Pam DeGemmis' Blog
If you’re planning on buying a home in the near future and are confused about many of the terms associated with mortgages, you’re not alone. Real estate is its own industry with its own set of processes, terms, and acronyms. If you’re new to the home buying process, there can be somewhat of a learning curve to understand what each of these terms means.
Since buying a home is such a huge investment and life decision, there’s a lot of pressure on home buyers to make sure they get everything right. This makes for a stressful situation for buyers who don’t feel like they understand the terminology of things like mortgages, appraisals, credit reports, and other factors that contribute to the home buying process.
To alleviate some of those concerns and to make the home buying process run more smoothly, we’ve compiled a list of the most common, and most commonly confused, real estate words, terms, and acronyms. That way, when you’re talking things over with your real estate agent or your mortgage lender, you’ll be confident that you understand exactly what’s being considered.
Read on for our real estate terminology glossary.
Adjustable rate mortgage (ARM) - This is one type of home loan. Mortgage rates with this type of loan fluctuate throughout the repayment term of the loan. The fluctuation is based on a market indicator.
Fixed rate mortgage (FRM) - Another type of home loan, a fixed rate mortgage has a rate which does not fluctuate, remaining constant for the life of the term, most commonly 15 or 30 years.
Appraisal - An appraisal is the determination of the value of a property. Appraisals are used when purchasing and selling a home, as well as when refinancing a home loan. Appraisers are required to be licensed or certified in each state and are usually paid for by the lender.
Appreciation - An increase in a property’s value, most commonly due to market inflation, or the general increase in home prices over time.
Depreciation - A decrease in a property’s value, due to either market deflation (uncommon) or the wear and tear on a home that comes with age.
Closing costs - The costs and fees that a buyer is responsible for when purchasing a home or taking out a mortgage. These include underwriting fees, inspections, appraisals, transfer taxes, and more. Closing costs typically range from 2% to 5% of the total loan amount.
Contingency - Home purchases have contracts to protect the interest of the buyer, seller, and lender. Contingencies are provisions designed to protect the buyer or lender should something occur in the time leading up to closing on (or purchasing) the home. One common contingency is the buyer’s right to have a final inspection of the home before closing to ensure no new issues with the home have occurred.
Private mortgage insurance (PMI) - Buyers who cannot afford a down payment of %20 typically are required to take out a private mortgage insurance policy. This policy protects the lender should the borrower default (fail to repay or meet the conditions of their loan).
Let's face it – most homebuyers have limited time and resources at their disposal. As such, it is crucial for buyers to do everything possible to optimize their time and resources throughout the property buying journey. Because if a buyer maximizes his or her time and resources, this individual can boost the likelihood of enjoying a successful homebuying experience.
Now, let's take a look at three tips to help a homebuyer get the most out of his or her time and resources.
1. Craft a Homebuying Strategy
If you know you want to buy a home, you should develop a property buying strategy. That way, you can map out the steps you'll need to take to find and acquire your dream residence.
A typical homebuying strategy should account for your budget, timeline and other property buying factors. If you analyze these factors, you could streamline your quest to discover your ideal house.
2. Narrow Your Home Search
You plan to buy a house as soon as possible, but you still have no idea where you want to reside. Fortunately, if you hone your house search to a few cities and towns, you may be able to quickly and effortlessly find a great home in an area you can enjoy for years to come.
As you get ready to start a home search, consider your long-term plans. For instance, if your ultimate goal is to work in a big city, you may want to focus on houses in or near major metros. Or, if you want to raise a family, you may want to search for residences near outstanding schools and parks.
In addition, perform lots of research into various cities and towns. If you conduct plenty of research, you can find out whether certain areas match or exceed your expectations and tailor your house search accordingly.
3. Collaborate with a Real Estate Agent
A real estate agent is a property buying expert who understands what it takes to find a terrific residence at a budget-friendly price. Thus, if you hire a real estate agent today, you can get the help you need to reap the benefits of a seamless home search.
Oftentimes, a real estate agent will meet with you, learn about your property buying goals and craft a personalized homebuying strategy. He or she also will respond to your homebuying concerns and questions throughout the property buying journey. By doing so, a real estate agent ensures you can receive expert support as you try to find your dream house.
A real estate agent will make it simple to search for houses that fall within your budget and correspond to your homebuying criteria too. Plus, if you want homebuying recommendations or suggestions, a real estate agent is happy to provide them.
Want to enjoy a fast, successful homebuying experience? Take advantage of the aforementioned tips, and you should have no trouble making the most of your time and resources as you search for your ideal house.
The Massachusetts Homestead Law is a very useful law that was put into place as a protection of homeowners’ property. The law may protect your home against the claims of creditors. The act applies to your home if:
- You live in the home or plan to live in it
- You use the home or plan to use the home as your primary residence
Things To Know About The Law
It does protect manufactured and mobile home
Homestead protection does not stop your home from being foreclosed on in the event that you don’t pay your mortgage
Declaration Of Homestead
You must declare that your property is a homestead property in the state of Massachusetts. This declaration will protect the equity value of your home from creditors. The equity of your home is what the “fair market value” of the home is. To calculate this value, find out what the value of your home is, then subtract all home equity loans, liens, and mortgages that you have against the house. The number that’s left is what the equity value of your home is.
When a Declaration Of Homestead is in place, you’re protected from creditors who would otherwise force you to use your equity so that you you can repay the debts that are owed. Without this protection, creditors can foreclose on your home. The only creditors that a Homestead does not protect you from are home loan companies, the IRS and legal child support obligations.
When the loan for your home is in good standing and a Homestead is in place in Massachusetts, the following applies:
A creditor cannot auction your home if you, other owners of your home, any family members, or any family members who move into your home at a future date live there. This means that even in the event of your death, these people will all be protected from creditors taking value from the property while they are living on the property.
Any family members who have debts and are living in the house are also protected under the Homestead Act in Massachusetts.
$125,000 is automatically protected.
A Homestead Declaration needs to be filed for up to $500,000 of protection to be initiated.
How A Declaration Of Homestead Is Filed
You’ll need to go to the Registry Of Deeds in the county where the property is located in Massachusetts to file a Declaration Of Homestead. The document will need to be notarized and there is a fee associated with filing. You may be asked if you’d like to file the Homestead Protection during the purchase agreement signing for your Massachusetts home. Note that if a lien was put on your property before the Homestead Declaration is filed, you are not protected.
Talk to your real estate attorney and realtor for more details and information on how to file a Homestead Declaration when you purchase your Massachusetts home.
Moving into a new home can be an overwhelming time. You’ll be trying to match what you already have with new pieces, meticulously decorating the blank canvas that is your new space. Every task that you complete, you do to make your home your own.
One part of decorating your home that you’ll definitely want to take your time with is that of choosing artwork for the walls. You don’t just want to take any piece of art to fill up the blank spaces. Choosing artwork should take some thought and time. Below, you’ll find tips on picking the right artwork for all the rooms of your home.
Use What Inspires You
The artwork in your home should remind you of what you love and jog your creativity and motivation. A picture or piece of art can bring you peace and joy just by viewing it. That’s why you wouldn’t want to put just anything on your walls. You’ll be looking at whatever kinds of pictures and statues that you put up each day, so make sure that it’s not something that bores you!
Art Is More Than A Museum
When the word “art” is mentioned, it’s more than being about paintings or classic versus contemporary. Art can be a photograph that you have taken or a small figurine that you bought while on vacation. These are the things that bring you joy after all! The bottom line is that artwork in your home doesn’t need to be fancy, it just has to represent you.
Take The Time To Shop
You may be tired of shopping after looking for the perfect sofa or bedroom set for your new home, but the shopping should continue. It’s best to take your time and not make impulse buys when it comes to buying artwork. Consider where a picture will go before you purchase it to place in your home.
Know The Focal Points In Your Home
It’s much easier to choose artwork if you know where the focal points are in each room of the house. A room with a fireplace, for example, should have the fireplace as the center of attention. Any art that is placed in the room is complementary to that main piece.
Go With Your Theme
If you have a theme going throughout your home, you’ll want to find art to match. A western sunset might not match too well with your mid-century modern styled dining room.
The key to finding artwork and decor for your home is to know what you like. Knowing the scheme and makeup in each room is a great start to decorating right.
Before you list your house, you'll need to establish a competitive price for it. That way, you can increase the likelihood of stirring up plenty of interest in your house as soon as it becomes available.
Now, let's take a look at three best practices for pricing your home.
1. Evaluate the Real Estate Market
The current real estate market's conditions can impact your ability to sell your residence. However, if you study the real estate market closely, you can differentiate between a buyer's and seller's market and plan accordingly.
In a buyer's market, the number of home sellers exceeds the number of homebuyers. As such, you likely will need to establish an aggressive price right away to separate your house from the competition.
On the other hand, a seller's market favors home sellers over homebuyers. If you're operating in a seller's market, you may be better equipped than ever before to earn a significant profit.
To differentiate between a buyer's and seller's market, examine the prices of recently sold homes and available homes in your area. This housing market data can provide deep insights into the current state of the housing market. Plus, this data can help you understand how your residence stacks up against the competition.
2. Conduct a Home Appraisal
Ultimately, a home appraisal can make a world of difference for any home seller, at any time.
During a home appraisal, a professional appraiser will examine your house both inside and out. Then, this appraiser will offer a valuation of your property based on his or her findings.
A home appraisal involves an evaluation of the current condition of your home, your house's age and your neighborhood. Therefore, if you complete a home appraisal, you should have no trouble using the appraisal results to help establish a fair price for your residence.
3. Collaborate with a Real Estate Agent
When it comes to selling a house, there is no need to work alone. Fortunately, if you collaborate with a real estate agent, you can receive expert insights into all aspects of the home selling cycle.
A real estate agent is happy to meet with you and learn about your home selling goals. Next, this housing market professional will offer home pricing recommendations, ensuring you can make an informed decision about how to price your house.
In addition, a real estate agent will go above and beyond the call of duty to ensure you can enjoy a seamless home selling experience. This housing market professional will promote your residence to large groups of homebuyers, set up home showings and open houses and put together an engaging and informative home listing. Also, a real estate agent will always keep you up to date about any offers on your home.
Looking to list your home in the near future? Use the aforementioned best practices, and you can establish a competitive price for your residence and boost your chances of a fast, profitable home sale.