Janie Bress - My North Shore Blog: Mortgage Loans for North Shore Real Estate

Friday, September 19, 2014

Mortgage Pre-Approval When Purchasing a North Shore Home?

Should I get pre-approved for my mortgage when buying North Shore real estate?

Mortgage Pre-Approval

In today’s market, seeking a pre-approval for a home loan is vital! While the real estate market on Chicago’s North Shore is continuing to improve, lending guidelines are still tight. Having a pre-approval for a mortgage will help to set you apart from other North Shore buyers. Here are 3 things that a mortgage pre-approval will do for you in your home buying process:

1) Establish your price range

By completing the pre-approval process before you begin your search, you will save yourself the time and energy of looking at homes for which you will not qualify. Establishing a price range will allow your realtor to quickly narrow down your options so that you can spend more time focusing on the features that you would like to have in your home.

2) Give you a competitive edge over other buyers.

It is not uncommon for sellers to get multiple offers on their homes. By having a pre-approval for a mortgage, it let’s the seller know that you are serious about purchasing the home and that you are also qualified to do so. If a seller is evaluating offers from a pre-approved buyer and one who is not, the pre-approved buyer will probably win.

3) Streamline your home buying process.

From the moment that you view your first home through the day that you sign on the dotted line, having a pre-approval can make the process much smoother and less stressful. Once you find the perfect home, you’re not going to want to wait days or weeks to find out if you are approved for a loan while worrying that another buyer is going to come in a scoop it up in the meantime.

Getting a pre-approval for a North Shore home loan can really help to simplify your home buying process. You will have to go through the approval process at some point no matter what, so why not get it out of the way early on? Please contact me if I can be of assistance in buying or selling your North Shore real estate!

Janie Bress
Your North Shore Real Estate Expert

North Shore Real Estate
View North Shore Listings
Visit My Website

Local Expert... with National Connections!

Locally or across the country, think of me as your national connection. I can help you with all your real estate needs anywhere in the United States

Sunday, July 6, 2014

North Shore Mortgage Options

Understanding the Different Types of Loans Available When Purchasing a North Shore Home

Home financing can be confusing, and yet it’s one of the most critical part of buying a home if you aren’t paying cash. There are so many different mortgage types out there, it can be difficult to know which one is right for you. As a long-time realtor on Chicago's North Shore, I’ve gained knowledge on many types of home loans. Here’s a rundown of the most common that you’ll encounter.

Fixed-Rate

This is the most common and standard type of mortgage loan. The terms range from 5 to 50 years, but most often a fixed-rate loan is a 30-year term. When you have a fixed rate mortgage, your interest is completely amortized over the term of the loan. Right now, fixed-rate interest rates are particularly low. As of earlier this week, a 30-year fixed loan rate was as low of 4.12%. The beauty of the payment on a fixed-rate mortgage is that it will remain the same for the entire term of the loan.

Interest-Only

This type of loan is not actually “interest-only”. It just allows the borrower the option to make payments in the amount of the monthly interest only for a certain period of time. Typically there is a limit on the amount of time that the borrower has this option, usually the first 5 to 10 years of the loan. Thereafter, the the full payment including principal must be made for the remainder of the term of the loan. This type of loan can be helpful to first-time buyers, as it does allow for a lower payment if one chooses to make an interest-only payment.

FHA

The Federal Housing Administration (FHA) is a division of the government that insures this type of home loan. By having this government insurance, the lender can require less than a 20% downpayment. Between that and the fact that the credit guidelines are not quite as stringent as a conventional loan, this can be a great option for first-time buyers. This type of loan, however, does have strict appraisal guidelines.

Adjustable-Rate

There are many varieties of adjustable-rate mortgages (ARMs). Depending on the type, your rate can change monthly, semi-annually, or annual. Some of these loans are fixed for a specific period of time, commonly 2-5 years, and then adjust for the remaining years of the term. The potentially scary part of this type of loan is the fact that one cannot predict what is going to happen with the economy and interest rates over the next 30 years, so it is possible for your monthly payment to go up significantly upon adjustment.

Combo/Piggyback

Having a combo loan basically means that you have two mortgages paid to two different lenders. This loan is appealing because it can allow for a smaller downpayment and eliminates the need for private mortgage insurance (PMI). Some of these loans will require 5-10% down, while others will require nothing down.

Since most buyers are not able purchase real estate on Chicago’s North Shore with cash, it’s a good idea to research your mortgage options if you’re considering a purchase. While there are numerous of types of loans and even subsets within the list above, chances are that your mortgage will fall into one of these five categories. Deciding which one is right for you will really depend on your credit and personal needs. For more guidance on home financing or for information on real estate on Chicago’s North Shore, please contact me. I have a passion for North Shore real estate and would be happy to assist you with all of your real estate needs.