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Different Types of Mortgages

Different Types of Mortgages

If you’re looking at becoming a first-time home owner, you may need to brush up on your mortgage knowledge. Talk to your real estate broker and see if they can recommend a lender for you to talk to about your mortgage options. Getting pre-approved when you’re house hunting can be a great advantage to getting the home that you want.

If you’re pre-approved you already know what sort of financial situation you are in, and what sort of mortgage you can afford. Therefore, you know what price point of homes you can look at, what price of homes that you can afford.

Learn about different types of mortgages here and talk to a lender and see which mortgage works better for you.

Fixed-rate mortgage

A fixed rate mortgage means that the interest rate for the loan, is locked in at the beginning of the mortgage agreement. Fixed rate mortgages can come in terms of 10-15-30 years. The most common of mortgages is a fixed rate 30 year mortgage. This provides the owner with the lowest mortgage payment per month, as it divides the loan into 30 years of payments, with a fixed rate of interest.

Fixed rate mortgages are also popular because they are the most predictable; the owner knows what their payment will be month to month for the entire timeline of their term in years.

Adjustable Rate Mortgages

There are many different types of adjustable rate mortgages(ARM), but the essential idea is that the interest rate can change over time.  If a home buyer gets a one year ARM, the interest rates on their loan change to the current market rate, once a year on the anniversary of their loan. This can be risky as you could wind up paying different amounts of mortgage payments from year to year. They payment amount may go down, but it also may go up.

10/1 ARM’s also change in interest as time goes on. This features a fixed interest rate for the first 10 years, but then is subject to change every year to the current market interest. This loan is typically for 30 years, and is typically used by homeowners who intend to pay their home off before the initial 10 years have passed.

Balloon Mortgages

Balloon mortgages feature a much shorter term and a fixed rate of interest, much like a fixed rate mortgage. The difference is that balloon mortgages feature a larger or balloon payment at the end of the loan. The monthly payments are lower and typically go to interest being accrued. Balloon mortgages are great for responsible borrowers, and typically are for people who intent to sell the house before the balloon payment is due. These mortgages can get tricky, as you’ll be required to re-finance if you can’t afford the balloon payment when it’s due.

Check out the different types of mortgages and see what you can afford, and how long a payment schedule you want to commit to. Talk to a lender to see what your options are and what makes the most sense for you.

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October real estate forecast shows drop in number of homes sold and home prices

The real estate market has slowed down since an eventful summer market. Even though things have slowed slightly in the Central Oregon Real Estate Market, November is promising to be a strong month for the year.

Median Home-sale price

In October, the number of homes sold dropped from September. The median home-sale price in Bend, Oregon, fell in October, which copies the trend from October of last year. The year-to-date median sales price continued to rise last month, adding a very small amount in October to the previous month’s figure. The median sales price has continued to rise each month in 2016.

The median sales price in September, of $385,750, dropped by 4.2 percent to $369,500.  September’s median sales price was the second-highest in the 10 years for which Duke Warner Realty has data. In three of the last four months, the median price has been less than $370,000, a threshold reached in May ($374,000), June ($370,000) and September.

Before 2016, October’s figure of $369,500 would have ranked as the second-highest for any month in the past 10 years, behind the high of $396,250, achieved in May 2007. This is a pretty impressive number considering Central Oregon’s trends concerning the real estate market.

Number of homes sold

 The number of homes sold has decreased, with the lowest number sold per month since March. One hundred ninety-two homes were sold in October, and 185 were sold in March. Sales and transactions aren’t processing as fast as they have in recent months, which is to be expected in the fall market. October’s total units sold was the lowest by 12 percent for the last couple of years. September finished with 229 homes sold.

Final Analysis

The median home sale price has dropped from September, just like it did in October of last year. Number of homes sold decreased from September to October, lowest since March. This can be attributed to a slower transaction process.

We expect to see a very active market in November, including pending sales moving the following months.

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The Pros and Cons of Owning a Timeshare

The Pros and Cons of Owning a Timeshare

If you’ve ever considered investing in a timeshare, there are many options to consider. You need to know how they work and if that fits into your yearly vacation plans. Here is a breakdown of what timeshares are and if they are a worthy real estate investment.

What are timeshares?

Timeshares are typically fully-furnished apartments or condos that you can pay to rent for certain weeks of the year. For example, you may pay to rent the same condo in Florida, for the same week or two of every year. You will sign a contract and pay a lump sum to ensure that for the time-period of the contract, every year the condo is yours for a specified date range. The average sales price of a share of a condo is $19,000, with a smaller yearly maintenance fee.

Some companies are offering a points system timeshare system, that can provide more flexibility. Users earn points that can be used at any time of year at certain hotel or property system. For example, if you buy into a hotel chain’s timeshare program, you have the flexibility of staying at any of those hotels locations, with some flexibility added in.

Cons

Timeshares can be a long-term financial commitment. Most timeshares don’t have an expiration date, meaning you’re saddled with a yearly maintenance fee until you sell your timeshare. This isn’t a problem if you use your timeshare every year, but if your enthusiasm wanes, getting rid of your timeshare could be slightly more difficult than selling a house.

If your finances aren’t exactly stable, investing in a timeshare may not be for you. You want to make sure that you can always afford the yearly maintenance fee. While affording a monthly mortgage is still something you need to plan for, a mortgage ends when the loan is paid off. Timeshare agreements don’t typically have end dates, so be prepared to pay fees until you get rid of the share.

Pros

You typically save on travel expenses, because you don’t have to pay for a place to stay. Cost per usage can work out when you factor in the cost of hotels on normal vacations. Because you have access to a full kitchen in most timeshares, you also can save money when you travel, due to less restaurant dining.

Some timeshare programs offer trades for users, letting them trade their weeks for shares in other locations. For example, you’ll give up your week at your normal timeshare in Florida, for a week in Spain.

One of the pros that timeshare users note is that you’re guaranteed a vacation once a year. Whether you rent your timeshare out, or trade it for another week, it’s certain that it forces you to take the time each year to take a break and go on a vacation.

If you’re concerned that the excitement of going to the same place every year may wear out, consider purchasing of a timeshare with a points system, so you can trade weeks and experience new locations.

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Showing your home in winter months

Showing your home in winter months

Perhaps you’re selling your home in the colder months. While it may be easier to sell a home with lush flowers, bursting garden beds and green grass, there are ways to highlight a home in colder months to make it appealing to potential buyers.

For potential buyers

If you’re looking at buying a home in warmer months, it’s important to know how the house is heated. Heat can be a major expense in some homes. Older homes may feature older heating systems, which can cause you more money in utilities in the long run.

Know how warm the house typically stays. Try to find out if the house hold’s heat well, or if it’s drafty. This doesn’t strictly apply to older homes. Newer homes can leak heat as well.

Know what sort of climate that you’re buying in. If it’s cold all the time, your heating system is important to consider. If you’re buying in a mostly warm climate, it may not be that important.

If the home you’re looking at is in a very cold climate you may want to consider roads leading to your house, or your driveway. If there’s only one way to get to your house, and it features an extremely steep hill that’s prone to ice, you may want to reconsider the home.

For homeowner’s selling

Make sure to inform your listing agent how your home is heated. If your heating system is outdated, updating it could make your home more attractive to potential buyers, and help you get more value when you sell your home.

Highlight warmer areas of your home, like a central fireplace in a family or living room. Be sure to flaunt any additional warmer features, like heated floors or a master bedroom fireplace. These are features that will entice buyers.

Selling a home in the fall or winter

Some people think that buying or selling a home in the fall or winter is a bad idea. Typically the housing market has more listings in the spring and summer, as people believe this is the “perfect time to buy.” The reality is, people buy homes year round, and in the colder months you’ll find more serious home buyers. Buyers in cooler months tend to be more serious. They need a home now which is why they’re looking.

Take Away

The housing market doesn’t fall flat in any market in the colder months. People will always need homes, and sometimes they can’t or don’t want to wait for warmer months. Make your home seem as cozy as possible and highlight any unique heat-related features. If you’re looking for a home, be sure to consider how it’s heated, what your utilities could look like, and what sort of climate you’re in.