In the midst of one of the most uncertain real estate markets in history, it’s more important than ever to be informed. In a continuing series, we take a look at some of the most pressing questions about mortgages, refinancing, home equity, and other real estate options available to you.
Whether you’re a first-time home buyer, or you’re in the market for another real estate investment, there’s more involved than simply applying for a loan. Understanding the different mortgage options is the first step towards selecting a loan you can live with.
FIXED RATE MORTGAGE: These mortgages are exactly as labeled – the interest rate stays the same over the entire term of the loan. These loans can extend for 15, 20, or 30-year terms. The benefit of these loans is always knowing what you will pay each month. But if you have secured a higher interest rate, that can work against you unless you refinance.
ADJUSTABLE-RATE MORTGAGE (ARM): These mortgages usually begin at a lower interest rate than fixed-rate loans. After a specified period of time, rates can rise or fall according to market value and the terms of the loan. For example, one-year ARMs will pay low rates the first year, then each year after that the rates will change depending on current values. Terms can vary widely in these types of loans. Often borrowers like ARMs in order to qualify for higher loan amounts. But these mortgages can be risky, and are often not recommended for borrowers planning on owning the same home for over 10 years.
FEDERAL HOUSING ADMINISTRATION (FHA) LOAN: Designed for borrowers who may not qualify for typical mortgages, these loans are available at lower down payments and potentially lower rates. The total value of the loan may be more limited than those mortgages available from banks and other lenders. A similar type of loan comes from the Veterans Administration, offering guaranteed low-down-payment loans for eligible veterans, active duty personnel, and surviving spouses.
BALLOON MORTGAGE: These loans offer fixed-rates with relatively low payments for a fixed introductory period. After this time, the entire balance of the loan is due. If borrowers are responsible and plan to sell before the introductory period is complete, this can be a cost-savings option. But it is also quite risky if the principal can’t be paid or refinancing won’t work.
INTEREST-ONLY MORTGAGE: For an initial fixed term, borrowers only pay the interest every month on these types of mortgages. After this initial period, the balance of the loan is due. That could translate to paying a lump sum or being responsible for larger payments each month. REVERSE MORTGAGE: Designed for seniors, these loans turn home equity into cash. Borrowers do not have to pay back the principal or interest for as long as they live in the home. This type of mortgage can often be too good to be true depending on the lender, but federally insured options are available.
If you want to pay off debt or make home improvements, a home equity loan might be just the ticket, but if you want a better interest rate, you might consider refinancing. Learn the difference and when each makes sense—and when it doesn’t.
Here is the answer to the question, and where you can start researching.
Requirements and Application Process Applications are available in the Probate Court Office Records Department or online http://jeffcoprobatecourt.com You must be 18 years of age or older to apply. You must be a resident of Jefferson County to apply. Proof of residence will be verified through the Board of Registrars or with two forms of proof of residence such as Driver’s License, utility bill, rent receipt. Applicants need to complete the application listing all information as it appears on the Voter Registration or Driver’s License. You must have three separate references from Jefferson County residents who will attest to your integrity and suitability. References must sign in their own handwriting and include their home address. NOTE: A renewal does not require the three references, its renewal takes place within 30 days before or after expiration. You must obtain a $25,000.00 Surety Bond. You can get it at almost any insurance company. Be sure to have your signature notarized on the Bond in the Oath of Office section within the Bond. You must submit your Bond and application within 30 days of the “Seal Date” on the Bond, or have the Seal Date updated by your Bonding Company (Insurance Co.).If your Bond/Application is returned to you for corrections, you must resubmit it after corrections are made in order for your Commission to be processed. Once you have completed your application and have your Bond properly notarized, either mail or bring the application, Bond, and a $42.00 filing fee check made payable to the “Judge of Probate”.You will receive a Certificate of Commission effective on the date you return the required documents. The commission is good for four years from that date. To view or print the APPLICATION for Appointment as a Notary Public, click here.
In addition to covering your home, homeowners insurance also covers four more things:
Your outbuildings, landscaping, and hardscaping. If you have outbuildings (like a barn), landscaping, or hardscaping (like fences), your homeowner’s policy most likely covers those for up to 10% of your policy amount (5% for plants).
For example, if you have $100,000 in homeowners insurance and someone drives into your fence, the policy would cover 10% or $10,000 in repairs.
Sometimes policies exclude damage to outbuildings, landscaping, or hardscaping caused by a particular peril (like wind).
Damage or loss of your personal belongings. Your homeowner’s policy covers your family’s belongings, even when you take them out of the house. If your child heads to college with a laptop and it’s stolen, that’s probably covered by your homeowner’s insurance policy.
A home insurance policy covers a lot of your personal belongings, but not necessarily everything.
You’ll need additional insurance if you have many expensive items like jewelry, furs, or antiques.
Policies will either state that your personal belongings are insured for replacement cost or cash value.
Replacement cost means that the insurance company will pay the full cost of replacing an item (such as the laptop mentioned above, or a sofa damaged in a fire) once you show a receipt. Cash value means the insurance company will issue you a check for the amount that the laptop or sofa would have been worth when it was stolen or destroyed.
III. Remember your Additional Living Expenses will have limits. You are still on a budget. If you exceed that budget you may have to come out of pocket. Your policy will have limits on how long you stay and how much you can spend.
Injuries or accidents at your house. Homeowner’s insurance coverage includes liability – meaning it covers you when you or your family members cause injuries or damage. This coverage also pays when your dog bites someone (medical payments) or someone falls and injures themselves.
We’re getting closer to storm season. 2017 was devastating. Check with your agent and make sure you are prepared.