Can you give me some help with understanding financing terms?
Sure! Here are some basic financing terms all home buyers should know.
For more answers to questions about real estate terms and procedures, call or e-mail us. We can help you get through the home buying experience with a clear head.
Are FHA loans really assumable these days?
Assumable loans can be an excellent opportunity for home buyers as they offer buyers a chance to obtain a loan, often at an attractive interest rate without the red tape of credit checks, etc.
Many people have FHA (Federal Housing Administration) loans. that are fully assumable, but they may not know it. Over the years, the FHA has changed its assumption criteria. Here’s a rundown:
Therefore, it depends on each individual situation which ownership plan is better. If an unmarried couple has wedding plans, a joint tenancy would protect each partner’s interest in case of the other partner’s death. On the other hand, if no marriage is in the picture, tenancy-in-common might be the preferred route – accompanied by wills stating to whom the property will go in case of death.
It’s essential that partners-in-purchase iron out all details of such arrangements between themselves before choosing a mode of ownership. It’s also advisable to discuss any agreement with lawyers representing both parties.
What can you tell me about equity-sharing?
More and more, it’s taking two salaries to buy a home. That’s why equity-sharing is becoming a popular financing tool – usually on a 3-year to 5-year basis. Partners may, of course, be related or unrelated. Typically, an investor puts up the down payment (10% to 20% of the purchase price); the partner pays closing costs and takes up residence. The resident partner makes the mortgage payments, pays for maintenance and gets the tax advantages. Upon sale of the property, both partners share in the equity.
Here are some advantages and disadvantages of equity-sharing for you to consider:
For The Home Buyer.
For The Investor.