Jill Finkelstein - Compass



Posted by Jill Finkelstein on 12/8/2019

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Many people own homes through a mortgage agreement. Traditional mortgages are primarily fully amortized or gradually paid off with regular payments over the lifetime of the loan. Each payment contributes to both the principal and the interest.

A balloon mortgage is a short-term home loan with fixed-rate monthly payments that only take care of accrued interest on the loan for a set period. It also has a large “balloon” payment to cover the rest of the principal.

The payment plan is based mainly on a fifteen- or thirty-year mortgage, with small monthly payments until the due date for the balloon payment. These low regular payments partly cover the loan but require paying the remainder of the unpaid principal as a lump sum. Selling the house or refinancing the balloon loan before the payment is due is how most buyers approach this situation.

Key Issues with Balloon Mortgages

Lenders present a deadline by which the balloon payment is due (three- to seven-year period). The enormous amount is often more than borrowers can easily handle at once.

Paying only interest on a loan does not allow equity to build. Many homeowners use equity as a means to complete home improvements or other projects. Building equity also helps homeowners when it comes time to sell their home because a traditional mortgage reduces over time. 

Why People Opt for Balloon Loans

It is possible to refinance a balloon mortgage or sell the property before the balloon payment is due but it can be difficult to do so. A dry housing market, job loss, or low credit score are potential obstacles. Lay-offs and depressed home values can trap buyers in their balloon loans. Without the option to sell, refinance, or fulfill their balloon payments, borrowers may end up in foreclosure.

The One True Strategy

Traditional loans are generally safer than balloon mortgages. To keep housing costs at a minimum, use a balloon mortgage if you are sure you can exit before the balloon payment comes due. Otherwise, it is best to remain in the realm of traditional loans.

Review the pros and cons of taking a balloon loan before committing to it. Speak to your financial planner or realtor for professional guidance.




Tags: Mortgage   homebuyers   Financing  
Categories: Uncategorized  


Posted by Jill Finkelstein on 4/14/2019

Are you planning to move away from the bustle and frenzy of a major commercial city and want to settle in some peaceful, serene environment? If you answered yes, purchasing a home in suburban neighborhoods is probably on your to-do list already.

Buying a home is a substantial investment; therefore, it requires proper planning and careful considerations before jumping into it so as not to incur significant losses. There are many factors to consider before buying a home, especially in the suburbs, and highlighted below are some of the most crucial to be aware of: 

Parking space

One thing that most homebuyers want is enough space for their vehicles. In some suburban areas, there is ample space for street parking. However, in other places, the reverse is the case. If the home doesn't have a parking space or garage, you should look for street parking at various times of the day. The presence of none indicates that you should look for hidden parking. Some neighborhoods are served by rail service too but parking a car near the station to ease your commute might pose a challenge. Avoid the mistake of assuming you will always find parking.

Flooding risk

Some suburban areas are at risk of flooding. This risk is because there may be natural water sources that rise quickly when it rains heavily. Since the safety of both your family and your soon to be acquired property is a priority, it is essential to check for flooding risks before buying the home.

Need for renovation

Suburbs usually have a lot of older buildings and construction, which brings with it the need to renovate some homes when you purchase. If you do not have home renovations in your budget, find yourself a good home without the need for many improvements. However, if you do not mind making improvements, there is no harm in spending on your comfort and style choices.

Accessibility

Schools, shopping facilities, recreational centers, and other essential places may be a considerable distance from your home. Buying a home where these facilities are not readily available will not only isolate you, but it will incur more costs ongoing. Spend time researching the entire community before making such a move so that you know where to find services and shopping.

The condition of the structure and yard

You probably have a kind of structure in mind before going through a real estate site with home listings, which will help to narrow your search and ensure you get what you want. Many homebuyers choose the suburbs because of the tranquility and greenery — some want to tend to their gardens. If a suburban landscape is on your list, you should make sure the yard has enough space for a garden and a lawn you can craft to reflect your taste.

Discuss all your property needs—and desires—with your real estate agent to know what is on the market that meets your requirements.




Tags: Real Estate   homebuyers   suburbs  
Categories: Uncategorized  




Jill Finkelstein