FAQs

An opinion of a property’s fair market value, based on a certified appraiser’s inspection and analysis of the property.

Closing costs are expenses incurred by buyers and sellers in transferring ownership of a property.

Generally, real property never depreciates in value, or more so, it is not very common for property to depreciate.  This is why it's a great investment.  Carefully consider location and community when choosing a home, it could make a big difference.

To figure out where you stand on the debt-to-income ratio, you must first understand the meaning of the figure.  Most lenders use the ratio 28/36.  

The first number, which is also referred to as the front-end ratio, is the percentage of your gross monthly income that you could comfortably afford to spend on your housing payments or mortgage.  This figure includes the money you spend on property taxes and insurance as well as the loan payment itself.  

The second number, which can also be referred to as the back-end ratio, is the percentage of your gross monthly income that should be spent on all long-term monthly debts combined.

Use the following guidelines to find out where you stand:

- First, figure out your gross monthly income (your income before taxes).  To do this, take your gross yearly income and divide it by 12.

- Multiply this figure by 28 percent (.28).  The amount you come up with is TYPICALLY the amount you could comfortably afford to spend on your housing payments per month.

- Now, take your gross monthly income (your gross yearly income divided by 12) and multiply it by 36 percent (.36).  The figure shown should be the TOTAL amount of money you spend on ALL LONG-TERM DEBTS COMBINED.  To get a more accurate mortgage estimate, tally up your monthly bills - which include car payments, credit cards, child support, alimony, etc. - and subtract this amount from the figure you just came up with.  However much money is left over is the amount you should truly be spending on your housing payments per month.

Comprehensive homeowners insurance is the most expensive type of homeowners insurance; it covers the most potential damages such as fire damage, water damage not caused by flooding (which would fall under your Flood Insurance policy), your personal possessions, personal liability, theft and vandalism.  It is usually required that you carry at least a basic hazard insurance policy.

When concerning homeowners insurance, it's important to shop around as soon as possible to avoid being caught in a jam in the event that your insurance company refuses to insure your home.

You have two options concerning comprehensive homeowners insurance: Guaranteed Replacement Cost Coverage & Straight Replacement Cost Coverage.  Guaranteed Replacement is not available everywhere, but is recommended if you can afford it as it pays to rebuild your home even if the amount to rebuild exceeds your policy limit.  Straight Replacement is a cheaper choice, but it is limited.  It will pay to rebuild your house in the event that it is destroyed, however it will only cover costs up to the policy amount - so if you choose this option, make sure to buy enough coverage to rebuild.

Equity is the financial interest or cash value of your home, minus the current loan balance(s). If selling the home, this would also be minus any costs incurred in selling the home.

If you're buying a home and don't have very much money for the down payment, you may want to find out if the seller would be interested in "sweat equity".  This would allow you to perform the labor on any needed repairs and maintenence to the home, (such as outside repairs, painting or electrical work) in exchange for credit towards closing costs.