Negotiating the price for anything you buy can be a tedious and challenging task, especially when you have met your match who is just as good as you are at bargaining. But when it comes to substantial investment, a little bargaining will go a long way if you play your cards right.
Here are a few tips which will just help you gain the upper hand.
Finance, it is the first thing that you should take care of before you even look for a house. Consider key factors like pre approval of mortgage before you even make an offer on the said property. Your offer will be more convincing when you have already have the finances ready to back it up.
Take into account the interest rate which you will be incurring on your loan. Consider the principal amount and calculate how much interest you will be incurring on multiple mortgage options. If the difference between the two is not so substantial, a little extra funds can help you buy the right house for the best price. Don’t lose out on a better property deal just because the interest rate was a couple of dollars higher on the second mortgage option.
Having an agent or property expert who can ascertain the appropriate market value of the house is advisable. You won’t be able to make a low offer on any property which is currently under priced or selling at below the market rate. This is where the expert will come in handy and can suggest you the best course of action, financial and otherwise.
Property will be in demand. Especially properties which are located in prime areas of the city or close to famous landmarks like the Central Park in New York City. Property surrounding this area for example will sell like hot cakes and for a good price. If you have the budget and are sure that you can afford interest rates, taxes and additional expenses, do not hesitate to go for such properties since they will be in demand. Make your first offer the best you can, keeping in mind of course the other factors discussed.
Be prepared and willing to compromise on certain factors. Your first offer will ensure your interest in the property. However, there might be something that you don’t like, for example the decor or layout. These are things that can be easily changed and modified, so it is best advisable to let the little things go and look at the bigger picture.
A reverse mortgage is a type of loan that allows homeowners to receive payments on their house as opposed to them making payments to the lender. At first glance, this option seems too good to be true. But, before committing to it, there are some nitty-gritty details that people must consider when opting for this type of financing. So, here is some information regarding the pros and cons to consider when getting a reverse mortgage.
Advantages
Disadvantages
A reverse mortgage is a loan that allows individuals older than 62 to improve their financial well-being. They can convert part of their home equity into lump sum cash, fixed monthly payments, or line of credit, according to their preference. The money can be used to pay for medical bills, in emergencies, or to pay off a mortgage. Here’s what you should know about reverse mortgages in case you’re looking for one.
How much can you borrow?
For reverse mortgages, the loan amount can’t exceed the value of the property against which it is borrowed. Federal regulations require lenders to ensure that the loan amount doesn’t exceed the value of the house by structuring the transactions accordingly. Additionally, these regulations state that the owner/borrower is not liable to pay off the balance amount in case it exceeds the property value.
How are reverse mortgages paid for?
A reverse mortgage is payable when the borrower sells the house, relocates permanently, or dies. Unlike forward mortgages, reverse mortgages don’t need the borrower to make any monthly payments. They are only liable to pay interest on the money received, which is rolled back into the loan balance. While the owner gets to keep the title to the home, their home equity reduces over the loan tenure.
Who can take a reverse mortgage?
This type of loan is ideal for seniors and retirees whose net worth comes mostly from the value of their home. Seniors who don’t qualify for a home equity loan or can’t refinance due to limited cash flow or poor credit can opt for reverse mortgages. Home Equity Conversion Mortgage (HECM) for purchase is a reverse mortgage that allows seniors to buy another property. That said, it is complex, and you should study the risk factors before getting one.
What are the risks associated with reverse mortgages?
Reverse mortgage scams are not unheard of. Unreputable vendors could offer to help seniors secure reverse mortgages by undertaking house repairs. They don’t provide quality results and get away with the homeowner’s money instead. For spouses living together in a home with only one spouse named as a borrower on a reverse mortgage, the other spouse can lose the home if the borrowing spouse dies first. Besides, reverse mortgage lenders charge fees and closing costs and may also charge mortgage insurance premiums for federally-insured HECMs.