When evaluating loans, you typically see information on interest rate and APR. These are often misinterpreted as being the same, but they are actually calculated differently. It is essential for borrowers to analyze both. The following is information on the difference between interest rate and APR for Nashville mortgages.
Interest rates apply to monthly mortgage payments for the duration of a loan. This is almost always the rate given by companies. It does not reflect the initial cost of a loan. Fees will vary between programs and lenders. For example, there may be pre-paid interest for one mortgage but not another. Other charges that may be included are loan origination and services charges. The APR takes into account the interest rate and particular fees, so it is a better indication of overall cost.
When weighing various financing options from one or more lenders, the APR is a figure that can be used. You can be offered one loan with high fees and another with low fees and a different interest rate corresponding to each. The real expense includes both what you pay up-front plus what you pay in interest over the term of the mortgage. The APR may therefore help you better evaluate options.
|Loan Amount||Term||Interest Rate||Up-front Cost||APR|
|100,000||30 years||5 percent||1,000||5.09 percent|
|100,000||30 years||4.5 percent||4,000||4.85 percent|
There are a few facts that home buyers must know about APR figures. APR is formulated over the length of a loan. If you pay off your loan in a fewer number of years, the actual APR may be much different. Furthermore, one mortgage that appears to offer a better APR than another could end up being higher after applying the shorter time period. The lowest APR is not necessarily the best option. Since most home owners do not keep their loan for its entire term, this is an important fact to note.
|Loan Amount||Term||Interest Rate||Up-front Cost||APR|
|100,000||5 years||5 percent||1,000||5.41 percent|
|100,000||5 years||4.5 percent||4,000||6.12 percent|
Additionally, certain APR estimates are not definite. For example, the interest on a variable rate loan is likely to fluctuate but that change cannot be predicted. The APR on these mortgages are based on the starting rate.
To complete an accurate comparison of loan APRs, it is important to ask for quotes close together in time (on same day if possible) as interest rates fluctuate daily. Also remember that rates are subject to change unless you lock in. Always review the interest rate and APR jointly to better understand the program and related costs. A knowledgeable mortgage professional can furnish further guidance on the difference between interest rate and APR for Nashville mortgages. Let us know if you need recommendations for excellent local lenders we know by emailing us at TheNashvilleDuo@gmail.com
Everyone has the ability to correct incorrect items on their credit report. However, home buyers must be aware of the impact that it can have on obtaining home financing. This blog includes important details on disputed credit accounts and the impact on Nashville mortgages.
If you are thinking of buying real estate in the future, be proactive about reviewing your credit report several months in advance. This allows you the time to identify and address errors long before you apply for a mortgage. Ideally, you would want the disputes cleared before beginning the home buying process. If you do have any pending items, notify your loan officer as soon as possible. Do not assume that it was noticed on your report during the pre-approval process.
If you uncover a mistake on your credit report, you have the ability to dispute it by sending a request to the three credit bureaus. A notation is added to your credit report and the accounts are considered disputed credit accounts. Credit bureaus may choose to disregard the specific items when compiling your credit score, so they might not impact your score while in process. Ordinarily, the notation is removed when the mistake is resolved and, if applicable, the needed corrections are completed. This process can take a few months. Even though you may not notice a reduction of your score, the details of the dispute can cause other issues.
Many lenders utilize electronic underwriting systems. Your credit score and other aspects of your credit report are evaluated by this system. Disputed credit accounts may cause a mortgage loan to be denied or diverted to manual underwriting. Gather all paperwork and information related to the disputed credit accounts. If it was an item that you settled but was not properly reflected in the credit reports, have statements showing the amount owed and verification of amounts paid. Also write a letter detailing the situation. All of this can improve the likelihood of having the mortgage approved. Keep in mind that some mortgage companies may not approve an application if there is a dispute on file, regardless of the specific reasons. This is in place in an attempt to detect fraud but, unfortunately, will sometimes hurt buyers with reasonable claims. To be safe, it is best to clear credit disputes before applying for a mortgage. It is important to speak with a financial consultant for personalized guidance on your mortgage needs. To be referred to a local professional, email us at TheNashvilleDuo@gmail.com
The Fair Credit Reporting Law gives you the opportunity to request a credit report from each of the 3 credit bureaus annually at no cost. The FTC started this rule to empower consumers. The advice on requesting your free credit reports every 12 months below will help you take advantage of your rights.
Each credit report includes personal information on you and your credit related activity. This includes past addresses, credit cards and mortgages, and financial judgments such as a law suit or bankruptcy. These facts are checked by lenders, employers, insurance companies, and others to evaluate your credit worthiness. It is thus very important to ensure that the information is up to date.
There are 3 separate credit bureaus: Equifax, Experian, and Transunion. Each may have somewhat varying sets of data on you. They also measure scores using separate methods. There is a centralized website at annualcreditreport.com where you can receive your credit reports. You can also contact them at 1-877-322-8228 or print and mail the request form found on the website. You will be required to provide your name, date of birth, social security number, and one or more addresses to verify your identity.
Many other websites use data from certain credit agencies and monitor changes. They apprise you of certain changes to your credit file (such as the credit score being requested or new debts being issued). This will allow you to monitor your score during the year and making you aware of any acts of fraud.
CreditKarma.com is one website that offers free service and will not actually ask you for a credit card. Many alternate sites are broadcast as free but eventually start charging after an initial trial period, so find out about the terms before signing up. Also be careful of fraudulent sites that reside at common mis-typing of web addresses. These sites are established to grab your private information.
The above advice on requesting your free credit reports every 12 months will hopefully get you started. Request a copy of your report and look through it closely. Contact the credit bureaus to fix mistakes. For more complex issues, consider calling a credit consultant for further guidance. This blog is published strictly as an introduction and should not be taken as financial advice.
There are many ways to prepare for the home loan process. A particularly crucial one is to understand your credit reports ahead of time as those scores impacts your loan options and rate. The following are ways to increase credit scores before purchasing a home in Nashville.
Your credit rating determines if you qualify for certain financing programs, so view your credit rating ahead of time. There are three different credit agencies (Equifax, Experian, and Transunion). Your figure may vary with each one. If there are any flaws, it is vital to initiate the steps of having them corrected right away as this may take several months to resolve.
If your credit score is low, work on elevating it. There are several ways that you may try. If you do not often utilize credit cards, then they are not providing anything to the credit agencies and are therefore not helping the score. Make regular charges on each card and pay the bills in full. This will help elevate your credit profile. If your balance carried each month are high relative to the allowable limits, start decreasing the balance on each one. Note that it is more beneficial to have small balances across several cards compared to having one approaching its limit.
Avoid applying for new debt or eliminating credit cards. Do not make large purchases on your cards. These all will decrease your credit score. When banks see that you are applying for new credit, they may conclude that you are experiencing financial instability. This is also applicable when you are relying on your credit cards and carry high balances.
By assessing your credit report, you may have the an opportunity to identify discrepancies. Apply the minimal practices detailed in the above Ways To Increase Credit Scores Before Purchasing A Home In Nashville. Keep in mind that the above are strictly basic suggestions. For targeted credit assistance, hire a credit professional or speak with your lender for guidance.
Credit reports are generated by 3 credit agencies (Experian, Equifax, and Transunion). Each uses a different formula. The greater the number, the better your credit rating. Specific items can have a negative impact on your score and can potentially prevent banks from granting you a home loan. The following are recommendations for future Nashville home buyers on credit mistakes that reduce your rating.
Missing payments demonstrate poor credit habits and will thus lower your ranking. The extent to which you are late (30, 60, or 90+ days) and how many times you are late also have an impact. Late payments remain on your credit profile for many years.
If you fail to pay a loan and a credit provider has exhausted their own attempts to retrieve money from you, they may transfer your account to a collection company. This is reported to the credit bureaus. A payoff does not clear this from your report.
If a credit provider is unable to collect the total balance of the debt, they may "charge-off" the uncollected amount. This may occur if you completely fail to send payments or if you settle for a payoff below the total amount. Charge-offs appear on your credit report for 7 years. New creditors will view this item and wonder how likely you are to repeat that behavior.
Bankruptcy, liens, judgments, foreclosures, and other similar events are part public record. Regardless of whether you settle those items, the initial recording stays on your credit score. Certain things remain for seven to ten years and others (such as liens) stay forever. Clearly, it is critical not to let matters get this far.
All of the credit mistakes that reduce your rating detailed above make you a risky client and may result in higher mortgage rates or completely stop you from getting loans. Practice conscientious payment patterns and it will save you time, money, and headache when it is time to purchase real estate. These are the best recommendations for future Nashville home buyers. this represents only a few typical credit mistakes. Speak with a credit advisor for guidance on your specific credit profile.
©2017 The Nashville Duo of Benchmark Realty
A home inspection is an examination of the structure and all mechanical and electrical systems by a trained professional. It typically encompasses an examination of each visible aspect of the interior and exterior of a house. A certified home inspector has evaluated hundreds of properties and is therefore informed on all the factors of home building, heating and other major systems, and how they all should function. Even a handy home buyer may not have the in depth knowledge of an experienced inspector. Nashville property inspection overview for buyers and sellers can be found below.
Real Estate buying is a large investment that you should not go into without due diligence. An inspection evaluates the condition of a property and necessary repairs. You may find that some defects are minimal and can be inexpensively fixed, while others may tell you not to purchase a particular listing. Alternatively, an inspection can actually confirm that a property is in great condition. Either way, having this valuable knowledge will allow you to make better real estate purchase decisions. A real estate buyer agent will help you with the negotiation process.
Home owners can complete home inspections prior to marketing a home for sale to identify necessary repairs. A rehabilitated property will have a higher market value than an un-renovated one. If you do not correct the items identified, keep in mind that you are required to disclose any known defects to prospective home buyers. This is not actually a terrible situation since buyers would at some point uncover them after their inspection and may negotiate concessions. By disclosing the details ahead of time, buyers can keep it in mind when entering a bid, saving you the trouble of dealing with it later in the sale process.
The fee for an inspection usually relates to the features of a property. Extra charges may apply for evaluation of things such as wells. Prices will also be different based on the knowledge of the inspector. Understand the background of an inspector based on training, experience, and professional certifications. Even with the expense, an inspection is critical taking into account the large financial commitment of buying a home. For more advice on Nashville property inspection overview and overview for home buyers and home sellers, contact us at TheNashvilleDuo@gmail.com.
©2017 The Nashville Duo of Benchmark Realty
There is low home inventory in many regions. Demand currently exceeds supply. This establishes an interesting environment for both buyers and sellers. Below is information on what the Nashville real estate market shortage means for buyers and sellers.
Less inventory establishes higher competition for home buyers. New listings will typically generate lots of attention. Right now, inventory for homes priced under $300,000 remains very low. Listings will generally generate multiple offers and sell quickly. Under these circumstances, it is typical for properties to sell for greater than list price. What else does this mean for home buyers?
Buyers must be prepared to act. This requires obtaining a pre-approval completed and a letter in-hand to include with a property bid. After seeing a home, buyers must not hesitate on making a decision. Delaying even a day might be too late. Finally, when presenting an offer, it is essential to prepare a simple one and put your best foot forward. You may have only that one chance. There is typically no chance to negotiate a discounted sale price unless the home has been listed for an extended period of time and without competing bids.
Sellers benefit in this environment. It can be difficult maintaining a property in showing condition, so fast sales make selling a home much easier. In multiple bid scenarios, they are also in a position of strength and may be more scrutinizing of buyers.
Sellers need to avoid overpricing in this market. Highest value is often procured by accurately pricing to begin with. Overpricing does not usually end well. If a home sits too long in this market, buyers will wonder what is wrong with it, or may see it as a chance to get a "deal" resulting in lower offers to the seller. Pricing it in the sweet spot is important, and an experienced agent can help with this.
Sellers attempting to simultaneously sell and buy will struggle a bit. Although you will be able to quickly get the current home under contract, locating a new property could take much more time given the limited inventory. Securing a buyer with a fluid time frame will make a big difference. You might also need to use temporary housing until you can locate your new property.
In general, what the Nashville real estate market shortage means for buyers and sellers is a quick selling process and an extended buying time frame. Prices will rise quickly due to demand. It is important to understand the Nashville market if looking to buy or sell. Set reasonable expectations when it comes to both price and timing. Working with an experienced agent will offer helpful support and direction.
©2017 The Nashville Duo of Benchmark Realty
When homes are listed for sale, it is customary to take pictures. Listing agents may also create virtual tours or slideshows. Each is completed differently and offers a different visual presentation of a listing. This blog provides an overview of real estate virtual tours vs. slideshows.
Virtual tours are created using videography and can present a more accurate perspective on the layout and space of a home. It can highlight areas that are difficult to capture in static photos. It is essential to think about the route taken through a home when recording the video. Lighting, video movement, music addition, and other factors are also critical as they can affect the impression that viewers are left with.
Slideshows are the the animation of still photography. Individual still photos are shown in rotation with transitions in between. Photos may zoom in and out or slide by one another at a set rate and sequence. They can be placed in an order that gives viewers the sense that they are walking through a listing using a particular path.
There are pros and cons to both slideshows and virtual tours. Virtual tours can display full panoramic views, but music and other elements may unfairly influence viewer opinions. They are also usually more expensive to complete and can take more time to download and play depending on the length of the video and connection speeds. Slideshows, on the other hand, typically display much more quickly. They also enable people to forward or go back to certain views without taking much time. The disadvantage is that the perspectives of images may be limited or fail to offer an accurate picture of a property. When compiled properly, both virtual tours and slideshows may appeal to prospective home buyers. Angela Neely & Julie Gurel use both virtual tours and slideshows in their marketing plan. Full motion video tends to do wonders for getting people through the door, and social media has made it easier then ever to share with a large audience. For additional information on real estate virtual tours vs. slideshows and other seller services, contact us at TheNashvilleDuo@gmail.com
©2017 The Nashville Duo of Benchmark Realty
A 1031 exchange is a way to defer taxes when selling a property and purchasing another. Real estate used for business or investment may qualify. When used properly, it can lead to dramatic savings. This article provides the benefits of 1031 tax deferred exchanges in Nashville.
You must have qualified real estate in order to consider a 1031 tax deferred exchange. Qualified real estate are those involved with a business or for investment purposes. It can include rental, land, residential, commercial, and industrial real estate. You must also intend to purchase a new similar property that also meets the qualification criteria.
Typically, when you sell an investment property, you pay capital gains taxes on the profits from the sale. This is true despite what you plan to do with that money earned. Taxes may be owed to the federal government and local state. Based on how long you kept a piece of real estate and how much equity you have in it, the taxes owed may amount to a large sum. A 1031 exchange gives you a means to put the earnings from one property directly into the purchase of another like-kind property and defer capital gains taxes until you sell that additional property. Of course, another 1031 exchange may be performed on that future property to delay taxes even further.
There are different elements to a 1031 exchange that you should be aware of BEFORE marketing a property. 1031 Exchanges are not something that you can initiate after a sale is complete. You must plan to perform an exchange when you list qualified real estate for sale. Particular guidelines must be followed to conform to the exchange. This includes time frames for selecting and purchasing replacement property. A qualified intermediary must also be hired to manage the process. If a process is skipped, all potential savings will be void. Consult with a knowledgeable financial advisor for help with 1031 exchanges and to reap the benefits of 1031 tax deferred exchanges in Nashville.
Written by The Nashville Duo of Benchmark Realty