When it comes to mortgages there is a lot to know and a lot of choices. One loan that was popular before the housing crisis was the interest-only loan. An interest-only loan is an adjustable-rate loan with an initial fixed period when only interest is due. They are typically available in 5-, 7- or 10-year terms. Economists blame interest-only loans for the foreclosure crisis citing they were issued too freely. Today, interest-only loans are more difficult to obtain. Borrowers were using interest-only loans to qualify for a more expensive home and when the interest-only term ended the payment went up leaving many homeowners unable to afford the mortgage payment. Interest-only loans are now being used by wealthy borrowers as a financial tool to help them manage irregular cash flow, reap a tax benefit, or free up cash for investment elsewhere. Lenders that offer interest-only loans have strict qualifying standards. They generally require 30 percent equity in a property, and a minimum FICO score of 720. Lenders also look at the ability to pay back the loan is based on the fully amortized payment, not the interest-only payment.
A home is a very big purchase in your life and one of the most important things you can do before you buy your new home. It can be difficult to find a qualified home inspector. You will want to make sure to do your homework before paying for a home inspection. Here are some tips to help you get on the right track and finding the right home inspector. Ask for opinions. Ask your friends and your real estate agent who they recommend who have had an inspection recently. You can also ask the inspector for references. Word of mouth is always a great way to find a reliable professional. Check with your lender Some lenders or loan types require a certain type of inspection. You will want to make sure your inspector qualifies and you obtain the necessary type of inspection. Ask what the inspection covers No two home inspections are the same so you will want to be sure to know what you are paying for. Ask questions like:
What systems are covered in the home inspection?
Are there some services that require an extra fee?
Ask for an example or outline of the inspection report.
Ask for a resume or background questions
Where was the inspector trained?
Does he or she attend continuing education classes?
Does the inspector belong to a professional organization?
If so, what are the requirements for membership? Entry should require more than just an application fee.
Does the inspector carry Errors & Omissions insurance? This type of malpractice insurance may come in handy if the inspector overlooks a major problem.
At the inspection
A home inspection is not only a time to find the potential pitfalls it can also be a time to learn about your new home. Make sure to attend the inspection yourself. Witnessing problems first-hand will give you a better grasp of the home.