A trusted Brooklyn real estate agent might be the best investment you make in your home buying or selling endeavor. There is a tendency to believe you can do it yourself in a hot real estate market, especially for home sellers. However, having an experienced real estate professional as a partner in the home selling or buying process is a valuable step that can significantly reward you.

A buyer’s agent will genuinely represent the best interests of a homebuyer when they hire a Brooklyn real estate agent to work on their behalf. 

A buyer’s agent will:

1. Watch the market for newly listed homes that meet your criteria.
2. Research local sales prices in your neighborhood of interest.
3. Study the local market for sales trends.
4. Suggest a pricing strategy based on current sales trends.
5. Structure an offer reflective of the buyer’s desire to purchase the home based on market demand and agent knowledge.
6. Negotiate in the buyer’s best interest.
7. Recommend service providers needed in the transaction.
8. Negotiate any issues revealed during the inspections and due diligence period.
9. Coordinate closing timelines with the seller’s agent, lender, title company, and closing attorney.
10. Communicate with the seller’s agent as the buyer’s liaison.

A Brooklyn real estate agent who is working as a seller’s agent represents the best interests of the homeowner. 

A Seller’s agent will:

1. Advise seller on preparations needed before listing the home.
2. Provide a comparable market analysis to price the home correctly.
3. Research local sales statistics in your neighborhood.
4. Study the local market for sales trends.
5. Professionally market the home.
6. Network with fellow real estate agents to promote your home.
7. Evaluate buyer feedback from showings to make necessary adjustments.
8. Review all offers and makes recommendations on counteroffers.
9. Confirm buyer qualifications.
10. Provide guidance in any home inspection and other contingency-related issues.
11. Coordinate closing timelines with buyer’s agent, lender, title company, and closing attorney.
12. Facilitate any necessary communications with the buyer’s agent and buyer.

It makes good sense to work with a Brooklyn real estate agent to achieve your real estate goals. As a matter of fact, many home sellers and home buyers have found that the investment in hiring a professional was well worth it in the savings they realized by gaining more in seller proceeds or saving money on buying mistakes.

What are some ways a real estate agent can save you money?

1. Price your home correctly for a timely sale.
2. Familiarity with staging techniques to make your home appealing to buyers.
3. Recommendations on what repairs and updates will yield you a return before listing.
4. Their network of trusted experts can help you save on inspections, repairs, staging, lending, and legal issues throughout the home buying or selling journey.
5. Negotiation skills and tactics.
6. Streamline the process, saving you time and money.
7. Evaluate realistic listing and sales prices.
8. Position a listing for maximum interest and exposure.

The real estate community is well-connected. Real estate professionals network with other real estate professionals sharing information on upcoming homes for sale and the buyers they represent. As a result, a well-connected real estate agent may share or learn about pocket listings, homes that are not yet available to the public. 

Buying and selling a home can become emotional at some point in the process for both buyers and sellers. Having a neutral party in your corner who can evaluate any situation from all sides of the table can provide that big picture view you may be unable to see at the time. However, you need to be prepared for unexpected emotions to creep up on you. 

How can you prepare yourself emotionally?

1. Evaluate if the time is right for you to sell or buy.
2. Research the process to gain a better understanding of the steps involved.
3. Stay involved in the process of working with your agent, lender, title company, and closing attorney.
4. Keep an open mind and be flexible.
5. Create checklists, so you don’t overlook anything.
6. Focus on your end goal.
7. Maintain open communication with your real estate professional and other service providers.

A Brooklyn real estate agent who practices full-time has the expertise and market knowledge that buyers and sellers don’t. As a matter of fact, it is their job to stay on top of the market trends. Their expertise and experience in the local market can be the advantage you need to buy or sell a home.

Marketing a home is another area where a Brooklyn real estate agent can be of value.

They know how to get the exposure for your home needed to get it sold. They not only market to the general public, but they also market to their network of real estate agents who may be representing the buyer of your home. Utilizing professional services like home stagers, photographers, and videographers to present the house in its best light is an essential piece of marketing a home because most buyers begin their home search online.

According to the National Association of Realtors study, 91% of sellers list their homes through the multiple listing service. Your Brooklyn real estate agent has access to the multiple listing service. The multiple listing service is not only where real estate agents learn about the most recent available properties, but they also have access to the most recent home sales statistics. 

Although this database of information may be shared publicly through online portals, not all the detailed information is shared, including price history and sales information. When a property sells, it is recorded in the MLS immediately, but public records may take time to be updated.

The multiple listing service can benefit the buyer by gaining access to the most current information. For example, a real estate agent can set up an email notification system that will alert both the agent and the buyer when a new listing hits the MLS that meets their criteria. In reality, it may take time for this information to appear on online real estate portals. 

From a seller’s standpoint, accessing the MLS allows their property to have the most significant exposure on the market. In fact, 88% of home buyers recently utilized the services of a real estate agent. Buyer’s agents search for homes to show buyers through the MLS.

One of the best reasons to work with a Brooklyn real estate agent is the Realtors® Code of Ethics.

The National Association of Realtors® is the largest trade association in the country. All agents designated as Realtors® must abide by the Code of Ethics and are held accountable to them. 

Under the code of ethics, their duties are to protect their client’s best interest while treating all parties honestly, meet professional standards, implement non-discriminatory practices, and refrain from making false statements against other real estate agents. Duties covered under the code fall into three categories; client and customers, the public, and other Realtors®. 

Disciplinary actions will begin at the local level through the Board of Realtors®. The process of reviewing issues is detailed and accordingly works like many justice systems. 

The code of ethics provides accountability and guidance for real estate agents to conduct their business with integrity.

Hiring a Brooklyn real estate agent provides many benefits to home buyers and home sellers in our area. By all means, you should take the time to interview several agents and check references to be confident you have the right agent in your corner. 

Questions you should ask when interviewing a Brooklyn real estate agent:

1. How long have you been a real estate agent?
2. What is your sales history?
3. What sets you apart from other agents?
4. How will you help me buy or sell a home?
5. Do you require a contract? If so, can you cancel for any reason?
6. What is your marketing plan or buying strategy for me?
7. What is your commission rate?
8. Do you charge any additional fees?
9. How do you communicate with your clients?
10. What haven’t I asked you that I should?

Your Brooklyn real estate agent should be a trusted partner in the buying or selling process. As a result, you can embark on your real estate journey with confidence that you are well represented. A trusted real estate agent is the foundation of your real estate team. Find out about other parties involved in the process in this previous blog post.

Contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate. As a Brooklyn real estate agent with over 30 years of experience, I am the trusted partner you are looking to find. I can be reached by phone at (718) 253-9500 ext. 1901 or by email at [email protected].

If you’ve entered the real estate market as a first-time homebuyer, you may be feeling a little overwhelmed. And that’s totally understandable. It is the biggest purchase you’ll ever make after all! But where do you start? What should you know before investing in homeownership? Here’s the best advice for first-time homebuyers. Read on and put your mind at ease.

Advice for First-Time Homebuyers

In a seller’s market, inventory is low. That means bidding wars are going to happen. And the seller ends up selling for a higher price than what the house was initially listed for. That’s great for the seller! But this means you as a buyer need to be prepared and available to act quickly. You should also be prepared to lose out on a few homes before purchasing the home you really want.

1. Find Out How Much Home You Can Afford

Speak with a mortgage broker (preferably several) and find out how much you can afford to pay for a home. And don’t forget to allow for the monthly costs of homeownership. There’s more to owning a home than paying the monthly mortgage. Owning a home means electricity, water, gas, sewer, and maintenance.

2. Know Your Credit Score

First-time homebuyers need to know their credit score before doing anything. Lenders set their own credit score requirements and may require a minimum score higher than 580.

3. Get Pre-Approved for a Mortgage Loan

While knowing how much you can afford is your very important first step, sellers will be much more receptive to potential buyers who have been pre-approved. You’ll also avoid being disappointed when going after homes that are out of your price range.

With pre-approval, the buyer actually applies for a mortgage and receives a commitment in writing from a lender. This way the seller knows immediately that you are a serious buyer for that property.

Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close on your loan.

4. Hire a Buyer’s Agent

Reach out to and hire a buyer’s estate agent, someone who is looking out for your interests, not the seller’s. It’s free.

5. Communicate Clearly Your Lists of Needs and Wants

Make two lists. And be as specific as you can be. The more specific you are, the more your real estate agent can help you in finding the home that’s perfect for you.

The first list should include items you must have (the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.).

The second list is your wish list, things you would like to have (pool, den, etc.) but aren’t absolutely necessary. Realistically, you probably won’t get everything on your wish list as a first-time homebuyer. But the lists will keep you on track for what you are looking for.

6. Stay Focused and Be Organized

Keep the following items handy. They’ll help you maximize your home search efforts.

• Maps – One or more detailed maps with the areas you’re interested in highlighted
• File – A file of the properties your agent has shown to you and ads you have collected
• Notebook and Pen – Take notes on each home you walk through
• Camera – A camera or video camera will help refresh your memory on individual properties, especially if you’re visiting more than five homes

7. Look at a Property with the Eyes of a Seller

Look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive and negative features of the area? Think access to shopping, parks, freeways or abandoned properties, garbage dumps, noise, heavy traffic.

8. Visualize the House Empty and with Your Décor

Will the home meet your needs now as well as three to five years from now? Are the rooms laid out in a way that the home will accommodate your family? Is there enough light? What about outlets and storage space?

9. Be Objective

Instead of thinking with your heart when you find a home, think with your head. Too often, first-time homebuyers succumb to their emotions and allow themselves to become attached to a less than desirable property.

Spend time researching the local market trends and make sure your finances are suitable for a home purchase.

Purchasing a property should never be a rushed process. There are many houses on the market. Don’t make a hurried decision that you may regret later.

10. Be Thorough

A few extra dollars well spent now will save you big expenses in the long run.

• Include inspection and mortgage contingencies in your written offer
• Have the property inspected by a professional inspector
• Request a second walk-through to take place within 24 hours of closing (Check to see that no changes have been made that were not previously agreed upon. For example, a nice chandelier that you assumed came with the sale has been replaced with a cheap ceiling light).

11. Know the Home-Buying Process

 Review the home-buying process with your real estate agent

• timing of a purchase
• costs you need to be prepared for beyond closing costs
• whether the market is a seller’s market or buyer’s market

The Most Important Advice for First-Time Homebuyers

Above all, the best piece of advice for first-time homebuyers is to choose a real estate agent with these three qualities:

• Trustworthiness
• Excellent communication
• Quick responsiveness

Charles D’Alessandro is a real estate agent you will connect with personally and professionally. You feel comfortable confiding in and trusting him with the most expensive purchase of your life.

Need advice for first-time homebuyers? Contact Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate. Call (718) 253-9600 ext. 206 or email [email protected] and get your questions answered. He is the Brooklyn Expert connecting clients with Brooklyn homes for over 30 years. He knows the Brooklyn area inside and out.

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Charles D’Alessandro
Your Brooklyn Real Estate Agent
718-253-9600 ext. 206
[email protected]

37. WHAT ARE THE ADVANTAGES OF 15- AND 30-YEAR LOAN TERMS?

30-Year:

	In the first 23 years of the loan, more interest is paid off than principal, meaning larger tax deductions.
	As inflation and costs of living increase, mortgage payments become a smaller part of overall expenses.

15-year:

	Loan is usually made at a lower interest rate.
	Equity is built faster because early payments pay more principal.

38. CAN I PAY OFF MY LOAN AHEAD OF SCHEDULE?

Yes. By sending in extra money each month or making an extra payment at the end of the year, you can accelerate the process of paying off the loan. When you send extra money, be sure to indicate that the excess payment is to be applied to the principal. Most lenders allow loan prepayment, though you may have to pay a prepayment penalty to do so. Ask your lender for details.

39. ARE THERE SPECIAL MORTGAGES FOR FIRST-TIME BROOKLYN HOME BUYERS?

Yes. Lenders now offer several affordable mortgage options which can help Brooklyn  first-time home buyers overcome obstacles that made purchasing a home difficult in the past. Lenders may now be able to help borrowers who don’t have a lot of money saved for the down payment and closing costs, have no or a poor credit history, have quite a bit of long-term debt, or have experienced income irregularities.

40. HOW LARGE OF A DOWN PAYMENT DO I NEED?

There are mortgage options now available that only require a down payment of 5% or less of the purchase price. But the larger the down payment, the less you have to borrow, and the more equity you’ll have. Mortgages with less than a 20% down payment generally require a mortgage insurance policy to secure the loan. When considering the size of your down payment, consider that you’ll also need money for closing costs, moving expenses, and – possibly -repairs and decorating.

41. WHAT IS INCLUDED IN A MONTHLY MORTGAGE PAYMENT?

The monthly mortgage payment mainly pays off principal and interest. But most lenders also include local real estate taxes, homeowner’s insurance, and mortgage insurance (if applicable).

42. WHAT FACTORS AFFECT MORTGAGE PAYMENTS?

The amount of the down payment, the size of the mortgage loan, the interest rate, the length of the repayment term and payment schedule will all affect the size of your mortgage payment.

43. HOW DOES THE INTEREST RATE FACTOR IN SECURING A MORTGAGE LOAN?

A lower interest rate allows you to borrow more money than a high rate with the some monthly payment. Interest rates can fluctuate as you shop for a loan, so ask-lenders if they offer a rate “lock-in”which guarantees a specific interest rate for a certain period of time. Remember that a lender must disclose the Annual Percentage Rate (APR) of a loan to you. The APR shows the cost of a mortgage loan by expressing it in terms of a yearly interest rate. It is generally higher than the interest rate because it also includes the cost of points, mortgage insurance, and other fees included in the loan.

44. WHAT HAPPENS IF INTEREST RATES DECREASE AND I HAVE A FIXED RATE LOAN?

If interest rates drop significantly, you may want to investigate refinancing. Most experts agree that if you plan to be in your house for at least 18 months and you can get a rate 2% less than your current one, refinancing is smart. Refinancing may, however, involve paying many of the same fees paid at the original closing, plus origination and application fees.

45. WHAT ARE DISCOUNT POINTS?

Discount points allow you to lower your interest rate. They are essentially prepaid interest, With each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage, the interest rate is reduced by 1/8 (or.125) of a percentage point. When shopping for loans, ask lenders for an interest rate with 0 points and then see how much the rate decreases With each point paid. Discount points are smart if you plan to stay in a home for some time since they can lower the monthly loan payment. Points are tax deductible when you purchase a home and you may be able to negotiate for the seller to pay for some of them.

46. WHAT IS AN ESCROW ACCOUNT? DO I NEED ONE?

Established by your lender, an escrow account is a place to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner’s insurance, mortgage insurance (if applicable), and property taxes. Escrow accounts are a good idea because they assure money will always be available for these payments. If you use an escrow account to pay property tax or homeowner’s insurance, make sure you are not penalized for late payments since it is the lender’s responsibility to make those payments.

FIRST STEPS

47. WHAT STEPS NEED TO BE TAKEN TO SECURE A LOAN?

The first step in securing a loan is to complete a loan application. To do so, you’ll need the following information.

	Pay stubs for the past 2-3 months
	W-2 forms for the past 2 years
	Information on long-term debts
	Recent bank statements
	tax returns for the past 2 years
	Proof of any other income
	Address and description of the property you wish to buy
	Sales contract

During the application process, the lender will order a report on your credit history and a professional appraisal of the property you want to purchase. The application process typically takes between 1-6 weeks.

48. HOW DO I CHOOSE THE RIGHT LENDER FOR ME?

Choose your lender carefully. Look for financial stability and a reputation for customer satisfaction. Be sure to choose a company that gives helpful advice and that makes you feel comfortable. A lender that has the authority to approve and process your loan locally is preferable, since it will be easier for you to monitor the status of your application and ask questions. Plus, it’s beneficial when the lender knows home values and conditions in the local area. Do research and ask family, friends, and your real estate agent for recommendations.

49. HOW ARE PRE-QUALIFYING AND PRE-APPROVAL DIFFERENT?

Pre-qualification is an informal way to see how much you maybe able to borrow. You can be ‘pre-qualified’ over the phone with no paperwork by telling a lender your income, your long-term debts, and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house.

Pre-approval is a lender’s actual commitment to lend to you. It involves assembling the financial records mentioned in Question 47 (Without the property description and sales contract) and going through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.

50. HOW CAN I FIND OUT INFORMATION ABOUT MY CREDIT HISTORY?

There are three major credit reporting companies: Equifax, Experian, and Trans Union. Obtaining your credit report is as easy as calling and requesting one. Once you receive the report, it’s important to verify its accuracy. Double check the “high credit limit,”‘total loan,” and ‘past due” columns. It’s a good idea to get copies from all three companies to assure there are no mistakes since any of the three could be providing a report to your lender. Fees, ranging from $5-$20, are usually charged to issue credit reports but some states permit citizens to acquire a free one. Contact the reporting companies at the numbers listed for more information.

CREDIT REPORTING COMPANIES

Company Name	Phone Number
Experian	1-888-397-3742
Equifax	1-800-685-1111
Trans Union	1-800-916-8800

51. WHAT IF I FIND A MISTAKE IN MY CREDIT HISTORY?

Simple mistakes are easily corrected by writing to the reporting company, pointing out the error, and providing proof of the mistake. You can also request to have your own comments added to explain problems. For example, if you made a payment late due to illness, explain that for the record. Lenders are usually understanding about legitimate problems.

52. WHAT IS A CREDIT BUREAU SCORE AND HOW DO LENDERS USE THEM?

A credit bureau score is a number, based upon your credit history, that represents the possibility that you will be unable to repay a loan. Lenders use it to determine your ability to qualify for a mortgage loan. The better the score, the better your chances are of getting a loan. Ask your lender for details.

53. HOW CAN I IMPROVE MY SCORE?

There are no easy ways to improve your credit score, but you can work to keep it acceptable by maintaining a good credit history. This means paying your bills on time and not overextending yourself by buying more than you can afford.

FINDING the RIGHT LOAN for YOU

54. HOW DO I CHOOSE THE BEST LOAN – PROGRAM FOR ME?

Your personal situation will determine the best kind of loan for you. By asking yourself a few questions, you can help narrow your search among the many options available and discover which loan suits you best.

	Do you expect your finances to changeover the next few years?
	Are you planning to live in this home for a long period of time?
	Are you comfortable with the idea of a changing mortgage payment amount?
	Do you wish to be free of mortgage debt as your children approach college age or as you prepare for retirement?

Your lender can help you use your answers to questions such as these to decide which loan best fits your needs.

55. WHAT IS THE BEST WAY TO COMPARE LOAN TERMS BETWEEN LENDERS?

First, devise a checklist for the information from each lending institution. You should include the company’s name and basic information, the type of mortgage, minimum down payment required, interest rate and points, closing costs, loan processing time, and whether prepayment is allowed.

Speak with companies by phone or in person. Be sure to call every lender on the list the same day, as interest rates can fluctuate daily. In addition to doing your own research, your real estate agent may have access to a database of lender and mortgage options. Though your agent may primarily be affiliated with a particular lending institution, he or she may also be able to suggest a variety of different lender options to you.

If you would like to follow this series of questions and answers about buying your New Brooklyn Home Check it out here

If you’re looking for an experienced, energetic, resourceful  Brooklyn real estate agent or just have a few questions, give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]

25. DO I REALLY NEED HOMEOWNER’S INSURANCE?

Yes. A paid homeowner’s insurance policy (or a paid receipt for one) is required at closing, so arrangements will have to be made prior to that day. Plus, involving the insurance agent early in the home buying process can save you money. Insurance agents are a great resource for information on home safety and they can give tips on how to keep insurance premiums low.

26. WHAT STEPS COULD I TAKE TO LOWER MY HOMEOWNER’S INSURANCE COSTS?

Be sure to shop around among several insurance companies. Also, consider the cost of insurance when you look at homes. Newer homes and homes constructed with materials like brick tend to have lower premiums. Think about avoiding areas prone to natural disasters, like flooding. Choose a home with a fire hydrant or a fire department nearby.

27. IS THE HOME LOCATED IN A FLOOD PLAIN?

Your real estate agent or lender can help you answer this question. If you live in a flood plain, the lender will require that you have flood insurance before lending any money to you. But if you live near a flood plain, you may choose whether or not to get flood insurance coverage for your home. Work with an insurance agent to construct a policy that fits your needs.

28. WHAT OTHER ISSUES SHOULD I CONSIDER BEFORE I BUY MY BROOKLYN HOME?

Always check to see if the house is in a low-lying area, in a high-risk area for natural disasters (like earthquakes, hurricanes, tornadoes, etc.), or in a hazardous materials area. Be sure the house meets building codes. Also consider local zoning laws, which could affect remodeling or making an addition in the future. Your real estate agent should be able to help you with these questions.

29. HOW DO I MAKE AN OFFER?

Your real estate agent will assist you in making an offer, which will include the following information:

	Complete legal description of the property
	Amount of earnest money
	Down payment and financing details
	Proposed move-in date
	Price you are offering
	Proposed closing date
	Length of time the offer is valid
	Details of the deal

Remember that a sale commitment depends on negotiating a satisfactory contract with the seller, not just Making an offer.

Other ways to lower ins-insurance costs include insuring your home and car(s) with the same company, increasing home security, and seeking group coverage through alumni or business associations. Insurance costs are always lowered by raising your deductibles, but this exposes you to a higher out-of-pocket cost if you have to file a claim.

30. HOW DO I DETERMINE THE INITIAL OFFER?

Unless you have a buyer’s agent, remember that the agent works for the seller. Make a point of asking him or her to keep your discussions and information confidential. Listen to your real estate agent’s advice, but follow your own instincts on deciding a fair price. Calculating your offer should involve several factors: what homes sell for in the area, the home’s condition, how long it’s been on the market, financing terms, and the seller’s situation. By the time you’re ready to make an offer, you should have a good idea of what the home is worth and what you can afford. And, be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.

31. WHAT IS EARNEST MONEY? HOW MUCH SHOULD I SET ASIDE?

Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and conditions). If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal, you may forfeit the entire amount.

32. WHAT ARE “HOME WARRANTIES”, AND SHOULD I CONSIDER THEM?

Home warranties offer you protection for a specific period of time (e.g., one year) against potentially costly problems, like unexpected repairs on appliances or home systems, which are not covered by homeowner’s insurance. Warranties are becoming more popular because they offer protection during the time immediately following the purchase of a home, a time when many people find themselves cash-strapped.

GENERAL FINANCING QUESTIONS:THE BASICS

33. WHAT IS A MORTGAGE?

Generally speaking, a mortgage is a loan obtained to purchase real estate. The “mortgage” itself is a lien (a legal claim) on the home or property that secures the promise to pay the debt. All mortgages have two features in common: principal and interest.

34. WHAT IS A LOAN TO VALUE (LTV) HOW DOES IT DETERMINE THE SIZE OF MY LOAN?

The loan to value ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. Each loan has a specific LTV limit. For example: With a 95% LTV loan on a home priced at $50,000, you could borrow up to $47,500 (95% of $50,000), and would have to pay,$2,500 as a down payment.

The LTV ratio reflects the amount of equity borrowers have in their homes. The higher the LTV the less cash homebuyers are required to pay out of their own funds. So, to protect lenders against potential loss in case of default, higher LTV loans (80% or more) usually require mortgage insurance policy.

35. WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?

Fixed Rate Mortgages: Payments remain the same for the the life of the loan

Types

	15-year
	30-year

Advantages

	Predictable
	Housing cost remains unaffected by interest rate changes and inflation.

Adjustable Rate Mortgages (ARMS): Payments increase or decrease on a regular schedule with changes in interest rates; increases subject to limits

Types

	Balloon Mortgage- Offers very low rates for an Initial period of time (usually 5, 7, or 10 years); when time has elapsed, the balance is clue or refinanced (though not automatically)
	Two-Step Mortgage- Interest rate adjusts only once and remains the same for the life of the loan
	ARMS linked to a specific index or margin

Advantages

	Generally offer lower initial interest rates
	Monthly payments can be lower
	May allow borrower to qualify for a larger loan amount

36. WHEN DO ARMS MAKE SENSE?

An ARM may make sense If you are confident that your income will increase steadily over the years or if you anticipate a move in the near future and aren’t concerned about potential increases in interest rates.

If you would like to follow this series of questions and answers about buying your New Brooklyn Home Check it out here

If you’re looking for an experienced, energetic, resourceful  Brooklyn real estate agent or just have a few questions, give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]