Jeannette Myles' Blog
Many people own homes through a mortgage agreement. Traditional mortgages are primarily fully amortized or gradually paid off with regular payments over the lifetime of the loan. Each payment contributes to both the principal and the interest.
A balloon mortgage is a short-term home loan with fixed-rate monthly payments that only take care of accrued interest on the loan for a set period. It also has a large “balloon” payment to cover the rest of the principal.
The payment plan is based mainly on a fifteen- or thirty-year mortgage, with small monthly payments until the due date for the balloon payment. These low regular payments partly cover the loan but require paying the remainder of the unpaid principal as a lump sum. Selling the house or refinancing the balloon loan before the payment is due is how most buyers approach this situation.
Key Issues with Balloon Mortgages
Lenders present a deadline by which the balloon payment is due (three- to seven-year period). The enormous amount is often more than borrowers can easily handle at once.
Paying only interest on a loan does not allow equity to build. Many homeowners use equity as a means to complete home improvements or other projects. Building equity also helps homeowners when it comes time to sell their home because a traditional mortgage reduces over time.
Why People Opt for Balloon Loans
It is possible to refinance a balloon mortgage or sell the property before the balloon payment is due but it can be difficult to do so. A dry housing market, job loss, or low credit score are potential obstacles. Lay-offs and depressed home values can trap buyers in their balloon loans. Without the option to sell, refinance, or fulfill their balloon payments, borrowers may end up in foreclosure.
The One True Strategy
Traditional loans are generally safer than balloon mortgages. To keep housing costs at a minimum, use a balloon mortgage if you are sure you can exit before the balloon payment comes due. Otherwise, it is best to remain in the realm of traditional loans.
Review the pros and cons of taking a balloon loan before committing to it. Speak to your financial planner or realtor for professional guidance.
The term “bi-weekly” means every other week. If you get paid bi-weekly, you usually get your check every other Friday. When it comes to a mortgage, typical amortization plans (payments of principal and interest) use a 30-year/360-month calculation. But many lenders offer a bi-weekly plan too.
In this case, you would make 26 payments a year. When your paycheck is also bi-weekly, this option works fantastically. When you do this, you effectively make 13 monthly payments in a year. While some lenders won’t accept two half payments mailed to them each month, they will set up automatic deductions bi-weekly for you.
Can you do it faster?
A bi-weekly plan will pay down your loan more quickly than twelve monthly payments, but can you do more to get your house paid off?
Here are some options to add to your plan and get your mortgage paid off sooner:
- Round up: If your bi-weekly payment is $762 a month, round it up to $800. That extra $38 against your principle lowers the overall interest you’ll pay. If you can round it up higher, do so.
- Use your bonus: Annual bonuses from work often go toward holiday gifts and other expenses, but if you really want to pay your house down, add it to your last payment of the year.
- Use your tax refund: If you get a refund from the government every year for overpaying your taxes, apply it to your house. A few hundred or thousand dollars extra every year makes an enormous difference in the interest you pay and how soon that property belongs to you in full.
Online calculators can help you determine what adding just a small amount to your payment can do to reduce the time it takes to fully amortize your mortgage. Plugin different numbers to see what works for you.
If you haven’t yet purchased your house, your real estate agent can get you started, so give them a call today. Then set your budget, buy your house, and put your plan into action.
A first-time homebuyer often proceeds cautiously as he or she navigates the real estate market. However, if this homebuyer discovers the "perfect" home, the risk to overspend to acquire this residence may prove to be too much to resist.
It is important for a first-time homebuyer to understand what it takes to purchase a house at a price that matches or exceeds his or her expectations. That way, a homebuyer can avoid the temptation to overspend on a house and reduce the likelihood of breaking his or her homebuying budget.
Now, let's take a look at three tips that a first-time homebuyer can use to minimize the risk of overspending on a house.
1. Assess the Housing Market Closely
The housing market frequently fluctuates, and a first-time homebuyer who identifies real estate patterns and trends may be better equipped than others to pay the right price for a residence.
Having the ability to differentiate between a buyer's market and a seller's market is key. If a homebuyer understands the differences between these markets, he or she should have no trouble submitting a reasonable offer on a house based on the current housing market's conditions.
In a buyer's market, there is an abundance of available houses and a shortage of property buyers. This market favors homebuyers, and as a result, a property buyer may be better equipped than ever before to acquire a great house at an affordable price at this time.
Conversely, a seller's market favors home sellers and includes a shortage of high-quality houses and an abundance of homebuyers. In a seller's market, a homebuyer may need to submit a competitive offer on a house, or he or she likely risks losing a residence to potential rivals.
2. Get Pre-Approved for a Mortgage
Want to stick to a homebuying budget? With a mortgage in hand, a first-time homebuyer will know exactly what he or she can spend on a house and narrow a home search accordingly.
To get pre-approved for a mortgage, a homebuyer should meet with several banks and credit unions. This will allow a homebuyer to learn about all of the mortgage options that are available and choose a mortgage that corresponds to his or her finances.
Also, be sure to ask potential lenders plenty of questions about various mortgage options. By doing so, a homebuyer can boost his or her chances of making an informed mortgage decision.
3. Collaborate with a Real Estate Agent
A real estate agent can help a first-time homebuyer explore houses that fall within a specific price range, thereby reducing the risk that a property buyer will overspend on a house.
In addition, a real estate agent is happy to provide honest, unbiased homebuying recommendations. This housing market professional understands the ins and outs of purchasing a house, and as such, will do everything possible to guarantee a property buyer can acquire a terrific residence at a budget-friendly price.
Avoid the temptation to pay too much to buy your dream house – use these tips, and a first-time homebuyer can seamlessly navigate the property buying journey.
Buying a house may prove to be a long, complex journey, especially for a first-time homebuyer who decides to pursue a residence on his or her own. Fortunately, many real estate agents are available to help first-time homebuyers make their homeownership dreams come true.
Now, let's take a look at three tips that first-time homebuyers can use to find the right real estate agent in any housing market, at any time.
1. Go Beyond a Web Search
In many instances, it is easy to conduct a web search of real estate agents in a city or town. However, a diligent first-time homebuyer will know to look beyond a simple web search to discover the ideal real estate agent.
Take a look at a real estate agent's website. By doing so, a homebuyer can learn about a real estate agent's industry accomplishments and experience.
Also, don't hesitate to contact a real estate agent's office directly. This enables a homebuyer to have a brief conversation with a real estate agent and find out exactly what this housing market professional is all about.
2. Host a Face-to-Face Meeting
A face-to-face meeting may prove to be exceedingly valuable for both a first-time homebuyer and a real estate agent, and for good reason.
During a face-to-face meeting, a homebuyer can ask questions and learn about a real estate agent's industry expertise. Plus, a homebuyer can receive comprehensive insights into what it will take to acquire a top-notch residence at a budget-friendly price.
Meanwhile, a face-to-face meeting helps a real estate agent learn about a homebuyer's goals. A homebuyer can provide information about what he or she wants in a dream home, and a real estate agent can offer details about what a homebuyer should expect at each stage of the property buying journey.
3. Receive Client Referrals
Although a first-time homebuyer may feel comfortable with hiring a real estate agent after a face-to-face meeting, it is always better to err on the side of caution. Thus, a homebuyer who requests client referrals from a real estate agent ensures that he or she can make the best possible decision.
A real estate agent should have no trouble providing you with multiple client referrals. Then, you can reach out to this housing professional's past clients to find out how he or she has helped homebuyers achieve their desired results.
Spend some time reaching out to a real estate agent's past clients – you'll be happy you did. With additional client insights at your disposal, you can improve your chances of choosing the perfect real estate agent.
Lastly, it is important to remember that a real estate agent should be available to guide you along the homebuying journey. This housing market professional boasts in-depth industry experience, and as such, can share deep insights to help you make informed decisions as you go from homebuyer to homeowner.
Take advantage of the aforementioned tips, and a first-time homebuyer can employ a first-rate real estate agent and gain unparalleled support throughout the homebuying cycle.
Vacuum cleaners have been considered an excellent means for most people to clean up their house swiftly. With the increasing need for vacuum cleaners, designers have made incredible changes in the plans of the vacuum’s built-in technology. Till now, there are primarily two kinds, corded and cordless designs. More people tend to substitute the cordless type in the home not only because of a reduced cost but because of the benefits of the cleaner in itself.
Very convenient and lightweight
With no dull imperceptible rod, the cordless vacuum cleaner is much more lightweight with little dimensions, simpler for you to take about and maintain. Using cordless, cable length need not confine you, and is more suitable for portable cleaning anywhere as well as lifting and cleaning up effortlessly.
A corded vacuum could reach various places but may find it hard to wash out the walls or get to higher furniture. The cordless version, however, includes two extension tubes, allowing you to reach anywhere and suck small dust and allergens on stairs, upholstery, and crevices economically and efficiently. It's simple to lift to eliminate dirt or dust on the walls or the top of furniture.
Corded vacuums cannot operate without electricity. On the other hand, battery-powered vacuum cleaner will continue working without being fixed in a socket. Operating a cordless vacuum cleaner saves you energy and also offers mighty suction power with each use.
Not specifically for indoor use
A handheld vacuum cleaner may be used to clean the inside of automobiles thoroughly. However, a corded vacuum cleaner has restricted distance it can cover and is not simple to carry. Cordless vacuum is more portable than the usual corded with a detachable handheld, so you can pack this up and build it whenever you want. The vacuum cleaner can also be utilized in the car whenever you want.
The absence of cable clutter
The corded vacuum has a long cable that causes cleaning hassles and difficult to pack up. Cordless vac is more wall-mountable, simpler to store away and zero cable mess.
The cordless vacuum cleaner is battery powered, such that you can use it in a situation of is a power failure. With advanced technologies, the cordless handheld vacuum cleaner could sweep the entire house before a re-charging is needed. Most cordless vacuums use lithium-ion batteries which have an extended life, and that means you need not worry about it quitting halfway.
Whatever you desire, clean home or a more comfortable living surrounding, a cordless vacuum cleaner will be a smart option. Cordless vacuums have the edge over the corded vacuum cleaner. If you would like to try out a handheld vacuum cleaner, cordless vacuums will guarantee you a quick and thorough cleaning of the entire home.