We want to sell our house and apply some of the profit to purchasing a larger house. Do we talk to our Realtor® or should we discuss this with a lending institution?
Serving as your Realtor it would be my responsibility to provide your family with a wide range of services, including financial information. This information includes calculating your current home equity-the difference between the value of your house and the balance of your mortgage. This is a part of a comprehensive market analysis I use to initially determine your "profit" after the sale of a house. Pricing is an important part of selling the property. This includes-but is not limited to-knowing the selling prices of houses in your area. With this financial analysis we can discuss the future plan of buying a larger house. You would have a good idea of what you could use for a down payment. Also, we could determine a reasonable mortgage payment based on the monthly family income and your long term goals.
I understand the role of the down payment in financing a mortgage, but what is "earnest" money and who gets it?
Earnest money is the initial cash deposit given by the purchaser to the seller as a sign of good faith. It is held by a third party, usually a real estate agency, in an escrow account. It is later credited toward the purchase price of the home. The amount of the earnest money that a purchaser and seller decide on is negotiable. Earnest money is expected to compensate the seller if the buyer defaults on the contract. There is no specific rule requiring a certain percentage of purchase price (unless the seller stipulates such) but the normal range is anywhere from $100 to 5-10 percent of the purchase price.
When selling a house with plans to immediately buy another, is it best to sell first and buy later?
The selling/buying plan requires a kind of "juggling act". If you sell first, you are certain about your equity and profits from the sale, but you may need interim housing which is difficult to find here. The trick is to weave the two plans together for a seamless transaction - please call and we can discuss several options you have.
Can a few percentage points of interest really make a difference on a 30-year mortgage loan?
It really can! Stop in sometime and I'll show you what the difference can be. Many people never even explore the options on paying "points", money at closing to reduce the interest rate. This can even be used as part of negotiating on a price. It's not just the actual price offered, there are many parts to a contract such as financing, closing, earnest money, possession, etc. With me on your side, I can offer you many options to choose from.
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