1. Flood Insurance Is Often Required—and Can Add to Your Monthly Costs If you’re using a mortgage to buy a home in a high-risk flood zone, your lender will likely require flood insurance. Here’s what to keep in mind: Premiums can range from a few hundred to several thousand dollars per year, depending on the property’s risk […]
1. Market Value Is What a Buyer Will Pay Market value is the price your home would likely sell for in today’s market. It’s determined by: Location and neighborhood trends The condition and features of the home Comparable recent sales (comps) Appraisers, real estate agents, and buyers all use market value as the real-time price tag of your
1. Ask the Seller to Lower the Price If the home appraises for less than what you offered, your lender won’t finance the full purchase amount. One of the first steps is to negotiate with the seller to lower the price to match the appraised value. Sellers often agree—especially if they want to keep the deal alive
1. An Amortization Schedule Breaks Down Every Payment Your amortization schedule is like a detailed receipt for your entire loan. It shows: How much of each payment goes toward interest How much goes toward paying down the principal Your remaining loan balance after each payment It covers every single month, from your first payment to your last—and it helps you visualize
1. You Have a Steady Income and Stable Employment Before anything else, lenders want to know you can consistently make your mortgage payments. If you’ve been employed for at least two years in the same field and your income is predictable, that’s a green flag. Consistent paychecks = predictable monthly payments Stable job history = stronger mortgage
1. An ARM Starts With a Lower Interest Rate Than a Fixed Mortgage One of the biggest appeals of an ARM is the initial low interest rate, which is fixed for a set period—commonly 5, 7, or 10 years. Lower rate = lower monthly payment early on Can help you afford more home in the short term Ideal for buyers
1. A Special Assessment Is a One-Time Fee for Unexpected HOA Expenses While monthly HOA dues cover regular expenses like landscaping or pool maintenance, a special assessment is an extra charge that covers major, unplanned costs. These might include: Emergency roof or plumbing repairs Big upgrades to shared spaces (like elevators, fences, or driveways) Legal fees or insurance shortfalls after storms
1. A Short Sale Happens When the Seller Owes More Than the Home Is Worth In a short sale, the homeowner is trying to avoid foreclosure by selling the home for less than what they owe on their mortgage. The lender must approve the sale (since they’re taking a loss) It can take weeks—or even months—for approval There’s usually
1. A Bridge Loan Helps You “Bridge” the Gap Between Homes A bridge loan is a short-term financing tool that lets you use the equity in your current home to help purchase your next one. Here’s how it works: You borrow against the equity in your current home Use that money as a down payment on your new home Pay the loan
1. Pre-Qualification Is Just an Estimate Getting pre-qualified is like a financial snapshot. You tell the lender about your income, debt, and basic financial situation, and they give you a ballpark number for how much home you could afford. It’s quick, easy, and useful for planning — but it’s not based on verified information, so
1. Mortgage Interest and Property Tax Deductions Can Lower Your Taxable Income One of the biggest tax benefits of owning a home is the ability to deduct mortgage interest and property taxes from your taxable income. Mortgage interest deduction: You can deduct the interest you pay on your mortgage loan, which can add up to significant savings, especially in