Q & A with Dottie Herman

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Q1 - My husband and I are going to start to look for our first home- we are just confused as to how much home we can afford. What are some steps we can take before we begin the search to know what our budget is?

A - Before you begin looking for a home it is best to speak with a Mortgage lender and have yourself pre-qualified. This service is available from the majority of lenders.  The will review your financial information and credit history to determine the amount of home you can afford. In addition you will learn about the various types of mortgages available to you.

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Q2 - I have lived in my home for about 4 years, and my husband and I are thinking of moving. We want to pay down our mortgage before we think about moving. Would paying an additional payment every other month help us decrease our mortgage significantly?

A - Yes.  Any additional monies you pay above your mortgage payment will go towards directly reducing your mortgages principal balance. Keep in mind that with a fixed rate mortgage loan your payment will not change but you do reduce the term and amount of interest you pay.  If you have an adjustable rate mortgage the payment will change based on the lowered principle balance, but the payment may or may not go down depending on the new interest rate.  Either way you will benefit from paying down your principle balance.

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Q3 - What are some things I can do to my home to make it show better for open houses?

A - I always tell our agents at Prudential Douglas Elliman that open houses should showcase the strengths of the house.  This means focusing buyers on what is best in the home.  To further enhance its strengths there are certainly a few things you can do.  First, removal of all clutter is key.  The home should be free of obstructions (such as furniture items that block a door or a walkway).  If you live in the suburbs 'curb appeal' is critical.  You want buyers to be interested and excited in your home from the first moment they pull up to it. It's always helpful for the house to smell fresh.  Flowers or candles can help to provide a welcoming aroma.  

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Q4 - My home was listed with a real estate broker for a few months- She brought a few potential buyers, however, no one even made an offer. I ran into a friend, who knew someone who wanted to buy in the area, and she ended up purchasing the home- do I still have to pay the broker a commission even though I essentially sold the home myself?
 
A - I would recommend you request your real estate attorney to review the exclusive agreement to determine if there were any exclusions or provisions under which you are not obligated to pay a fee.  However, from the situation that you describe it sounds like that agent is entitled to a commission. As the rules governing this kind of issue can vary from state to state, it is best to get a professional legal opinion on this.

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Q5 - I have lived in my house for about 10 years and I am ready to make some home improvements. Can I take cash out of my home and use that money for the improvements? Or can I just tack that onto my mortgage?

A - In most cases mortgages do not allow you to add onto the loan amount once you have signed the loan papers. If your current mortgage has an interest rate that is higher than the current market you can consider refinancing the mortgage to a lower rate and increase the mortgage amount to include the cash your require for the home improvements. The other alternative is to access the equity in your home with a home equity loan in addition to your current mortgage. Speak with your current lender or another mortgage professional who can best help you sort out your options.

 

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