Kevin P. Nguyen

Equity Zone Mortgage-Elk Grove, California

Escrow And Your Mortgage: The Most Important Points To Know

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Escrow And Your Mortgage: The Most Important Points To KnowThere are many complicated terms thrown around regarding your mortgage, and one of them is an escrow account. You will probably hear that your lender will collect some additional money every month for escrow payments. If you take a look at your mortgage statement, you will see your interest, your principal, and your escrow. What does this mean, and why do you have to pay additional money that isn’t going toward the balance of your loan?

The Definition Of An Escrow Account

An escrow account is an extra account that your lender opens on your behalf to make sure certain expenses are covered. Because your mortgage investor has a lien against the property, the mortgage company has an interest in making sure your property does not fall into foreclosure. That means that you need to stay on top of all of your expenses, including those beyond your mortgage. 

What Escrow Accounts Will Cover

Generally, your mortgage company will open an escrow account that is used to cover your home insurance premium and your real estate taxes. Generally, real estate taxes and home insurance premiums are only billed once per year. If you get a large bill for several thousand dollars, you might not be able to cover it. If you don’t pay your real estate taxes, the government could foreclose on your house. Instead of asking you to pay thousands of dollars at once, your mortgage company will open an escrow account for you, collecting small amounts of money every month to make sure you stay up to date on your home insurance taxes and premiums.

How The Balance In Your Escrow Account Is Determined

If your mortgage company is collecting additional money every month, that means there is less money for you to spend. Therefore, your mortgage company is careful only to collect as much money as required. Your escrow account balance is determined by your property taxes and insurance premiums. During an annual escrow review, your mortgage company will see if the account has a surplus balance. If it does, you will get a refund for the surplus balance. Keep in mind that if your real estate taxes or insurance premiums go up, your mortgage company may collect more money in the future. 

The Right (And Wrong) Reasons To Buy A House

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The Right (And Wrong) Reasons To Buy A HouseThere are many people who dream of owning a home, but you need to purchase your home for the right reasons. Simply purchasing a house because other people are doing so is not a strong reason to make such an expensive purchase. What are some of the reasons why you should purchase a house? What are some examples of bad reasons to buy a home?

The Right Reasons To Buy A Home

There are several strong reasons why you should consider purchasing property. If you have children, you may want them to attend a specific school. Therefore, you might be interested in purchasing a house in that school district. If you plan on being in a house for several years, you may be able to financially justify this purchase.

You may also want to purchase a house because you have relatives who want to move in with you. For example, many people like to take care of their parents as they get older. If you believe you can keep your parents out of an assisted living center by allowing them to move in with you, purchasing a house might be a smart move.

The Wrong Reasons To Buy A Home

On the other hand, there are wrong reasons to purchase a house as well. For example, if you believe you should purchase a house because the value of a home is always going to go up, that is not necessarily the case. Just like other financial markets, the real estate market can rise and fall, and there is no guarantee that your house is going to go up in value.

You should also try to avoid purchasing a house just because you feel guilty about renting. If you feel like you are approaching the home purchase process with some misgivings, you need to pause and think twice. Just because you are tired of renting doesn’t mean you should purchase a house.

Think Carefully Before Making A Decision

Purchasing a house is a big decision, and you need to review the benefits and drawbacks carefully before you decide to move forward. Do not hesitate to reach out to an expert who can help you figure out if purchasing a house is right for you. 

 

How Can You Increase The Safety And Functionality Of Your Home?

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How Can You Increase The Safety And Functionality Of Your Home?What do you need to do if you want to improve the safety and functionality of your home? You may not think that your home has a lot of safety hazards, but you might be surprised at how many people get hurt at home every year. Particularly if you have older people in your home, or if you have people in your house with disabilities, you need to pay close attention to your safety and functionality. What are a few tips you should keep in mind? 

Target The Lights In Your Home

If you have an older home, it may have incandescent light bulbs in it. Pay attention to the lights in your home, and make sure they maximize the light in every room. If the bulbs are too dim, it may be a challenge for you to see where you are going, particularly when the sun goes down. Consider swapping out the lights for LED light bulbs. You can not only make it easier to see but also reduce your electricity bills.

Remove Trip Hazards

You should also try to remove trip hazards from your home. Falls are one of the most common reasons why people get hurt, so try to remove objects that you might trip over. For example, if you have area rugs, you may want to tuck the tassels underneath. That way, you have a much lower chance of tripping on them.

Install Grab Bars In The Bathroom

You may also want to consider installing some grab bars in the bathroom. Bathroom floors can get wet, making it easier for people to slip and fall. This is particularly true in the shower and bathroom. By installing some grab bars, you have an extra way to stabilize yourself when you are bathing. This can reduce your chances of falling and striking your head, shoulder, or hip.

Make Your Home Safer And More Functional With These Tips

From time to time, you should do a comprehensive evaluation of your home to see how you can improve your house’s safety and functionality. This can make a significant difference in the value of your home while also reducing the chances of someone falling and getting hurt. 

 

Closing Costs And A Cash Sale: Who Pays?

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Closing Costs And A Cash Sale: Who Pays?There are some people who are able to pay cash for a home. Typically, these are individuals who are selling an existing property that has gone up in value. Now, all of a sudden, they have a lot of extra money they can spend on a house. If you can pay cash for a home, you have a lot of extra negotiating power. When it is time to complete the sale, who pays?

What Is Included In Closing Costs?

Before deciding who pays closing expenses, it is important to take a look at what is included. Because you do not have to worry about going through a lender, you can avoid many of the fees associated with the process of buying a home. Examples include origination fees, processing fees, credit checks, and mortgage points.

On the other hand, there are several other expenses you might have to cover. For example, you will have to put down some earnest money, and you might have to pay for a property inspection and appraisal. You should also pay for title insurance and a title search. There are some states that require you to work with an attorney, and you may have to pay attorney’s fees as well. Finally, you might also be responsible for notary expenses and certain escrow fees. Keep in mind that these expenses can vary from state to state. 

Who Pays For These Costs?

Because there are still several expenses you need to pay, you will need to work with the seller to decide who was responsible for them. In a lot of situations, these costs are the responsibility of the buyer. 

At the same time, it is a matter up for debate. If you believe you have a lot of negotiating power, you might be able to convince the seller to pay for these expenses. For example, if the house has been on the market for a long time and the seller does not have any other offers, you might convince the seller to cover your closing expenses. You may want to work with a real estate agent who can help you figure out if you can convince the seller to cover these expenses. 

The Top Reasons To Pay Off Your Mortgage Before You Retire

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The Top Reasons To Pay Off Your Mortgage Before You RetireAs you get closer to your retirement age, you should try to discharge as much of your debt as possible. Unfortunately, many people close to the age of retirement still have a significant mortgage balance they need to pay off. What are some of the top reasons why you should pay off your mortgage before you retire?

Your Portfolio Might Not Generate As Much Interest

You may have a very low rate on your mortgage, which means that your money is better served in the stock market; however, as you approach the age of retirement, your portfolio might not generate as much interest because you are shifting more of your assets into less risky investments. As a result, you might want to pay down your mortgage faster, as the interest rate between your mortgage and your portfolio is no longer as large.

Free Up More Cash

You should also try to pay off your mortgage because you will free up more cash. You want to enjoy your golden years, but if you are still spending thousands of dollars every month paying off your mortgage, your money will not go as far. You may not be ready to tap into those retirement accounts just yet, so you can generate more cash by paying off your mortgage now. Try to pay off your mortgage before you retire to maximize your golden years.

Tap Into Your Home Equity Later

Do not forget that your house can also be a very important retirement asset. If you are concerned about running out of money and your retirement account, you can tap into your home equity as an extra source of cash; however, what if you still have a mortgage on your house? You might not have as much equity to use. While you are still making money now, you should try to pay off your mortgage.

Pay Off Your Mortgage Before You Retire

Clearly, there are a lot of reasons why you should try to pay off your mortgage before you retire. When you retire, your income may drop significantly, so you should try to pay off your mortgage while you still have the flexibility to do so right now. 

 

What Do You Need To Know About Home Improvement Loans?

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What Do You Need To Know About Home Improvement Loans?Do you want to make some improvements to your house? Home improvements are a great way to make your home more functional, and can also add value to your home. At the same time, performing a home improvement project can be expensive, and that is where a home improvement loan can be helpful. What do you need to know about them?

The Eligibility Requirements

First, just like applying for a mortgage, there are eligibility criteria that you need to meet. The criteria can vary from lender to lender, so you need to talk to your lender to figure out what their requirements are. Some of the requirements include your income, assets, age, credit score, and equity in your home. Keep in mind that whether you are salaried or self-employed can also impact whether you can qualify for a home improvement loan.

The Loan Amount

You should also think about the total amount of money you have to borrow. Usually, you are given a maximum amount of money you are allowed to borrow based on many of the factors listed above. In general, your loan amount cannot exceed a specific loan-to-value (LTV) ratio based on the equity in your home. If you have a specific amount of money you have to borrow to complete your home improvement project, you should talk about this with the lender.

The Interest Rate

It is not unusual for the interest rate on a home improvement loan to be slightly higher than a typical mortgage. On the other hand, there are options where you can collateralize the home improvement loan to get a better interest rate. You may want to talk with the lender about your options to make sure you get as low of an interest rate as possible. It could save you thousands of dollars over the life of the loan.

Talk About Your Options With A Lender

In the end, these are just a few of the most important points you need to keep in mind if you are interested in taking out a home improvement loan. There are plenty of options available, so be sure to review the benefits and drawbacks of each option with your lender.