-clean inside and out

Nothing is safe from the eye of prospective buyers. They will look inside drawers, cabinets, closets, dishwasher, oven, and refrigerator. to even the dishwasher. Windows, window sills, doors, and baseboards should be free of grunge. Whether you choose to hire a cleaning service or deep-clean your home yourself, the time and money spent will return to you in your sales price.

  1. Be specific about what stays and what doesn’t

Some contracts spell out exactly what is included with the sale of a home. Others are vague. Even though a contract states “appliances included in the sale,” some sellers have replaced their high-end appliances with low-end models. If the refrigerator, oven, dishwasher and microwave are included with the sale of your home, list the make, model, and the serial number of each.

The same goes for what isn’t included. If the refrigerator in the garage isn’t staying, say so, in writing. If items such custom window treatments aren’t included, let your agent know right up front. Legally anything bolted to the wall or ceiling goes to the buyer unless specifically excluded in the contract.

If you plan to take something with you, document it in all print and online marketing materials. There should be no doubt in the buyer’s mind what stays and what goes. Read “5. Fixtures and Appliances” in 7 Must-Have Real Estate Contract Conditions for more information on this topic.

  1. Stage your home

Take a good look at your house. What do you see? Would you want to buy your house? If you see things that need fixing, like paint touchups, fix them.

But what if you can’t really see your house? Clear the clutter out, and hire a home stager to help you prepare your house for touring. Trust what they tell you to do, and do it. Once your home is staged, keep it that way. It’s inconvenient and challenging to live in a staged home, but it’s worth it. A staged home will help your home sell faster and for more money, and it will help you keep your home show-ready, too.

Like the home buying process, the home selling process is stressful, too, but these six steps can minimize the stress. Get great help right from the start. Hire the right real estate agent. Contact Charles D’Alessandro at (718) 253-9600 ext. 206 or email [email protected]. With over 30 years of real estate experience in Brooklyn, you can trust Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate to sell your home today.


How to Research and Prepare for the Home Buying Process

March 30th, 2017
Home buying process

Proper research and preparation will take a lot of the intimidation out of the home buying process.

As a first time homebuyer, you may be feeling somewhat intimidated about the whole home buying process. With everything there is to learn about buying a home, it can certainly be overwhelming. Even those who have purchased homes two or three times will tell you buying a home is challenging. But they will also tell you that knowing how to research and prepare for buying a home will help you handle the challenges that come with it. First time homebuyers may find this resource helpful in easing any stress that can come during homebuying process.

Use These 5 Tips When Researching and Preparing for the Home Buying Process

 

  1. Consider the Best Location

If you haven’t heard the old cliché “Location, Location, Location” yet, you will. That’s because it’s real estate truth! Location really is the most important part of the real estate equation. Consider the following pros and cons to help you determine the best location for your Brooklyn home:

  • Take your family’s priorities into account
  • Know where you would buy a home, and where you wouldn’t
  • Try to be flexible with what you really want in your home. For example, are you longing for a place with a yard?
  • Compare the price of the home you’re looking at purchasing with prices of homes in the area. This will help you find out if you’ve found a good deal and whether or not it lines up with current market expectations.

2. Be Ready Financially

Looking for a new home can seem like an endless endeavor. Once you find “the one” though, the process moves into high gear. In real estate markets that are fast-moving, a great house for a great price can list in the morning and receive an offer a few hours later. It’s even possible for it to be under contract by nightfall, really! And this is why you should be ready financially before you find a great house and make an offer.

Ask your friends and family which law or finance professionals, any law or finance professionals. Charles D’Alessandro with Fillmore Real Estate has recommendations for mortgage companies, so ask him for his recommendations. Get quotes from several different lenders. This will give you a general idea of what your rates should be.

  1. Familiarize Yourself with Real Estate Jargon

It’s honestly worth the effort to educate yourself with some of the real estate terms that come with the home buying process. If you’re familiar with the terms, you’ll understand the purchasing terms when they’re being discussed.

  1. See the Neighborhood for Yourself

Find out if a neighborhood is right for you by spending the day there. Check for open houses you’re interested in and make a day of it. Take a walk and visit nearby shops, restaurants, parks, and schools. Find out what kind of people live there.

  1. Hire Charles D’Alessandro as Your Buyers Agent

The relationship with your real estate agent is important. They can make or break your home buying experience. Your real estate agent must be trustworthy, dependable and work FOR you in the home buying process.

The home buying process is exciting and stressful. With proper research and preparation, your home buying process can be a great experience. Start smart and hire Charles D’Alessandro. Research, prepare and contact Charles D’Alessandro at (718) 253-9600 ext. 206 or email [email protected]. With over 30 years of experience marketing Brooklyn homes, you can trust Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate as your buyers agent.


Home Staging: This is How to Sell Your Home Faster and for More Money

March 15th, 2017
Home staging

Home staging increases the value of your home to buyers and helps your home sell faster and for more money.

Once you list your home for sale, keeping it clean, bright and clutter-free is a given. But did you know that staging your home increases the value in the buyers’ eyes? It also helps you get a higher price for your home. It’s a proven fact. Sell your home faster and for more money with home staging.

What is Home Staging?

Home staging is more than thoroughly cleaning, hauling out clutter, fixing aesthetic issues and making your home bright with lots of light. Staging a home:

  • helps prospective buyers visualize themselves in the home
  • has an effect on the buyer’s view of the home
  • makes an impact in several ways for the buyer
  • helps buyers visualize the property as a future home
  • makes prospective buyers more willing to walk through a home they saw online

How Much Does It Cost?

Home staging costs an average of $675. Some real estate agents include home staging as part of their services.

If you choose not to have the whole home staged, stage the living room. It’s the number one room to stage. Second is the kitchen. Ranking third, fourth and fifth are the master bedroom, dining room, and bathroom.

Is it Worth the Effort and Investment?

Buyers typically offer a 6 to 10 percent increase in the value of a staged home. The impact and the value home staging bring to both home buyers and sellers make it worth the effort and investment most definitely!

Home Staging is About Your Home, not You

A professional home stager is hired to bring out the best in your home. Don’t take her recommendations personally. Commit to marketing your home for sale and be prepared to detach emotionally from your home and belongings. How we live is not how we sell a home, and therein lies a great challenge! Following staging recommendations to a tee and keeping your home in show-ready condition will sell your home faster and for more money. Trust your agent, your home stager, and the process!

Working with Charles D’Alessandro gives buyers, sellers, and investors the advantage they need to succeed in today’s challenging market. Charles knows what buyers want and how to best market and stage a home for sale.

Home staging is an excellent tool to give your home a little extra push to sell faster and for more money. Contact Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate at (718) 253-9700 ext. 206 or email [email protected] today.


The BEST Time to List Your Home!

February 28th, 2017
Best time to list your home

The best time to list your home is determined by the weather and the housing market in your area. When is the best time to list your home in Brooklyn? Call Charles today!

Welcome to March Madness in the world of real estate! You’ve heard it before: “List your home early in the year. That way, you’ll be ready to close the deal when home sales peak in June.” But what exactly does “early in the year” mean? When is the best time to list your home?

The Best Time to List Your Home According to Zillow

Zillow determined the best time to list your home based on an analysis of supply, demand and sellers’ outcomes. This magic window, they say, is mid-March to mid-April. Think March Madness to The Masters.

The Best Time to List Your Home According to the Weather

The best time and the exact weeks to list your home vary in different parts of the country, because the best time to list follows weather patterns. So in markets with warm climates like Miami, the best time to list is right now. But in places where winters are harsh, like Brooklyn for example, waiting until mid to late April is best. Nationally, the magic window for listing your home is in early May.

The Best Time to List Your Home According the Housing Market

In addition to the weather, housing market dynamics affect the best time to sell a home. A low supply of homes on the market, like we have now, pushes the best time to list your home into late spring. The decline in the number of homes on the market increases competition. This means buyers who start shopping for a home in early spring may need to look at several homes. It also means they will still be shopping a few months later. Then when May rolls around, these buyers may get eager to settle into their new home for the upcoming school year. This eagerness could make them willing to pay a premium to close on the house as quickly as possible.

What Makes the Best Time to List Your Home Magical?

When you list your home within the timeframe of the magic window, your home sells faster and for more money. And who doesn’t want that kind of magic? Data shows homes listed from mid-March to mid-April sell 15 percent faster and for 2 percent more than the average listing. That’s a national premium worth more than $4,000.

Are you selling your Brooklyn home this year? If you’re hoping to sell it quickly and get the most you can for the sale of your home, the best time to list is around May 7th. Data shows homes listed between May 1 and May 15 sell about 18.5 days faster and for 1 percent more than the average listing nationally. That’s an average premium of $1,700 for the seller of a median home. That’s magical, too!

Contact Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate at (718) 253-9700 ext. 206 or email [email protected]. I can answer your questions about the best time to list your home in Brooklyn. Call me today to join in the March Madness of real estate!


How to Choose a Licensed Professional for a Home Inspection in Brooklyn

February 15th, 2017
Home inspection in Brooklyn

A good home inspection in Brooklyn is worth your time and money. Do your research to find a great home inspector for the home you are buying.

“Are home inspections worth the effort?” Yes, they are! “Would you recommend an inspection of the home we are buying?” Yes, I would! A home inspection in Brooklyn gives clear understanding of the current state of the home you are buying, and that’s important. Here’s why.

A home inspection is more than acquiring a list of problems to negotiate with a seller. It is assurance that you know exactly what you’re getting into when it comes to the condition of a home. It’s true that a home inspection could reveal something the seller needs to fix or something that will cause you to want to back out of buying a home. But it’s way more fun to think of it as an owner’s manual with maintenance tips and schedules for your new home instead.

Do Your Research to Find a Licensed, Professional Inspector for Your Home Inspection in Brooklyn

All home inspectors are not the same, nor do they offer the same things. With a little research of their websites, you can create a list of licensed, professional inspectors to choose from. Check their online reviews, study their websites and write down the answers to the following questions:

  1. How long have they been in business?
  2. Do they have testimonials listed on their website? If so, are they from happy clients or real estate agents? How many “5-star” testimonials are listed, 5 or 50?
  3. What are their qualifications and actual home inspection experience?
  4. Is there a sample inspection report available to view? A great home inspector will not hide a sample report from website visitors. Click HERE for an example of a good one.

What to Look for When Viewing a Sample Home Inspection Report

Believe it or not, there is much more than photos and illustrations to look for on a sample report. A good home inspection report will state the problem, explain the significance of the problem, and recommend a course of action.

Further inspections may be needed, and that’s fine. However, such recommendations should never be given lightly. Additional inspections require more time and money.

Finally …

Yes, you should hire a licensed, professional inspector to conduct a thorough home inspection in Brookly. Get recommendations and a sample report to make sure they will produce a thorough report on the home you are buying. Find out what is and isn’t included in the price of the inspection. Refer to this actual home inspector Home Inspection Checklist and ask what they will test for specifically. Be clear on exactly what is and isn’t included in the inspection price. For more tips on how to find a home inspector online, read: How Hard Can It Be to Find a Good Home Inspector?

Contact me, Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate at (718) 253-9700 ext. 206 or email [email protected] for a list of inspectors with reviews in Brooklyn today.

Get a seller’s disclosure statement before the day of your inspection. This statement will help you pinpoint anything you want your inspector to look at. If the sellers disclosed a leaky window that was replaced or repaired, make sure your inspector looks at it.

After you’ve decided on an inspector, book the home inspection in Brooklyn. If you can’t decide between the final two on your list, go with price. Then, plan on being there with your agent on the day of the home inspection for the entire time.

You aren’t being a pest. Think of yourself as a student. Hearing and seeing what the inspector is inspecting is super helpful to you. They will explain your home’s systems and give maintenance tips which will also be in the final report.


Should This Be the Year You Sell your Home?

January 30th, 2017
Sell your home

Charles D’Alessandro knows how to accentuate the special and unique features of your home to help you sell your home fast and for top dollar.

Did you sell your home in 2016? 2016 was the best year for existing-home sales since 2006. Existing-home sales were 3.3 percent higher in 2016 than they were in 2015. If you didn’t, should this be the year you sell your home?

The National Association of Realtors predicts positive growth in the market this year in the following ways:

  1. Existing-home sales are predicted to grow modestly by 2 percent this year in spite of mortgage rate increases.
  2. The median price of homes being sold has been forecasted to increase by 4 percent.

These reasons are reason enough to make this year the year to sell your home. I encourage you to consider it.

The Brooklyn real estate market is unique as is your own financial situation. So find out how the 2017 Brooklyn housing market looks. I have over 30 years of real estate experience. With that experience I will help you decide whether or not the sale of your home makes financial sense. Contact me, Charles D’Alessandro, today at (718) 253-9700 ext. 206.

If you decide to sell your home, do these 3 things right now

If after a consultation with me you decide to put your home on the market, there are a few things you should do right now. Getting these to-do’s completed will give you a head start on selling your home this spring.

  1. Hire Charles D’Alessandro as your real estate agent.

Hiring a real estate with experience and great customer service is essential to a successful home sale. With me as your real estate agent, you can:

  • Rely on my expertise to make the decision to sell
  • Believe I’ll choose the right price for your home
  • Have confidence in how I market your home
  • Trust my skill to negotiate offers from buyers
  1. Get a home inspection scheduled before you list.

An early home inspection is a good idea. You want to find and fix any issues there may be with your home before the buyer does. If a buyer finds unseen issues when they conduct their own inspection, it could derail the sale. An early home inspection will give you extra time to address any problems uncovered.  I can advise you on whether it’s better to make the repairs or adjust your asking price instead.

  1. Declutter and stage your home.

Decluttering and packing while making home improvements is an efficient way to prepare your home for sale. Then, once your house is free of clutter, you can stage your home to impress.

  • Clean out your closets
  • Pack photos and knick-knacks
  • Put all that you can in storage
  • Make rooms look spacious. Live as minimally as you possibly can. Store extra furniture pieces, like the quilt rack, hope chest, tall dresser.
  • Clear kitchen countertops and keep them clear
  • Paint the entry way and keep it tidy
  • Invest in new throw pillows, towels, bedding and other accessories

Finally …

I will advise you on the best ways to attract buyers to sell your home. I know how to accentuate the special and unique features of your home and stay within your budget.

Sell your home fast and for top dollar. Contact Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate at (718) 253-9700 ext. 206 or email [email protected] today. Take my advice and avoid the stress of getting your home ready to sell on a tight deadline. You’ll be way ahead of the competition, too.


Do You Hope to Move from Renting to Buying This Year?

January 15th, 2017
Renting to Buying

Prepare to move from renting to buying a home this hear! Start today with these 5 good habits and make home ownership your reality!

The end of a year is a good place to start – some good habits for a new year, that is! Are you hoping to move from renting to buying a home this year? Then there’s no time like the month of January to get started on these 5 habits. Start here. Start now for a seamless transition from renting to buying in the New Year.

5 Good Habits That Will Pave the Road from Renting to Buying

  1. Start saving for a down payment right away

Unless you’ve received a sizeable inheritance, you can never start saving for a down payment too early. For a $200,000 home, the recommended 20% down payment is $40,000. That’s a lot of money, and most people don’t plan for it like they ought to.

The best way to start saving for a down payment is to automate an amount from every paycheck into your savings. Yes, automate saving a small amount of every paycheck. Set it up to go right into a separate savings account named “Down Payment.” Exercising the discipline and perseverance to set aside money for a savings account is tough. But setting up automatic savings makes it easier, and you won’t miss it. Money can be “out of sight, out of mind.” You won’t spend what you don’t see to spend.

By the way, a down payment of 20 percent is not a requirement. There are other options, but it’s best to save as much as you can. Start a savings account with your very next paycheck.

  1. Pay down debt and pay your bills on time

Can’t say this enough, “Pay off debt and pay your bills on time.” Mortgage lenders want to see that you’ve paid off past debts. They also want to see that you are paying your credit cards and other loan payments on time. If you’ve been late in the past, get current and stay current. Even if you make $250,000 a year, a mortgage lender will likely deny a mortgage if your credit card payments are always late. Keep in mind, lenders favor not using more than 30 percent of your available credit, too. Pay down as much debt as you can before applying for a home loan.

  1. Live on a budget

Owning a home isn’t necessarily pricier than renting. It depends on your area. Do your homework and compare the costs of renting versus buying a home. If you expect your mortgage payment to be larger than your rent payment, create a budget that factors that in. When you live on less, you get used to it. Then you won’t choke when your monthly mortgage payment becomes a reality. You’ll also be able to save more for the down payment and pay down debt.

  1. Learn how to do your own repairs and maintenance

When renting, repairs are the landlord’s responsibility. That’s nice. Learn the basics of property maintenance while renting. What if your new home has a lawn? You’ll need garden hoses, a lawn mower and other maintenance tools, because lawn care will also be your responsibility. It would be wise to add home maintenance as a budget item, too.

Knowing how to do basic home repairs and maintenance will save thousands of dollars as a homeowner.

  1. Get to know the real estate market

Here’s something else you should do while renting – get to know the real estate market. Prepare before you’re ready to hire a real estate agent and start touring homes.

Browse homes online to get a sense of what is available. Find out what you can afford and how much of a down payment you should be saving for. This saves you from disappointment when you begin touring homes.

And Now You Know How to Pave the Way from Renting to Buying

Now you know 5 good habits to start now to move from renting to buying a home this year. Hiring an agent may be in the somewhat distant future, but there is plenty for you to do right now. Change your hope of buying a home into a reality in 2017. This is a huge purchase, and it requires some preparation financially and mentally.

Call Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate today at (718) 253-9700 ext. 206 or email [email protected]. With over 30 years of experience, Charles has the expert real estate agent skills needed to help you prepare to purchase your first home.


New Year, New Year’s Resolutions for Homeowners

December 30th, 2016
New Year's Resolutions

As a Brooklyn homeowner, you can make new year’s resolutions that will save you money. Here are 6 ways to save significantly in 2017!

Have you made your New Year’s resolutions for 2017 yet? The start of a new year is a popular time to make them. What are New Year’s resolutions? They’re promises made to yourself to better yourself in the new year. Time.com lists the Top 10 Commonly Broken New Year’s Resolutions:

  • Lose weight and get fit
  • Quit smoking
  • Learn something new
  • Eat healthier and diet
  • Get out of debt and save money
  • Spend more time with family
  • Travel to new places
  • Be less stressed
  • Volunteer
  • Drink less

6 New Year’s Resolutions for Homeowners

Those are great promises to resolve to do, but if you’re a homeowner, add these to your list. These resolutions will save you money and make the selling or buying process easier.

  1. Shorten the term of your mortgage

Put extra money toward your mortgage every month. The more you pay in a shorter period of time, the less you’ll end up paying in the long run.

For example, let’s say you have a $150,000 mortgage with a 30-year term at an interest rate of 5.5 percent. Your monthly mortgage payment (principal and interest) would be $852. Paying just an additional $71 each month would shorten that 30-year term by five years and one month. It would also cut the interest down by $30,789. Amazing, right?

  1. Pay off a second mortgage

Paying off a second mortgage is well worth the challenge. Freedom from debt and interest is one of the greatest resolutions to discipline yourself to keep.

Put an extra $100, $200 or $400 toward your home equity loan every month, instead of spending it on something else. The more consistent and disciplined you are to pay off a second mortgage, the better off you are.

And if your second loan has a variable rate, you could get socked with a painful payment increase if interest rates rise. And what if you’re not in a position to refinance that debt? Uh-oh or ouch!

  1. Lock in a low, fixed rate

There are a couple of great reasons to refinance your home loan:

If the only thing you do in the new year is change a variable mortgage into a fixed mortgage, you’ve done yourself a huge favor financially. Even if you end up with a higher payment, a fixed rate will save you from an increase in your interest rate in the future.

Here’s another scenario to help explain: On a $200,000 mortgage with a 30-year term and a variable rate starting at 3.5 percent, your monthly principal and interest add up to $898. If you refinanced that loan with a fixed rate of 5 percent, your monthly principal and interest add up to $1,073, an additional $175 a month. But what if the variable rate jumped way up to 7.5 percent? Your monthly principal and interest would now add up to $1,389 which is an additional $491 per month.  You can see the benefit of locking in the extra $175 in 2017. It might be difficult, but paying an extra $491 in the future could be harder to accomplish than an extra $175 each month.

  1. Challenge your property tax assessment

Has your home declined in value in recent years? If you answered, “Yes,” you might be able to save some money in 2017. Challenge your property tax assessment.

Review your property tax and request a hearing date within the required time if the assessed value is excessive. I will help you with comparable sales data for an appeal.

If your property values drop by 40 percent, your taxes should drop by 40 percent, too. The savings can be substantial, about $1,500 a year on average.

  1. Earn a discount or lower quote on homeowners insurance

Major repairs or improvements that you made to your home this past year can earn you a discount or a lower quote on the new year’s coverage.

A new roof, updated electrical and plumbing, for examples, are preventive home maintenance which will save you money. Insurers appreciate the money home maintenance will save you and are usually willing to give you a discount or lower quote on your homeowners insurance. Call your agent today and update your file with them. Find out whether or not you qualify for a discount or lower quote on your homeowners insurance policy. You might be very glad you did!

  1. Take steps to improve your credit rating

Paying off debts and paying your bills on time will strengthen your credit score. The higher your credit score, the more likely lenders are to lend you money at a lower interest rate and on more attractive terms.

If you’ve missed a few mortgage payments this year, resolve to get and stay current as soon as possible.

Poor credit is not a forever thing. The longer you remain current and on time with your bills after being late, the more your FICO score will improve. Lenders pay attention to current behavior. Older credit problems count for less with lenders.

Do you want to save money or make the selling or buying process easier in 2017? Add these New Year’s resolutions to your list. Then contact me, Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate at (718) 253-9700 ext. 206 or email [email protected] today. I can answer your questions and help you figure out how much money you’ll save by keeping these homeowner promises in 2017.


What is the Requirement for a Down Payment on a Home?

December 15th, 2016
Down payment in Brooklyn

Bottom line: A bigger down payment equals more house.

We’ve found the perfect house, and interest rates are still low at just under 4%. We have been preapproved for the loan needed to purchase the home and have given the seller earnest money for the escrow account. The next step? Acquiring a down payment.

What is a down payment?

A down payment is the money given to the seller of the home you are buying. It is a percentage of the total price of the home. The remaining amount is paid to the seller from the mortgage secured.

The money for a down payment can come from:

  • Your personal savings account
  • The sale of a house
  • Gifts and grants from family, employers and nonprofits

Why is a down payment required when purchasing a home?

Lenders require a down payment because it gives the borrower incentive to make their monthly mortgage payments. If you as a homeowner can’t make the monthly mortgage payments on your home, you risk losing the down payment and going into foreclosure.

What is the minimum amount required to put down on a home?

For a while now, 20% has been the minimum down payment for standard loans. While a down payment of 20% or more allows you to avoid purchasing mortgage insurance, down payments less than 20% are becoming more common.

Because the housing market is improving, lenders are relaxing. Even 10% down payments are more widely accepted. That’s good news for all who need to buy a Brooklyn home.

Most lenders require at least 3% down. Mortgages insured by the Federal Housing Administration (FHA loans) require at least 3.5% down. Minimum down payments of 5%, 10%, 20% or more are determined based on your credit history, the type of dwelling and your reason for buying.

For the sake of explanation, look at these two examples. Let’s say you buy a house for $300,000:

  • A 20% down payment means you pay the seller $60,000 and borrow $240,000.
  • With a 10% down payment, you would pay the seller $30,000 and you would borrow $270,000.

Search for a low down-payment mortgage today. Click here.

Are there risks associated with down payments less than 20%?

Yes, if you can call them risks.

  • In order to qualify for a down payment less than 20%, you’ll need a credit score “in the green.”
  • You’ll have to but mortgage insurance, too. (Mortgage insurance protects the lender in case you default on the loan). There are two main types: Private mortgage insurance (PMI) and FHA insurance.
  • Lenders usually charge fees to borrowers who make down payments of less than 20%. The fees are on top of mortgage insurance premiums. The smaller the down payment, the higher the fees. Fees are paid at closing. Lenders sometimes charge higher interest rates instead of the fees.

When a down payment of 20% or more is put down on a home, the lender figures defaulting will be more detrimental to you than it will be to the bank. (This calculator will estimate the cost of mortgage insurance in your case.)

Because home values are improving, home prices are increasing. However, most economists predict they will not increase rapidly. Putting 10% down rather than 20% will make gaining equity in your home take longer. This matters only if you want to apply for a home equity line of credit in the future. You’ll have less to draw on.

Depending on your situation, 10% down may prove to be worth the complications that come with that. To make sure you’re making the right choice, talk with your lender. Discuss fees and factors that come with different sizes of down payments. (i.e, 10% versus 20% down as mentioned above).

In closing …

A bigger down payment equals more house. Again, talk with your lender. If you can, put 20% down. If you can’t, look at many different sizes of down payments and how each amount will affect your monthly house payments. A good lender will get creative and work with you to get you into your next home.

If you have questions about down payments, contact Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate at (718) 253-9700 ext. 206 or email [email protected]. He’ll answer your questions or connect you with a great person who can. Call him today!


Mortgage Rates are on the Rise – Should You Lock in a Rate Now?

November 30th, 2016
Mortgage rates

Mortgage rates are on the rise, but don’t let their rise deter you from pursuing your dream home. Rates are still low.

What does the outcome of this year’s election have to do with you and real estate? Nothing, unless you’re thinking about refinancing or purchasing a home. Mortgage rates are climbing since the election, and they’re expected to continue to climb in the new year. However, they’re not expected to keep shooting upward.

So if you are in the market to buy a home, should you rush to lock in a mortgage rate now before they go up any higher? Is it possible that they will fall?

Should You Lock in Mortgage Rates Now or Hope for a Bounce Later?

As of November 16, 2016, rates climbed nearly 0.2% since the election. They climbed to 3.95% for 30-year fixed-rate mortgages of $417,000 or less, according to the Mortgage Bankers Association. They haven’t been this high since January. That may not sound like much, but as interest rates go, even a little can add up. Rising interest rates mean higher monthly mortgage payments. Buyers are obviously leary. The number of mortgage applications dropped by 10%. Refinance applications dropped by 11%.

Rates are still low, and buyers shouldn’t be deterred from buying a house. If you’re one of those leary buyers, think about this. In 1979, the mortgage rates were more than four times what they are today. Compare the rate of 16.75% to 3.95%, for example. That’s quite a difference, right?

Why Do Mortgage Rates Rise?

Mortgage rates rise because they typically follow the bond market. After Donald Trump won the presidential election, bond prices plunged and stocks started soaring. Many investors chose to get out of bonds and into the stock market. They expect that the economy will improve under his presidency which could increase inflation and lessen the value of the bonds. And there you have it: the reason why mortgage rates rise.

Does the Rise in Mortgage Rates Affect Homebuyers in Other Ways?

Yes. The rise in rates will affect borrowers’ debt-to-income ratios since buyers will be obligated to pay bigger bills each month. This affects a borrower’s credit score and cause lenders to approve smaller loans.

If You’re in the Market to Buy, Stay Calm and Keep Buying

No one really has any idea what’s going to happen, but if you’re planning to buy a home, be encouraged to keep looking. Read this housing economist’s perspective here: Postelection Prescription: Stay Calm and Keep Buying Homes.

Mortgage rates are always fluctuating. Most people either refinance when the rates go down or move within five to seven years no matter what the mortgage rates were when they purchased their home.

Although mortgage rates are on the rise, keep calm and keep pursuing your dream home. With over 30 years’ worth experience in the Brooklyn real estate market, Charles has seen the interest rates rise and fall. Call Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate at (718) 253-9600 ext. 206 or email [email protected] with all of your questions today.