CENTURY 21 Allstars’ Joseph Villaescusa Sheds Light on Procuring the Right Mortgage
Joseph Villaescusa, a California-based real estate broker, understands that buying a home is a major decision. Not only are they major investments, but potential homeowners are also purchasing a future. Buyers need to make sure they are getting the most for their money, especially when mortgages add up to hundreds of thousands of dollars.
There is no better time to purchase a home now that the housing market is on the rise. Like other industries, real estate is influenced by the job market and other financial trends. As the job market hit record lows a few years ago and fewer people were buying homes, sellers were stuck with “For Sale” signs in their yards for months and years at a time. The longer a home is on the market, the lower the price. A home’s price is also influenced by neighborhoods and mortgage rates; the former affects the value of homes within a certain area, and the latter lowered once fewer people were taking out mortgages.
Now hovering in the 4 percent range, however, 30-year fixed rate mortgages are at an all-time low. According to Joseph Villaescusa, this is largely in response to fewer home purchases. Because of tight budgets and the difficulties of selling homes, lending companies reduced interest rates. Rates, though, take time to rise. With more jobs and buyers than ever, people are able to sell their homes quicker and at higher listing prices.
For many, Joseph Villaescusa says a mortgage is the most important investment in a family’s life. The type of mortgage a person takes out largely depends on their live-in expectations, such as the duration they plan on staying in a home, how much the down payment is, and a homeowner’s ability to pay off monthly payments. Regardless of the type of mortgage, loan interest rates are down and people holding off on buying homes are starting to purchase real estate at all-time lows with reduced mortgage rates.
The loan process, according to Joseph Villaescusa, is often challenging for first-time buyers. With good credit, the right company, and good information, the entire process is easy. First, however, potential homeowners should understand the basic differences between fixed and adjustable-rate mortgages (ARMs).
Fixed Loans: Fixed loans are good fits for home buyers with good credit who are planning on staying put for several years. With low fixed rates, people do not have to worry about market trends. Instead, they are able to budget out payments because they never change. They also have refinancing options if the market is down or they are able to take out a shorter-duration loan in order to build real estate equity.ARMs: Adjustable-rate mortgages vary in type based on the lender. A common type of ARM is a 5/1, or when a homeowner has reduced interest rates for five years and, in the sixth and every subsequent year, the interest changes based on the market. ARMs are great for families that plan on moving or selling their home after a few years or when the initial cycle is coming to a close. Typically, ARM interest rates are lower than fixed mortgages because they may either raise or lower based on current trends.
When it comes to a mortgage, families should pay as much as they comfortably can every month to reduce the amount of accrued interest. The bigger the loan and shorter the term the higher the payments are; though longer, 30-year fixed mortgage homeowners often pay off additional principal every month to cut down on long-term interest rates.
Joseph Villaescusa Goes In-Depth on Property Purchases
Joseph Villaescusa says home buyers should seek out professional help when investigating different types of mortgages and weigh their options. This is largely due to the fact that a buyer’s ability to make larger payments affects his or her buying power. With higher income and a good credit score, home seekers are able to buy more expensive homes. Often, buyers will get an evaluation of how much they can spend on a property before shopping around for a house.
First, however, buyers should understand what influences a home’s value. As mentioned, the general neighborhood has a lot to do with this, not to mention a city’s amenities, job market, educational system, and other infrastructures. The job market is a big one; buyers moving to a new city often do so because they got a transfer or are starting a new career. These economic hot spots are always in high demand. Job-heavy areas may also have higher costs of living, another factor buyers should take into consideration when budgeting for a home.
Next, Joseph Villaescusa says home buyers need to budget out how much they can spend. It is helpful to make a list of total income (or dual income) and subtract expenses like car payments and student loans from it. Living costs like food, entertainment, and spending money should also be deducted. What is left is usually a starter point when looking for a loan, as this will most likely go directly into monthly payments. Based on the amount, homeowners can choose mortgage options with different interest rates and terms.
It is also important — especially for first-time buyers — to enlist the help of a qualified real estate agent. Not only are professional agents like Joseph Villaescusa able to locate a perfect home for families, they are able to negotiate lower asking prices, file paperwork, and make sure everything goes off without a hitch during the buying process. Securing a loan, for example, is a difficult procedure, not to mention negotiating.
Negotiating prices is a skill at which real estate agents excel. Most charge a “commission” fee based on the buying price, though they are able to reduce the overall price of a home so that buyers actually pay less when all is said and done. Expert agents are also able to help buyers through the loan process and advise them on how much of a down payment to make on a home. At the end of the day, expert real estate agents like Joseph Villaescusa help potential homeowners save money and own the home they deserve.