Realtor answers common questions

This week, we are delving into common questions that buyers and sellers alike should understand.

1. Should I choose an Adjustable Rate Mortgage (ARM)?

An ARM is a type of mortgage loan with interest that fluctuates with the market. Kenneth Feinman of Approved Mortgage Group says choosing an adjustable mortgage, “depends on your intentions with the home. How long are you planning to live there? After you move are you planning to rent the home or sell? If you know you will be in the home 5-7 years then a 5/1 or 7/1 ARM can save you a lot of money in interest. If you are buying your forever home I would not recommend an adjustable because rates are at historical lows at the moment.”

2. Is a BOM (Back On the Market) property a good deal since it is newly back on the market?

There are many reason that a home has a status of BOM. It

could be because there was a contract on the house that has now been nullified. It is not always a negative situation though. Have your realtor contact the listing agent for details.

3. Should I jump on the first property I like, or keep looking around?

Days on Market is constantly changing. The main reason a home stays on the market for a long time is either the price is wrong or the condition of the home

is poor. If you are looking at homes and you see one that checks off all your needs and wants, make the offer. Many buyers want to wait until there are lots of choices and sometimes they end up losing the house that works best for them.

4. Do you think interest rates will go up in 2017?

Interest rates have already started to climb and all indicators are that they will continue.

5. What kind of credit score do I need to buy a home? Should I worry if my score doesn’t reflect my current ability to afford a home?

Kenneth Feinman, branch manager at Approved Mortgage Group, says: “The minimum credit score is a 560 for an FHA loan. Credit score is one factor we look at when qualifying someone for a home. If someone has a low credit score but a strong job history and low debt to income ratio they can still buy a home. “

6. Are there mortgage options with lower down payment options?

Feinman also comments on downpayments, saying it “depends on the type of loan a person qualifies for. VA and USDA loans are 100 percent financing and don’t

require down payments. FHA requires a minimum of 3.5 percent down and conventional loans 3 percent. There are down payment assistance programs but they are sometimes restricted by first time homebuyer and income limit requirements. A loan officer would be able to tell you if you qualify for such a program.”

7. Should I get a home inspection before I list my home for sale? If so, how do I know if I should do a basic inspection or go for extras like checking water quality, septic, well, etc.

A home inspection is a great pre-emptive measure

on your part. The inspection will reveal minor issues that you will have time to correct before putting the home on the market. If there is a major problem, you are ahead of it and can get second opinions etc. It’s always better to know exactly what to expect, rather than having the buyer’s inspection find it after you have negotiated the sale price. In terms of the extra inspections, I always suggest that if your home is serviced by septic you should have it preinspected. Your home will stand out from the others if you can provide a buyer with pre-inspections.

Have a real estate question for Maureen? Email her and be featured in our next Q&A! maureenhughes@kw.com

Maureen Hughes is the Lead Listing Specialist of The Wayne Megill Real Estate Team of Keller Williams Brandywine Valley in West Chester. For buyer or seller representation, or for more perspective on the local and national real estate market, please email maureenhughes@kw.com and visit The Wayne Megill Team site at http:// www.waynemegillteam.com.