What Determines Interest Rates?

When you’re shopping for a mortgage, you want to get the best possible interest rate – but how do you do that?

What Determines Interest Rates?

Your credit score and the market typically determine what interest rates you’re eligible for when you apply for a mortgage loan. However, there are a few things you can do to change your rate.

Here’s why interest matters so much. A $100,0000 loan with a 5 percent interest rate will cost you $93,256 in interest payments – but if you had a 4.5 percent interest rate, you’d pay $82,407 in interest over the life of your loan. That’s a savings of $10,849.

How to Lower How Much You Pay in Interest

Improve your credit score. The higher your credit score is, the lower your interest rate will be.
Pay points. Discount points are equal to 1 percent of the loan amount, and in many cases you can use them to buy down your interest rate.
Put down more money. The higher your down payment is, the less you have to borrow – and your down payment is tied to the interest rate you’ll get.
Shorten the term of your loan. Your loan is shorter, so you’ll end up paying less money in interest.

Are You Buying a Home for Sale in Aspen?

Call us at 970-429-8275 or get in touch with us online to tell us what you want from your next home. We’ll begin searching Aspen real estate listings right away. If you’re selling, get your free Aspen real estate market update and find out how we can help you sell your home quickly and at the best price.

While you’re here, you can also browse based on your budget:

What Does a Builder’s Warranty Cover?

If you’re buying a newly constructed home for sale, you’ll most likely get a builder’s warranty with your purchase.

But what does a builder’s warranty cover?

What Does a Builder’s Warranty Cover?

While every builder is different, for the most part, your builder’s warranty should cover:

Carpentry
Clapboard and shingles
Concrete foundations and floors
Doors and windows
Dry basement
Electrical
Garage doors
Glass
Heating and cooling
Insulation
Landscaping
Paint
Plumbing
Roofing and siding
Septic system
Thermal and moisture cover
Waterproofing

It’s probably in your best interest to have an attorney look over the warranty before you agree to it – and at the very least, you should read it thoroughly. You can’t count on the warranty to cover everything, but it should at least guarantee the builder’s craftsmanship and materials.

Are You Buying a Home for Sale in Aspen?

While you’re here, you can also browse based on your budget:

Why You Need Mortgage Preapproval Before You Start House-Hunting

If you’re like most people buying a home for sale in Aspen, you’ve heard how important it is to get mortgage preapproval before you start house-hunting – but why?

Why You Need Mortgage Preapproval

When you want to buy a home, your first step is mortgage preapproval. When you have a preapproval letter, it serves two purposes. First, it tells you exactly how much house you can afford and gives you a price range to start looking in; second, it gives you the ability to make an offer quickly when you find a house you love.

Preapproval vs. Prequalification

Preapproval is different from prequalification. Preapproval requires you to submit documents that back up your claims about how much money you make, while prequalification is simply a letter from a lender that says, “If you make as much as you say you do, we’ll probably let you borrow the money.”

What You Need for Mortgage Preapproval

You’ll have to provide your lender with several documents for mortgage preapproval, including:

Tax returns from the past two years. Your lender wants to make sure your reported annual income is accurate.
Pay stubs. Your pay stubs will show your lender exactly how much you make in a month.
Bank statements. Lenders want to see how much money you have put away for mortgage payments, as well as to see if your down payment is in there.
Proof of other assets. If you’re using other assets to pay for your house, the bank will want to know about them.
Gift letters, if you have them. If you received money from family or friends for a down payment, your lender will probably want letters saying that it was a gift and not a loan.

Are You Buying or Selling a Home in Aspen?

While you’re here, you can also browse based on your budget:

How Your Past Payment History Affects Your Ability to Get a Loan

If you’re buying a home for sale in Aspen, you know that your credit score is the biggest factor lenders consider when they’re deciding whether you qualify for a mortgage loan.

And your past payment history is a big part of that.

How Your Past Payment History Affects Your Ability to Get a Loan

Your payment history makes up 35 percent of your credit score, so if you have late payments or missed payments, your score will go down. In most cases, creditors don’t report payments as late until they’re 30 (or more) days past due – but some do report as early as a day past the due date.

Even one missed payment can have a negative impact on your credit score.

If you have multiple late payments, they’ll get reported multiple times – and another thing to know is that payments that are more than 60 days late drag your score down even further.

For the most part, late payments stay on your credit history for 7 years.

Are You Buying a Home in Aspen or the Surrounding Communities?

We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.

While you’re here you can also browse our:

Search Aspen Real Estate Listings by Price

What is a Short Sale?

If you’re like many people exploring homes for sale in Aspen and the surrounding communities, you’ve seen listings for short sales – but what are they, and should you buy one?

What is a Short Sale?

The term short sale refers to a property being sold at a price lower than the amount the owner owes his or her lender.

The lender has to agree to a short sale because, after all, the lender is losing money. Usually, lenders will only agree to a short sale when the home is in danger of foreclosure (a bank can’t do anything with a repossessed house except sell it, which costs money and requires a significant amount of time).

Should You Buy a Short Sale?

Short sales go on the market because the owner can’t afford them. They’re usually as-is sales, so you won’t have much (or any) room to negotiate the price or to ask for repairs. If the home inspection doesn’t turn up anything you can’t live with or that you can’t repair yourself, then it may be a good buy.

Are You Buying a Home in Aspen or the Surrounding Communities?

We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.

While you’re here you can also browse our:

Search Aspen Real Estate Listings by Price

3 Expenses You Need to Know About Before You Buy a Home

When you’re buying a home for sale in Aspen, Carbondale, Basalt or elsewhere, you already know that you have to come up with money outside the purchase price. Here are three expenses you need to know about before you purchase a house.

3 Expenses You Need to Know About Before You Buy a Home

Knowing what’s in store makes the whole process easier, so plan for these three expenses.

Home-Buying Expense #1: Earnest Money

You can expect to spend between 2 and 5 percent of a home’s purchase price on an earnest money deposit. This money shows the seller that you’re “earnest” in your commitment to buy. When you close, the money usually goes toward your closing costs or your down payment.

Home-Buying Expense #2: Origination Fees

Origination fees are costs you pay the loan officer or broker for completing the loan. It covers underwriting and processing the costs of buying. It’s about 1 percent of the purchase price in most cases, but it does vary.

Home-Buying Expense #3: Home Inspection

When you make an offer on a home and a seller inspects it, you’ll want a qualified home inspector to check it out and make sure there aren’t any major issues. If issues do come up (even if they’re minor), you can use them to negotiate with the seller or cancel the deal.

Are You Buying a Home in Aspen or the Surrounding Communities?

We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.

While you’re here you can also browse our:

Search Aspen Real Estate Listings by Price

What is a Balloon Loan?

A balloon loan is an option you may have when you’re buying a home in Aspen – but what is it, and why do people use them?

What is a Balloon Loan?

A balloon loan is a kind of loan that doesn’t fully amortize over its lifetime. At the end of the loan, a balloon payment is required – and that balloon payment has to cover the remaining principal balance.

They’re often a bit attractive to short-term borrowers, including investors, because they often have lower interest rates than those with longer terms.

Sometimes these balloon loans have “reset” options. At the end of the period of the loan, the borrower has the option to reset the interest rate based on what’s happening on the market that day.

Are You Buying a Home in Aspen or the Surrounding Communities?

We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.

While you’re here you can also browse our:

Search Aspen Real Estate Listings by Price

Fixed Rate vs. Adjustable Rate Mortgages

If you’re buying a home, you’ll have plenty of options when it comes to financing – and one of them will include choosing between a fixed rate and an adjustable rate mortgage.

What is a Fixed Rate Mortgage?

A fixed rate mortgage is one in which your interest rate remains the same over the lifetime of your loan. Your payments will never change, no matter what new buyers are facing on the market, unless you refinance.

What is an Adjustable Rate Mortgage?

An adjustable rate mortgage is one in which your interest rate fluctuates each year, usually on or near the same date. Your payments can go up or down, but that’s only after an initial fixed rate period (which is usually between 5 and 10 years).

Which One is Right for You?

You should talk to your lender about your choices and see which type of loan is best for your financial circumstances. You have the right to compare loan terms and packages, as well, so call as many lenders as you’d like to find one that’s willing to give you the most competitive rates possible.

Are You Buying a Home in Aspen or the Surrounding Communities?

We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.

While you’re here you can also browse our:

Search Aspen Real Estate Listings by Price

Buyer’s Markets vs. Seller’s Markets

The real estate market hasn’t always been predictable – but your Aspen real estate agent can tell you whether we’re currently in a buyer’s market or a seller’s market.

So what do those two terms mean?

What is a Buyer’s Market?

Real estate pros consider it a buyer’s market when there are more houses for sale than there are buyers to scoop them up.

There were buyer’s markets all across the country during and after the Great Recession in 2008. Home prices sunk, people foreclosed and left empty homes, and builders couldn’t get buyers to take their new inventory off their hands.

Typically in a buyer’s market, sellers have a more challenging time selling. If buyers don’t like a home, it’s easy to move on and find one that they do like.

What is a Seller’s Market?

A seller’s market is opposite from a buyer’s market. There are fewer homes available for buyers, and buyers are there waiting for an opening to come along.

There were seller’s markets all over the country leading up to the Great Recession. Multiple buyers were bidding on homes, driving up prices.

Often in a seller’s market, sellers can price a home fairly and expect several offers (maybe not bidding wars, but at least multiple offers).

However, every home is different – and there’s no guarantee what will happen when you’re buying or selling.

Are You Buying a Home in Aspen or the Surrounding Communities?

We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.

While you’re here you can also browse our:

Search Aspen Real Estate Listings by Price

3 Things to Do Before You Buy a House in Aspen

Before you buy a house in Aspen, Basalt, Carbondale or elsewhere, you need to take a few steps to make sure you’re on the right path.

3 Things to Do Before You Buy a Home

Save Your Money

Make sure you have cash stashed away for a down payment and:

A home inspection
Closing costs
Repairs or upgrades
A few monthly mortgage payments

Get Preapproved

Get your loan preapproval before you even begin looking at houses. That way, you’ll know how much house you can afford – and whether you’ll be able to fit your payments into your budget.

Talk to a Realtor

Make sure you’re working with an Aspen Realtor® who will help you find the perfect home at the right price. Your agent should care about your wants and needs (and know which are which) and should be able to show you any listing you want to see.

Are You Buying a Home in Aspen or the Surrounding Communities?

We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.

While you’re here you can also browse our:

Search Aspen Real Estate Listings by Price

“Brenda went above and beyond as our realtor”

My fiance and I moved to the Valley from Minnesota this past January. We were lucky enough to be set up with Brenda from our realtor in MN. The day we arrived for our house hunting trip, Brenda met us for lunch and went over our plan of attack for the week, as she knew Continue Reading

Maria Golbirsch (and Greg Gazillo) February 28, 2017

“Brenda Wild is our exclusive Realtor”

A consummate professional who always looks out for your best interests…and yet takes the time for hand-holding too…this is why Brenda Wild is our exclusive Realtor.

Roger & Kelly Guth February 28, 2017

“You can expect the royal treatment”

Brenda and her staff get to the heart of your desire, needs and dreams. You can expect the royal treatment and awesome results with Brenda and her team.

Jenn Carlson February 28, 2017

“She gets anything you need”

Brenda is great, very efficient and hard working. She gets anything you need from home and land info to anything about Aspen you could need quickly and accurately.

Bruce Lange February 28, 2017

<< Prev

Next >>