Jeremy, Author at ATG Title

How Much Does it Cost to Buy a House?

October 26, 2021 By Jeremy

The cost to buy a house varies depending on where you live, the demand for the type of house you want to buy, closing costs, and how good of a negotiator you are. One important thing to keep in mind is that the monthly payment you’ll make on your mortgage should be no more than 30 percent of your monthly income. But this only applies to you if you’re a consumer buying a house and not if you’re an investor, wholesaling real estate, or if you are paying cash for a house.

If you’re paying cash for the house then you’re paying for everything up front so there is no need to worry about affording a mortgage. Investors and wholesalers are either going to pay for cash upfront or they’ll be using a hard money loan and have already forecasted a net income on the resale and this is part of their business. They do not plan on living in the house which is why their monthly income is not important whereas you as a home buyer or resident is.

But why are we saying the monthly payments for non-professional home buyers should be no more than 30% of your income?

Simple, a bank or mortgage lender needs to [Read more…]

What is Escrow Balance?

October 19, 2021 By Jeremy

An escrow balance is the amount of money a lender sets aside to pay for homeowners insurance, mortgage insurance, future interest, and property tax payments.

As most of these payments are often made on an annual or semi-annual basis, your lender will bundle all of these payments together in an escrow account to be paid alongside your monthly mortgage payment.

When you access your monthly mortgage statement, you will find your mortgage payments separated into three categories:

Interest Payments
Principal Payments
Escrow Payments

Unlike interest and principal, escrow payments don’t count toward the actual debt of your loan. Rather, escrow counts toward the auxiliary services and fees, such as insurance premiums and property taxes that must be paid under law.

Your lender handles payment of your escrow services because it would be difficult for most people to come up with the considerable sum of money required each year to pay for property taxes, semi-annual insurance premiums, etc.

Now that you know what escrow balance is and how it works, lets look over some common questions about escrow balance.

Can I transfer money out of my escrow account?

[Read more…]

What Is Underwriting in Real Estate?

October 12, 2021 By Jeremy

Underwriting in real estate is the process of a third party determining how much risk a lender or insurance company is willing to take on a person.

There are three types of underwriters in real estate:

Mortgage underwriter
Title insurance underwriter
Homeowner’s insurance underwriter

Each of these underwriters are tasked with ensuring you and the property you are buying will be a safe investment for their companies to make.

All forms of real estate underwriting occur in the background of the closing process, and you will have no contact with the underwriter other than through your lender, insurance agent or title company.

Now that you know what underwriting in real estate is, lets look at the role each underwriter plays in the process when you buy a house.

The Role of the Mortgage Underwriter

A mortgage underwriter’s role is to determine your financial ability to pay the lender back for your mortgage. [Read more…]

What is a Real Estate Broker?

October 5, 2021 By Jeremy

A real estate broker is a real estate agent who has obtained a license to become a practicing broker within his or her respective state. Unlike traditional real estate agents, brokers can work independently, hire staff, and create their own firm whereas traditional agents must work for a qualifying brokerage.

Real estate brokers are essential intermediaries in the transaction process, navigating transactions from initial listing and discovery to closing.

When you hire a traditional real estate agent, you are also getting the complete package of a brokerage, which provides access to an MLS, lenders, title insurance company recommendations, supervising agents, and so much more.

While agents can help buyers and sellers get through the initial stages of the transaction, a broker is required by state law to finalize the process.

Brokerage laws differ by state, but generally, you must complete a broker’s license exam to become a broker. For example, in Colorado and New Mexico, all real estate agents are licensed as brokers. However, these states require an additional exam and license before a licensed broker can hire agents and start their own firm.

While many may understand what a real estate agent is responsible for, it’s just as crucial for both agents and prospective home buyers to understand the role of the real estate broker. [Read more…]

What is Unimproved Land & Is It Worth Buying?

September 28, 2021 By Jeremy

Unimproved land (sometimes known as vacant lots or more commonly raw land) is land that does not have any active services or public utilities running through it like water lines, electricity or even street access from the public roadways. Improved land is different from unimproved land in that it will have at least a few of these services making it easier to buy and develop. But this doesn’t mean you should avoid investing in unimproved land.

You can use unimproved land for:

Holding and reselling once property values begin to increase
Building a dream house
Creating an investment property to rent or sell
Developing a community or private grouping of homes
Designing a park and area to give back to your community

So if you’re wondering whether or not to invest money to build on unimproved land, that will depend on your situation. So if you’re thinking about purchasing unimproved land, below you’ll learned when it is a good and when it is a bad idea to make this investment.

When Is It Smart to Buy Unimproved Land?

[Read more…]

How to Make an Offer on a House That Gets Accepted

September 21, 2021 By Jeremy

You’ve been searching and searching for the perfect home for your family. You’ve scoured listings and gone on tours and open houses. And finally you’ve found “the one.”!

Now it’s time to make an offer on the house that will get accepted. And that is what this guide will help you do.

Below you’ll learn how to make an offer on a house that gets accepted. We cover when to go under market value and when to go higher even at the risk of no other offers. You’ll also find some tips on how to make your offer stand out if multiple people sent similar ones.

To ensure you’re taken seriously as a buyer, start with the following: [Read more…]

How Much Does It Cost to Sell A House?

September 14, 2021 By Jeremy

It costs roughly 15 percent of the selling price to sell a house. But keep in mind the actual cost of selling a house depends on many factors including the appraisal price, market demand, the repairs or upgrades you make, and real estate agent fees if you use an agent (which we recommend you do).

The total cost to sell your house will also vary based on where you live and the condition of your house at the time of sale. For instance, a seller listing a house in a “sellers market” will likely be able to charge more money making the 15% cost to sell a house shrink. And vice versa. If you list in a “buyers market” you could see the 15% cost to sell a house increase because you have to compete with the other houses in your stratified market.

Another example of how these costs can change is if your house fails parts of the inspection. Failing inspection can lower the total value of the home so you make less, or the buyer could require you to fix them adding an additional cost.

If you’re worried about having to take all the costs and reducing how much you can make on your home, don’t be. Depending on your deal and means of selling (using an agent versus selling on your own), many of the costs can become the buyer’s responsibility. So lets jump in and look at which costs can be yours, both parties or the buyers responsibility.

Costs Sellers Cover:

[Read more…]

Should You Pay a Mortgage Principal or Escrow First?

August 31, 2021 By Jeremy

Should You Pay a Mortgage Principal or Escrow First

If you’re stuck between paying down the balance on the principal or escrow on your mortgage, always go with the principal first. By paying towards the principal on your mortgage, you’re actually paying on the existing debt, which brings you closer to owning your home.

On the other hand, escrow is essentially third-party funds to cover things like property taxes, homeowners’ insurance fees, and future interest, so if it is really bugging you this is another option.

But as we said, when you have to choose between paying the principal or escrow on your mortgage, always go Principal!

First and foremost, you can shorten the length of your mortgage term. This process can be expedited even further by making extra payments or going above the minimum required payment. This happens by minimizing potential interest.

Paying the principal first also increases your home’s equity. [Read more…]

What Does it Mean When the House You Want is “Contingent”?

August 24, 2021 By Jeremy

Your dream home is now listed as contingent. While that sounds like a bad thing, it doesn’t necessarily mean you won’t end up being able to buy this property.

The term contingent doesn’t exactly come across as inviting, but it’s nothing to keep you up at night. Contingent is just a real estate term and below you’ll learn what contingent means in real estate, how it applies to a home sale, and what it means to you as a home buyer.

What does contingent mean in real estate?

Contingent in real estate means that the seller has accepted the buyer’s offer, and now either party is sorting through their responsibilities as laid out in the contract they signed before closing.

The term contingent is derived from the contingencies that are put in place by the contract. Those contingencies are in place to provide a legal out for either party if something goes wrong or if either violates their end of the contract.

For example, if the home inspection reveals an issue that the seller failed to disclose, or the buyer fails to come up with the cash to purchase the home, the contract can be void allowing either party to back out unless a solution is met. [Read more…]

Can I Use My 401 to Buy a House?

August 10, 2021 By Jeremy

Yes, you can use your 401k to buy a house. But should you? This is your guide to understanding how it works and deciding if it’s a smart move for you.

Yes, you can use your 401k to buy a house so long as the holder of your account allows you to withdraw or take a loan from said account. However, if it were the ideal option, everyone would be doing it.

There are some major risks tied to the benefits of being able to tap into your 401k accounts now. That said, we want to help you understand exactly what’s in store if you decide to take this route in your home buying process.

Is it a good idea to use 401k to buy a house?

Yes, in some instances using your 401k is a perfectly viable option to purchase a home. However, if you have any other form of savings set aside, you really should consider using those funds before you go with this option.

The simple fact is that you’re borrowing or taking money from your future self when you tap into a retirement account. That means that you’re shorting yourself tomorrow to make ends meet today. Even if you only borrow money from the account, it will only accrue interest based on its current value. This is known as an opportunity cost. [Read more…]