Which is Better, 15-Year or 30-Year Mortgage?

The home loan or mortgage represents for most people the highest cost purchase they will make in their life, unless they buy a second house for even more. The reason being is because the financing involves a large amount of money being paid back slowly over a very long period of time. Even at a low interest charge level, mortgages are still going to produce a profit twice or three times over the original amount provided by a lender.

The most common mortgages involve fixed loans where the interest doesn’t fluctuate. These home loans come in either 15-year or 30-year formats. This of course eventually raises the question of which loan is better for a buyer, and it depends on the buyer’s individual situation.

Monetary Cost Difference

Clearly, paying a large home loan back in 15 years rather than over 30 years will be far cheaper. The shorter time period allows less compounding of interest and more money goes to the principal loan outstanding. As a result, the loan is paid off faster with less borrowing cost for the buyer.

For example, a $160,000 mortgage at 5% over 30 years versus the same amount over 15 years at 4.5%. The 30-year mortgage will cost $859/month, the buyer will lose $149,211 to interest charges, and the total cost will aggregate to $309,211 over the life of the loan. In comparison, the 15-year mortgage will result in a billing of $1,224/month, a lost cost of $60,318 in interest charges and a total loan expense of $220,318 over the life of the loan. The 15-year loan ends up being $88,893 cheaper.

Cash Flow Difference

On the flip side, the 30-year mortgage makes buying a home far more affordable on a monthly cash flow basis. Because the 30-year loan is paid over a much longer period, the monthly payment is far less. This makes the borrowing more affordable for those who can’t afford to pay out a couple thousand dollars of their income every thirty days. Using the same loan comparison example from above, the 30-year mortgage costs $365/month less.

Taxes

While there’s a lot of debate regarding the matter these days, the fact is a home mortgage provides a very helpful tax deduction on federal tax filing. The interest a homebuyer pays annually can be written against taxes owed, reducing that bite the IRS and federal tax law demands out of one’s income every April 15th. So the 30-year loan benefits a buyer on tax basis far more than a 15-year loan.

Alternatives

There is also an option of having both worlds. A buyer could start his home purchase off with a 30-year fixed loan, enjoying the lower payment per month but then work towards paying it off in a 15-year early push. This would produce a similar, high monthly cost at the 15-year level, but it would likely shave off close to $80,000 in expenses, depending on the details involved. This approach offers a valuable safety net as well. For instance, if the buyer ends up in hard, financial situation after the loan is started, he can always scale back the payment to a 30-year value without any penalty. This, of course, assumes the lender didn’t include any kind of an early payment penalty in the loan agreement.

Conclusion

As a result, the best home loan depends on the buyer's needs, wants and what he can afford to pay. The optimum loan is one with the most flexibility for the buyer, both cost-wise as well as on a cash flow basis. This ensures the probability of paying the loan without running into default problems.

Provided by: www.refinancemortgagerates.org

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The Featured Home of the Week is at 125 Norton Road in Easton  for $1.4M. See the virtual tour HERE

Buying or Selling a Home in Fairfield County, CT?  Contact us!

If you have a question about buying or selling Real Estate in  Fairfield County, and are in need of representation, I invite you to contact me. I know the market like the back of my hand, know marketing inside and out, am a skilled negotiator- and I'd love to be on your side :) - Judy

Search for properties on any of our sites, or get the very best visibility available for your home. Visit us online wherever you like:

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 Email us or  call Toll Free (855) GET-JUDY

Is That For Sale Sign in Front of Your Home REALLY Necessary?

Some home sellers can't wait for the sign to go up, and yet  others simply detest the idea altogether.

There are many positives to allowing your agent to place a For Sale sign in front of your home, and they far outweigh any negatives that you could possibly think of.

Understandably, some home sellers do not want to come home and see a for sale sign in front of their house. It can be because:

1. They really don't want to move but have to for one reason or another, and don't want to see the reminder every time they come home.

2. The homeowner is concerned about their privacy within the neighborhood, and unfounded or unwarranted gossip.

3. The home seller has concerns about security, (it doesn't matter how good or bad a neighborhood is for them to feel this way)

4. Embarrassment if the home doesn't sell  right away- and the neighbors will all know it.

If you have any of these concerns, please reconsider. For most houses, the short answer to whether you should have a for sale sign placed out in front is a resounding yes.
 
A for sale sign lets the un-wired world know that your home is for sale.

Even if you live on a dead-end road, your neighbors have visitors who have come over to their house, who have inevitably admired your home. They would buy it in an instant if they only knew it was available.

Your neighbors may know someone who is moving to the area, and they can AND WOULD tell someone about it. They have the unique option of trying to "pick" their neighbors.

Your neighbors WANT you to get a high price, so that their home is  worth more.

Maybe a neighbor has also been thinking about putting their home up for sale, but hasn't done so as of yet. Seeing a sign in front of your home may just be the impetus that they need.

In spite of what you may think about competition close by, it is actually BETTER for you. A buyer for another home on your street or neighborhood will see your sign when they are looking at another house, and ask the agent to see your home, too. If the sign wasn't there, they wouldn't know about it. Who knows, they could end up buying YOUR home.

Bottom Line? Signs help to sell properties.

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The Featured Home of the Week is at 125 Norton Road in Easton  for $1.4M. See the virtual tour HERE

Buying or Selling a Home in Fairfield County, CT?  Contact us!

If you have a question about buying or selling Real Estate in  Fairfield County, and are in need of representation, I invite you to contact me. I know the market like the back of my hand, know marketing inside and out, am a skilled negotiator- and I'd love to be on your side :) - Judy

Search for properties on any of our sites, or get the very best visibility available for your home. Visit us online wherever you like:

www.CThomesAndRealEstate.com      www.TheCTrealtyBlog.com     www.TheCTRB.com    and   www.CTfeaturedHomes.com 

 Email us or  call Toll Free (855) GET-JUDY

2,114 SF Ranch on 1.24 Acres in Westport CT - Great Price/Great Privacy

This spacious ranch home at 4 Highwood Lane in Westport is listed for just $700,000. Locate on 1.24 acres and set  back from the road, there is 2,116 square feet of living area that includes three bedrooms, three full baths, and two fireplaces. See a mini tour HERE

Call or text Judy today for your private showing

(203) 257-5892

Or email us here-

Buying or Selling a Home in Fairfield County?  Contact us!

If you have a question about buying or selling Real Estate in  Fairfield County, and are in need of representation, I invite you to contact me. I know the market like the back of my hand, know marketing inside and out, am a skilled negotiator- and I'd love to be on your side :) - Judy

Search for properties on any of our sites, or get the very best visibility available for your home. Visit us online wherever you like:

www.CThomesAndRealEstate.com      www.TheCTrealtyBlog.com     www.TheCTRB.com    and   www.CTfeaturedHomes.com 

 Email us or  call Toll Free (855) GET-JUDY

Those Trees Are Beautiful, But They Can Be Dangerous to Your Home

Although trees are generally a desirable feature of home landscaping, they can pose a threat to buildings in a number of different ways. Inspectors may want to educate themselves about tree dangers so that they can inform their clients about potentially dangerous situations.

Tree Roots and Foundations

Contrary to popular belief, InterNACHI has found that tree roots cannot normally pierce through a building's foundation. They can, however, damage a foundation in the following ways:

    Roots can sometimes penetrate a building's foundation through pre-existing cracks.  
    Large root systems that extend beneath a house can cause foundation uplift.
    Roots can leech water from the soil beneath foundations, causing the structures to settle and sink unevenly.

Other Dangers:

    Trees that are too close to buildings may be fire hazards. Soffit vents provide easy access for flames to enter a house.
    Leaves and broken branches can clog gutters, potentially causing ice dams or water penetration into the building.
    Old, damaged or otherwise weak trees may fall and endanger lives and property. Large, weak branches, too, are a hazard, especially if weighed down by ice.
    Tree roots can potentially penetrate underground drainage pipes, especially when they leak. Water that leaks from a drainage or sanitary pipe can encourage root growth in the direction of the leak, where the roots may eventually enter the pipe and obstruct its flow.
    Trees may be used by insects and rodents to gain access to the building.
    Falling trees and branches can topple power lines and communication lines.

Structural Defects in Trees - Dangerous Crack in tree .

 
Trees with structural defects likely to cause failure to all or part of a tree can damage nearby buildings. The following are indications that a tree has a structural defect:

    dead twigs, dead branches, or small, off-color leaves;
    species-specific defects. Some species of maple, ash and pear often form weak branch unions, while some other fast-growing species of maple, aspen, ailanthus and willow are weak-wooded and prone to breakage at a relatively young age;
    cankers, which are localized areas on branches or stems of a tree where the bark is sunken or missing. Cankers are caused by wounding or disease. The presence of a canker increases the chance that the stem will break near the canker. A tree with a canker that encompasses more than half of the tree's circumference may be hazardous even if the exposed wood appears healthy;
    hollowed trunks;
    Advanced decay (wood that is soft, punky or crumbly, or a cavity where the wood is missing) can create a serious hazard. Evidence of fungal activity, such as mushrooms, conks and brackets growing on root flares, stems or branches are indications of advanced decay. A tree usually decays from the inside out, eventually forming a cavity, but sound wood is also added to the outside of the tree as it grows. Trees with sound outer wood shells may be relatively safe, but this depends on the ratio of sound-to-decayed wood, and other defects that might be present;
    cracks, which are deep splits through the bark, extending into the wood of the tree. Cracks are very dangerous because they indicate that the tree is presently failing;
    V-shaped forks. Elm, oak, maple, yellow poplar and willow are especially prone to breakage at weak forks;
    The tree leans at more than 15 degrees from vertical. Generally, trees bent to this degree should be removed if they pose a danger. Trees that have grown in a leaning orientation are not as hazardous as trees that were originally straight but subsequently developed a lean due to wind or Canker in tree root damage. Large trees that have tipped in intense winds seldom recover. The general growth-form of the tree and any uplifted soil on the side of the tree opposite the lean provide clues as to when the lean developed.

Tips that inspectors can pass on to their clients:

    Binoculars are helpful for examining the higher portions of tall trees for damage.
    When planting trees, they should be kept far from the house. It is impossible for the homeowner to reliably predict how far the roots will spread, and trees that are too close to a building may be a fire hazard.
    Do not damage roots. In addition to providing nutrition for the tree, roots anchor the tree to the ground. Trees with damaged roots are more likely to lean and topple than trees with healthy roots. Vehicles are capable of damaging a tree's root system.
    Dead trees within the range of a house should be removed. If they are not removed, the small twigs will fall first, followed by the larger branches, and eventually the trunk. This process can take several years.

    Inspect your trees periodically for hazards, especially in large, old trees. Every tree likely to have a problem should be inspected from bottom to top. Look for signs of decay and continue up the trunk toward the crown, noting anything that might indicate a potential hazard.

by Nick Gromicko and Rob London

Nick Gromicko, FOUNDER. http://www.nachi.org
International Association of Certified Home Inspectors (InterNACHI) is the world's most elite, non-profit inspection association.
President, ComInspect, www.cominspect.com
Director, Master Inspector Certification Board, www.certifiedmasterinspector.org
Author, 15 books and Co-Host of  http://www.NACHI.TV

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Buying or Selling a Home in Fairfield County?  Contact us!

If you have a question about buying or selling Real Estate in  Fairfield County, and are in need of representation, I invite you to contact me. I know the market like the back of my hand, know marketing inside and out, am a skilled negotiator- and I'd love to be on your side :) - Judy

Search for properties on any of our sites, or get the very best visibility available for your home. Visit us online wherever you like:

www.CThomesAndRealEstate.com      www.TheCTrealtyBlog.com     www.TheCTRB.com    and   www.CTfeaturedHomes.com 

 Email us or  call Toll Free (855) GET-JUDY

Connecticut Financing Update and Today's Mortgage Rates 8/24/12

Mortgage rates  have been on the rise in the past two weeks,  but still look good, and it is  still a perfect time to purchase a home and/or refinance your existing mortgages.  Entering this week, investor hopes were high that significant progress would be made to stem the European crisis but optimism is fading fast.  The latest reports are that the ECB will not finalize its bond plan until Germen courts weight in on the legality of the bailout fund.  Here is the  US, Durable Goods jumped 4.2% in July, better than the expected 2.5% increase. Currently, the 10yr yield is at 1.639% and mortgages are roughly unchanged from yesterday morning.

Today's Mortgage Rates

Conventional 30 year fixed          3.625%                  APR 3.671%

Conventional 15 year fixed          3.00%                    APR 3.081%

Conventional 5/1 ARM                  2.5%                      APR 3.036%

Conventional 7/1 ARM                  2.75%                    APR 3.065%

The above rates are based on a loan amount of $417,000 for a single family home, a borrower’s middle credit score of 740 and a 20% down payment.

This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. This is not an offer to enter into a rate lock agreement under any applicable law.

 

As a lending professional, Nima Rezvan meets a wide range of real estate lending needs, whether it be a first time purchase, second home purchase, or refinance. He welcomes the opportunity to serve your needs with quick and accurate real estate financing advice. With his expertise and knowledge, he will make sure you understand the features associated with the loan program you choose and that it meets your unique financial situation.

With more than 10 years of mortgage lending experience, Nima specializes in  Conventional Mortgages,  Jumbo Loan Financing, Refinance, First Time Home Buyers and Federal Housing Administration/Veterans' Administration (FHA/VA)

 NMLS #110681

send Nima an email

Mobile: 203-913-6016
Fax: 877-804-5752

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Buying or Selling a Home in Fairfield County?  Contact us!

If you have a question about buying or selling Real Estate in  Fairfield County, and are in need of representation, I invite you to contact me. I know the market like the back of my hand, know marketing inside and out, am a skilled negotiator- and I'd love to be on your side :) - Judy

Search for properties on any of our sites, or get the very best visibility available for your home. Visit us online wherever you like:

www.CThomesAndRealEstate.com      www.TheCTrealtyBlog.com     www.TheCTRB.com    and   www.CTfeaturedHomes.com 

 Email us or  call Toll Free (855) GET-JUDY