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Is an Assumable Mortgage a Good Idea?

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Looking for an alternative to a traditional mortgage?

Is an Assumable Mortgage a Good Idea?

An assumable mortgage is a loan that allows a buyer to take over a seller’s current loan, typically with no change to the terms or interest rate.

When interest rates are low or falling, borrowers aren’t interested in taking on a loan with a higher interest rate than what a broker could offer.

But, if you’re purchasing a home with an established loan at 3.75% and mortgage rates have risen to 5.5%, you may want to consider an assumable loan.

Why consider an assumable mortgage

The top benefit to assuming a loan is a lower interest rate than you could get by applying on your own. In addition, your closing costs will be reduced. You’ll still have to pay some fees for the loan qualification process.

If you’re assuming an FHA loan, you won’t need to pay upfront mortgage insurance costs—just the ongoing mortgage insurance payments for the life of the loan.

One other advantage of an assumable loan is that you’ll be paying only the remainder of the seller’s loan.

Some simple math gives you a good example: if a seller borrowed $200,000 for their home purchase in 2011 at 4.2% with a 30-year loan, their monthly principal and interest payments are $978. If you were to borrow $200,000 at 5.2% with a 30-year loan, your monthly principal and interest payments would be $1,098.

In addition, because the seller has already repaid the initial three years of the loan, you would only need to make payments for the remaining 27 years of their loan. The sellers will have paid down $24,562 in interest after three years of payments.

By assuming the loan, you’d save $43,268 over the 30-year loan thanks to the difference in interest rates—plus the interest that the owners have already paid ($24,562)—for a total savings of $67,830.

Assumable mortgage options

Conventional loans are rarely eligible for assumption—most typically require the loan to be paid in full when the property is sold or transferred to another owner. VA and FHA loansare eligible for assumption, but there are a couple of additional requirements:

  • FHA and VA loans both require the borrower to be approved for the loan.
  • VA loans allow a non-veteran to take over the loan, but the sellers are still responsible for the loan if the new borrower defaults. If a veteran assumes the loan, the sellers are not responsible for the loan after settlement occurs.

Obstacles to an assumable mortgage

Before you run out to capitalize on someone else’s favorable loan, realize that a loan assumption isn’t always on the table.

In addition, you’ll typically need significant cash or to take out a second mortgage if the current home price is more than the remaining mortgage.

For example, if the sellers have made three years of payments as in the example above, their remaining principle due is $189,353. If the home appreciated in value and you buy it for $250,000, you’ll need extra cash as your down payment in order to assume the loan.

Alternatively, you can make a smaller down payment and finance some of the additional cost with a second loan, but be aware that second mortgages are more difficult to qualify for and typically have a higher interest rate than a first mortgage.

A good lender will help you decide whether a loan assumption or a traditional finance makes the most sense for your home purchase.

This post was originally published by  on realtor.com. See it here.

The Pros and Cons of Vinyl Flooring

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Vinyl flooring comes in either tile or sheet form. One of the least expensive forms of flooring, vinyl is very popular among homeowners, because it offers great value.

travellinglight/iStock/Thinkstock
travellinglight/iStock/Thinkstock

Available in a wide range of colors, designs and styles, vinyl tiles are easy to cut and install by the average do-it-yourselfer, especially when the tiles feature self-adhesive backing.

Sheet vinyl, on the other hand, can be very difficult for homeowners to install, and therefore, it should be installed by a seasoned professional for the best results.

Of course, before choosing vinyl for your floor’s surface, you should carefully weigh the product’s pros and cons to ensure you’re getting exactly the type of floor you’re expecting.

Pros of Vinyl Flooring

  • Vinyl flooring provides a slightly softer surface than options like tile or wood, because the product is backed with a thin layer of either felt or foam—depending on the manufacturer. The soft layer results in the floor having a little more flexibility and give, which makes it easier to stand on for long periods of time.
  • Vinyl tiles are available in a huge assortment of colors and styles, with some designs even mimicking the look of stone tiles or wood planks. While you can notice the difference up close, it can be hard to tell from afar the floor is vinyl.
  • Vinyl also wears incredibly well. It is extremely durable, with many manufacturers backing their products with warranties of 15 years or more. In truth, a well-installed and properly maintained vinyl floor can last for well over 20 years.
  • Vinyl flooring is very resistant to dirt and water, and it’s one of the few flooring types that can be installed directly over the subfloor—or over a previous vinyl or linoleum installation—without requiring demolition first. It is also one of the best choices for installing on a floor with a lot of cracks or excessive movement.
  • As far as cleaning and maintenance goes, vinyl is hard to beat. Requiring practically no maintenance after installation, vinyl needs to just be swept and mopped occasionally to keep the floor clean.

Cons of Vinyl Flooring

  • One of the biggest problems facing vinyl is the product is manufactured using polyvinyl chloride (PVC) and will emit volatile organic compounds (VOC), especially when it is new. It is important to note, however, that since 2010, many manufacturers have started using less PVC in their vinyl flooring products.
  • While vinyl tiles are very easy to install on one’s own, getting the subfloor ready for installation can prove to be a difficult job. In order for the tiles to look their best, the subfloor needs to be free of all particles—or they may show through the tiles in bumps and lumps. In addition, installing peel-and-stick tiles on a dirty floor will result in loose tiles quicker than you might expect.
  • The spongy quality of vinyl flooring may prevent a glass from breaking if it’s dropped on the floor, but a sharp object can gouge the surface if dropped. This is also a concern when it comes to moving furniture. Furniture pads needs to be installed on the feet of all furniture—or moving the couch could result in scratching or gouging the tile or popping the tile off the floor entirely.
  • Vinyl flooring does nothing to a home’s resale value, and it can prove very difficult to remove once it is installed.

Is Vinyl Flooring Right for You?

Like all other types of flooring materials, there will always be a market for vinyl flooring.

For many, the low cost and durability far outweigh the VOC emissions.

For others, the fact that they can enjoy a floor that resembles wood or stone tile—but isn’t as hard on the feet—is enough to warrant the product’s use.

Ultimately, the homeowner’s choice will be based on their budget, the type of room the flooring is being installed in and their expectations.

This post was originally published on realtor.com. See it here. Updated from an earlier version on realtor.com®.

Extreme Opulence: $139M For Most Expensive Home in U.S.

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Is there a ceiling on extravagance? And more importantly, is it vaulted?

from realtor.com
from realtor.com

To answer that burning question, we point you in the direction of Hillsboro Beach, FL.

from realtor.com
from realtor.com

There you’ll find the newest entrant in the over-the-top luxury contest known as “America’s Most Expensive Home”: listed for a cool $139 million, this French-inspired palace seeks a buyer with pockets deeper than the Mariana Trench.

from realtor.com
from realtor.com
from realtor.com
from realtor.com

Here are some facts to keep in mind before you attempt to get pre-approved for the most jumbo of all mortgages:

Name: Le Palais Royal
Style: Beaux Arts
Bedrooms: 11
Bathrooms: 17
Square Footage: 41,774
Acreage: 1.39 acres
Size of Pool: 4,500 square feet
Home Theater: IMAX (of course)

from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com

The Wall Street Journal reports the home has been under construction since 2009 and still isn’t complete. The Journal also offered this interesting tidbit: “The entire home was built to be soundproof. The home’s South African marble floors were insulated specifically so the clacking of high heels will be muted.”

from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com

So who’s going to buy the place where high heels can’t be heard?

CNBC spoke with listing agent William P.D. Pierce for the details on the most expensive home in the U.S. right now.

“We do have some serious inquiries on the property,” he told CNBC. “The buyers, I think, are from all over the world. Inquiries have been pouring in from Brazil, from Russia, from China, India. Can’t forget America. I’m actually surprised [by] the amount of Americans that have been inquiring on this property.”

from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com
from realtor.com

As for that enormous loan you’ll need to finance a palace of your own, Credit.com crunched the numbers on what a buyer might expect to pay every month.

Here’s what the site’s staff found: “Even with the low 30-year mortgage rate of 4.12% … you’re looking at a monthly payment of $550,559 for Le Palais Royal. Annual taxes are $143,425, and if you plan on putting down less than a 20% down payment ($27.8 million), the loan will be even pricier.”

So, for those who can afford to drop a half-million each month in mortgage payments, this might be the place for you.

from realtor.com
from realtor.com
from realtor.com
from realtor.com

If you’re interested in learning more about Le Palais Royal, we found couple of news reports about the nation’s most expensive home worth watching:

This article was originally published by  on realtor.com. See the original article and more photos here.

5 Creative Storage Hacks for Small Spaces

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5 Creative Storage Hacks for Small Spaces
belchonock/iStock/Thinkstock

In a perfect world, every house would have a basement and an attic, walk-in closets and deep kitchen cabinets that stretch on forever—but the world is an imperfect place. Some otherwise-great dwellings have narrow closets, a couple of small cabinets and no attic or basement. If you’re handy—or at least, comfortable with a hammer and nails—that may not matter. There are plenty of ways to make more storage space, even in the tiniest of houses.

Make Use of Narrow Walls for Storage

Walls that are out of the way or too small to hang pictures and knickknacks—like the narrow wall beside your bathroom sink—often go unused. Instead, hang a few simple floating shelves within arm’s reach. Reduce clutter by using the shelves to store items you’d normally keep on the countertop.

Take Advantage of Vertical Storage Space

When you’re trying to store infrequently-used items, think above eye level. Stack wicker baskets along the top of your kitchen cabinets to store small appliances you don’t use often. Install a pot rack from the ceiling to store the pots and pans you don’t use every day. Suspend a clothing rack from the ceiling to store out-of-season items and free up closet space.

Squeeze in More Shelves

With a few supplies and some creative thinking, you can easily double the shelving space in your bathroom and kitchen. Place tiered shelving units along your widest shelves to break the large space into smaller, more usable chunks. Attach narrow baskets to the inside of cabinet doors for more storage space.

Turn Doors Into Storage

Replace pantry or laundry room doors with reclaimed wooden shutters, available at hardware resale stores and charity shops. Not only will the wooden shutters look great, you can use the other side to hang items—like kitchen utensils or knickknacks—out of sight. If you don’t want to swap out your doors, you can also install pre-built shelving units. Many are designed to fit along the inside of doors and will give you plenty of added storage space.

Reclaim the Space Under Your Cabinets

Utilizing the space under your cabinets could free up some room inside of them. By hanging a rack underneath, you could store wineglasses and coffee mugs under the cabinet using less space than you would have needed on the shelves. You can also use the space to install a magnet to hold up metal jars or spice containers.

This article was originally published by  on realtor.com. See the original article here.

Creating a Home Office Space for All Ages

Posted on Updated on

The line between working in and living in our homes has become less distinct — for all family members.

A light and bright work space by Thea Home Inc.
A light and bright work space by Thea Home Inc.

More and more people want to have a home office, whether it’s a simple space for taking care of household business, a spot for the inevitable papers from school or the office or a dedicated spot for homework and studying.

Tuck a work station into a hallway. Source: Zillow

A well-designed office area can provide a space that encourages productivity and reflects the style of the rest of your home. Finding space can be a challenge. If you’re fortunate to have a spare room, it’s easy to locate an office there. However, all too often, you’ll need to borrow space from an existing room — diplomatically, so as not to disturb the room’s original purpose. A common spot is a corner of a kitchen or family room.

What was once the spot for a telephone in the kitchen was transformed into a small office. Source: Zillow

The advantage is that the office is not separated from the day-to-day activities in the house; it also allows parents to monitor children’s Internet usage.

A little nook right off the kitchen is perfect for managing the everyday busyness of life. Source: Woodstone Renovation

Guest room and office combination

A corner of a guest bedroom is another popular choice. If your guest room must do double duty, look for furniture that keeps the room from being too businesslike, such as an office armoire, chests, cabinets, side tables and footstools with built-in storage.

Combine the guest room with the office space. Source: DKOR Interiors

Space for home offices and study areas can also be found in some unexpected places, such as an underused closet, space under the stairs, or a place in the attic, basement or even a garage.

With built-in furniture, a corner can be just enough space for a dedicated office. Source: Viscusi Elson Interior Design

Designing a work space

Some experts have said that there are only two essentials for a functional home work space: a comfortable chair and a door that closes. For most people, though, there are probably a few more requirements. Basic elements of designing a room include smart space planning, adequate lighting and sufficient storage. When thinking of the home office or study station, also consider functionality and inspirational comfort.

This incredible home office has loads of storage opportunities. Source: Klopf Architecture

Start with your work surface. Stock desk units come in a variety of materials, but may be difficult to fit in your room. Modular office furniture is more flexible and is available in a number of styles. Flea market finds and antiques can be turned, with some judicious changes, into acceptable home office elements.

A vintage roll-top desk is a beautiful and functional addition to a room. Source: Design Development NYC

If you’ll be spending a lot of time working in the office, make sure to choose a chair with an adjustable seat and armrests to protect the spine and help reduce aches and injuries.

A comfortable chair will make any work space more productive. Source: Zillow

Make a list of everything you need, from pencils and paper clips to research materials. Measure all the electronic equipment you’ll require to see where it will fit best. Don’t forget lighting: Natural light is great, but you’ll need ambient and task lighting too.

Use glass jars to organize small office supplies. Source: Brooke Wagner Design

Most of all, make the space functional, yet fun. You will want to have an area to spread out projects, but also control the clutter when the area isn’t in use.

Chalkboard paint in an office is fun — and an organizational tool. Source: Signature Design

The right furniture, equipment and light will ensure thoughtful school or professional work gets accomplished.

This article was originally published by Kerrie Kelly on Zillow Blog. See the original article here.

Kerrie Kelly is a Northern California interior designer and the founder of Kerrie Kelly Design Lab (www.kerriekelly.com). She is an award-winning interior designer, multimedia consultant and an author of two books: “Home Décor: A Sunset Design Guide” and “My Interior Design Kit,” with Pearson Professional and Career Education.

Keeping Your Landlord Happy: DIY Repairs in a Rental

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If you want easy lease renewals, low-to-no annual rent increases and more freedom, you’ll want to make sure your landlord enjoys having you as a tenant.

DIY Repairs in a Rental

How do you make the landlord like you? Well, the key may be to leave them alone and tackle some DIY repairs yourself.

Landlords are busy people. They have other tenants and other demands on their time. When you inundate them with small maintenance requests, you make their job more difficult.

If you become known as a difficult tenant, they’re more likely to up your rent when the time comes. While you don’t want to make every repair yourself, you should limit your requests to necessities.

Here are some quick tips on when to contact your landlord—and when to take on DIY repairs.

Safety Issues: Contact the Landlord

Legally, your landlord has to provide a safe place for you to live. If your rental has any issues putting either your health or safety at risk, you should contact your landlord. Here are some examples of items you shouldn’t try to DIY repair:

  • Broken windows or door locks
  • Light fixtures or ceiling fans that spark or pop when turned on
  • Evidence of burning around light switches
  • Damaged electrical outlets
  • Malfunctioning or broken smoke and carbon monoxide detectors
  • Leaking or broken appliances, cooling and heating systems

You also should ask your landlord to fix these problems as well:

  • Clogged gutters: removing leaves and debris from gutters is time consuming and can be dangerous.
  • Damaged door and window screens: since these will stay with the rental when you move, you should leave them up to your landlord to repair.
  • Roof damage: leaking or damaged roofs require professional repairs.
  • Rodent infestations: rodents can eat through walls and wiring, causing bigger problems later on. Let you landlord know immediately if you spot rodents in your rental.

Cosmetic Issues You Can DIY

Cosmetic issues are tricky. In most states, your landlord isn’t required to make cosmetic repairs, and while many landlords are happy to, you’ll get a bad rep if you contact them about every single blemish.

Try to limit your requests to substantial issues and fix the rest yourself if you’re able.

Here are some examples of DIY repairs you can take care of on your own:

  • Loose cabinet hardware: most drawer pulls and knobs can be tightened with a screwdriver.
  • Stuck drawers: if a drawer is just off track, remove the drawer, line up the tracking and re-install.
  • Liners for cabinets and drawers: hardware stores sell inexpensive, self-sticking liners for cabinets and drawers.

Routine DIY Repairs and Maintenance

Want to be your landlord’s favorite tenant? Then treat your rental like you own it.

The more you’re willing to do small DIY repairs and maintenance yourself, the more your landlord will appreciate having you as a tenant.

Here’s what you should do yourself:

  • Unclog toilets, sinks and bathtubs
  • Replace AC filters
  • Replace smoke detector batteries
  • Clean range hood filters
  • Clean refrigerator coils
  • Replace light bulbs

This article was originally published by  on realtor.com. See the original article here

Buying a Home is 38% Less Expensive than Renting!

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In Trulia’s 2014 Rent vs. Buy Report, they explained that homeownership remains cheaper than renting throughout the 100 largest metro areas in the United States; ranging from an average of 5% in Honolulu, all the way to 66% in Detroit, and 38% Nationwide!

Buying a Home is 38% Less Expensive than Renting!

The other interesting findings in the report include:

Even though prices increased sharply in many markets over the past year, low mortgage rates have kept homeownership from becoming more expensive than renting.

Some markets might tip in favor of renting later this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering.

Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Bottom Line

Buying a home makes sense. Rental costs have historically increased at a higher rate of inflation. Lock in a mortgage payment now before home prices and mortgage rates rise as experts expect they will.

This post was originally published on Keeping Current Matters. See the original post here.