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15 year vs 30 year loan comparison

May 11th, 2012 Categories: Questions and Answers

REAL ESTATE Q&A

Q. I’m thinking of refinancing my Crofton home, but I’ve been paying on my 6.5% loan for 12 years and don’t really want to re-start that 30–year term. What do you recommend?

A. If you haven’t refinanced your home since interest rates dropped below 4%, now is the time to get off the fence and do it.

Va and FHA borrowers will find it very easy to refinance, since you can take advantage of a streamline process that doesn’t require an appraisal, credit report, income verification or any of the other dreaded processing steps. You just have to be “on time” with payments for the past year. Even Conventional borrowers will find the aggravation of processing a new loan to be well worth the trouble at today’s record-low rates.

With the decision to refinance made, the next issue is this: 15 year or 30 year?

The payments on a 15 year loan will be a little higher than a new 30–year loan, but you’ll get a lower interest rate and build equity much faster.

Let’s look at an example of a $200,000 mortgage with the choice of a 30 year term @ 3.75% compared to a 15 year term @ 2.875%. The payments would be $442.94 higher on the shorter term but the equity would be considerably higher even after you adjust for the higher payments.

15 vs 30 year loan comparison

If you’ve been paying down a 30–year loan @ 6% for the past 12 years, your payment will remain about the same, but you could drop 3 years off the remaining term.

On the other hand, refinancing to a new 30 year loan could reduce your mortgage payment cash flow at a time when federal, state, and local taxes are going up, and retirement is on the horizon for you. This is an option that may be right for some borrowers, especially if cash flow is your Number 1 concern.

Contact me if you’d like a recommendation for a trusted Crofton area mortgage lender who can help you examine your options and make the right decision for your situation.

Chart and some content licensed by PatZaby.com

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Coming soon: Star-Spangled Sailabration, June 13–19, 2012.

An international parade of more than 40 tall ships and naval vessels sailing into Baltimore for the national launch of the Bicentennial of the War of 1812 and the writing of the Star-Spangled Banner. Star-Spangled Sailabration will feature free tours of the ships, waterside festivities, an airshow featuring the Blue Angels, and the world-premiere of “Overture for 2012,” composed by Philip Glass.

Tags: Refinancing+Mortgage

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Should I worry about lead paint in Crofton area homes?

May 4th, 2012 Categories: Questions and Answers

Crofton Real Estate Q&A

Q. So many homes in the greater Crofton area were built before 1978… Should I worry about lead-based paint?

A. In Crofton, Gambrills, Odenton, Bowie and across Maryland and the United States, there are many homes built before 1978, when lead-based paint was banned in residential property.

Federal and State regulations exist to protect occupants of homes where lead-based paint may have been used before 1978. For example, sellers and landlords across America are required to provide home buyers and tenants with a booklet produced by the Environmental Protection Agency titled Protect Your Family From Lead in Your Home. All parties to a sale or lease of any home built before 1978 must sign the Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards.

Home inspector flipped In Maryland, buyers of homes built before 1978 have 10–day window to obtain an assessment or inspection by someone certified by the Maryland Department of the Environment. Maryland REALTORS use a Lead Based Paint Inspection Addendum and a disclosure regarding the Maryland Lead Poisoning Prevention Program in transactions for these homes.

When a client asks me whether they should be concerned about lead in a Crofton area home built before 1978, it would be foolish for me to do anything other than refer them to these official documents and suggest that they obtain a lead inspection.

Apparently, most home buyers are satisfied with the results of their inspection, since older homes change hands every day, but that alone is not adequate justification for waiving the opportunity to have an inspection.

Better to be safe than sorry!

The publications mentioned in this post are available for download on my website, MargaretWoda.com

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Crofton Home Seller Asks About Staging

March 23rd, 2012 Categories: Questions and Answers

Crofton MD Real Estate Q&A

Q. Why pay a stager? I can de-clutter my own home!

A. Staging is the art of converting a home which reflects the occupant’s personality and lifestyle into a property where prospective buyers can imagine themselves living.

Living Room2 Real estate agents will usually tell you that a home is show-ready when it is uncluttered, clean, in good repair, neutral, and accessorized. But staging takes this description to a whole new level by making it easier (if not easy) for buyers to imagine how they might utilize the space to accommodate their own personality and lifestyle.

Stagers know what today’s buyers are looking for and they know how to highight the features of a home in this context so it will generate a positive emotional response in buyers.

D.C. REALTOR Pat Kennedy gives one example in Skinny mirrors: You look great and the house does too. While I’m not suggesting home sellers should hang skinny mirrors (and Pat isn’t, either), I do believe buyers respond more favorably to a home that makes them feel good.

Young families probably won’t be attracted to a home where they can easily imagine their parents or grandparents living. On the other hand, they may like the floorplan, location, and features of the same home after it has been professionally staged. This may be as simple as replacing home furnishings, colors and accessories of the 80’s with others that are popular today.

94% of staged homes sell in less than 30 days. Wouldn’t you rather pay a stager up-front ($300–$3,000) than drop the price $5,000–$10,000 after 30 days?

Crofton homes sit on the market an average of 128 days before selling (based on statistics from MRIS). If you want to sell your home more quickly than that, contact me for an introduction to professional stagers in this area.

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The purpose of this blog is to provide the latest community and real estate information to relocating home buyers and current residents of the greater Crofton area. Please contact me with real estate questions or news about your local organization or business. I’m happy to share them with other readers of Focus On Crofton.

Tags: Crofton+MD+Real+Estate

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Why Wait to Look at Homes?

February 17th, 2012 Categories: Questions and Answers

Rent Sign Crofton MD Real Estate Q&A

Q. I want to rent a home in September, but agents won’t show me homes now. Why wait?

A. Homes on the market for rent are typically available within the next 60 days, and may be available as early as immediately.

Homes with September occupancy probably won’t start coming on the market before July and August, so the best use of your time now is to educate yourself about rental property locations, features, and prices by reviewing online listings.

Let’s make a date now to get together after July 1. In the meantime, I can send you rental listings that meet your critieria. You never know… one of them might just tempt you to rent a property sooner than September

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Tags: Crofton+Rentals

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It Takes Preparation to be a Home Buyer

February 12th, 2012 Categories: Questions and Answers

Crofton MD Real Estate Q&A

Q: Is there anything I have to do to prepare for buying a Crofton home?

A. The short answer is “no.” The better answer is “yes!”

Lots of home buyers walk into a real estate office or model home with no preparation at all, and eventually they succeed in finding and buying a house. The process is rarely without disappointments, delays and frustrations, however, which might have been avoided with a little preparation.

If you want a more pleasant home-buying experience, here are some suggestions to help you prepare for becoming a home buyer:

1. Know how much home you can afford before you start looking.

Loan Pre-approval: Contact a local lender to be pre-approved for a loan. The lender will require you to provide information for yourself and any additional borrowers before you can be pre-approved:

Full name, contact information, social security number, and birthdate.

The name and contact information for employer, gross income, length of employment, and employment history for the past several years.

The name, address, and account number for all monthly financial obligations including long and short term loans, credit accounts, child support, alimony, and child care.

Your lender may ask for additional information, but this list will get you started.

Budget: Just because a lender says you qualify for a loan, doesn’t mean you want to borrow that much. Sit down with a calculator and evaluate the required monthly expenses you shared with the lender AND your discretionary spending such as hobby-related expenses, private schools for your children, or that annual vacation. Then you’ll have a more realistic picture of how much you can afford for a monthly mortgage payment, and that can be easily translated into how much you can borrow.

Down payment and closing costs: How much cash do you have on hand for up-front expenses such as a home inspection, credit report, and appraisal? How much will you have for down payment and closing? There are other options besides savings or equity from another home. Click on this previous blog post, 8 Ideas for Down Payment and Closing Costs.

2. Know what features you want in a home and community

Make a wish list: If price were no object, what features would you like to have in your home and community? Now let’s add a dose of reality to your wish list by separating your “wants” from your “needs.” For example, you may want 4 bedrooms but need 3.

Do your research: Take advantage of the many online home search options to get a preliminary idea of home prices, features, and neighborhoods. You can begin your home search right here, by clicking on the Search for Homes tab at the top of this page. Homesdatabase.com is is another good resource, since it is the public version of MRIS, the multiple listing service used by real estate agents throughout the Middle Atlantic region, including the greater Crofton area.

3. Choose a real estate agent

How to choose an agent and what to expect at your first appointment are topics for another day.

Let it suffice, for now, to say that it’s never been easier to choose a real estate agent. You can practically interview them online by visiting their websites, reading their blogs, and checking their reviews on 3^rd party websites – not to mention the various social media sites such as YouTube, Facebook, and Twitter.

Well-prepared home buyers are usually happy home-buyers, because there will be fewer delays, disappointments, and frustrations for them during the home-buying process.

As your buyer’s agent, I will be a tireless advocate and adviser for you. Why not give me a call? Click on Contact Margaret to get started.

DISCLAIMER: Information contained in this post is deemed reliable on the date of publication,
but it is not guaranteed and it is subject to change without notice.
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Margaret Woda, REALTOR and Associate Broker
Direct: (301)346-2923 or click on EMAIL