American Mortgage Resource, Inc.

Providing the Best Financial Resources for Boston and Massachusetts

Responsibilities of Being a Landlord

Becoming a landlord is an investment that will bring in another stream of income as you rent out your property to eager tenants. However, it also comes with a multitude of responsibilities that you are legally obligated to commit to. Your top priority is to provide a reasonable and safe living space that includes security and maintenance. If you’re interested in becoming a landlord, continue reading to learn more.

Provide a Habitable Living Space

As landlord, you must ensure that your tenants have access to a clean and comfortable living space. Depending on local laws, you are obligated to maintain the property and keep it up to standards. This includes:

  • Ensuring all structural elements are safe and intact.
  • Keeping the plumbing, electrical, heating, and ventilation in good working order.
  • Supplying trash cans and dumpsters.
  • Eliminating any vermin or infestation.
  • Following safety codes and disclosing any history of hazards such as asbestos, lead paint, bed bugs, etc.
  • Maintaining any common areas.

Ensure a Quiet Living Environment

It’s best to foster a peaceful community so all tenants can enjoy their residence without conflicts. Landlords should consider specifying in their lease that tenants should maintain a reasonable noise level so others are not disrupted. This will increase your reputation as an amicable place to live and attract more renters. 

Maintain Tenant Safety

Maintaining safety is one of your most important responsibilities as a landlord. You are obligated to ensure all tenants are safe and that your property is well-monitored. The legal requirements may vary depending on the local law but regardless of where you live, here are some things to take into account:

  • Double check all locks on doors, windows, and garages. Remember to rekey or replace locks after an old tenant moves out.
  • Ensure common areas such as the parking lots are well-lit and monitored with cameras.
  • Make sure all units have functioning smoke and carbon monoxide detectors. Other safety and rescue equipment like fire extinguishers must also be easily accessible.
  • Supervise hired personnel such as contractors, plumbers, electricians, etc.

Perform Repairs and Maintenance

Landlords must respond to any issues that may impact a tenant’s quality of life. Urgent repairs for electricity, plumbing, mold, and so on should be addressed as soon as possible. For most major issues, you should respond within 24 hours of the complaint. Response times can vary for lesser concerns but its best to handle it quickly to prevent further damage. Another thing to remember is that unless it’s an emergency, landlords should notify tenants ahead of time before entering the rental property and should only visit during reasonable day time hours.

Track the Unit Conditions

When tenants move out, landlords are responsible for repairing anything that is considered normal wear and tear such as repainting scuffed walls, replacing damaged carpets, repairing loose or worn hardware, and more. Keeping a checklist of the unit’s condition when a tenant moves in and out can help keep track of things to review. Landlords can also collect a security deposit to cover any damage exceeding normal wear and tear.

Conclusion

There are many things landlords are responsible for and local laws can have additional things to keep track of. If you’re ready to become a landlord and you’re considering a second property to rent out, consult with American Mortgage Resource, Inc. Over the years, we have helped numerous homebuyers and homeowners with their mortgage and financing options. Learn more by visiting our website and schedule an appointment with an expert today.

How Do Fixed-Rate and Adjustable-Rate Mortgages Work?

When talking to a lender, there are two basic type of mortgages they will offer you. These are called fixed-rate and adjustable-rate mortgages. For most homeowners, fixed-rate loans are preferable if they plan to live in the home for an extended time. However, adjustable-rate mortgages are also offered for those who want lower interest rates with a shorter loan term. Keep reading to learn more about these two mortgage loans and see which one is right for you.

Fixed-Rate Mortgage

As this loan implies, the rate for the mortgage is fixed, meaning that it does not change for the life of the loan. Likewise, the monthly payment remains the same too. Repayment of a loan can range from 30 years to shorter lengths of 10-20 years. If you do choose a short loan term, understand that you will have larger monthly payments, but lower total interest costs over time. On the hand, a longer loan term with lower monthly payments is a more desirable option for committed buyers.

Adjustable-Rate Mortgage

If you plan to live in your home for a few years, then an adjustable-rate mortgage, or ARM, may be more suitable for you. Since the monthly payment is not set, it will change over the life of the loan. Rates for the loan will also fluctuate, although there is usually a limit on how much it will go up or down. “Lenders often offer lower interest rates for the first few years of an ARM, sometimes called a teaser rate, but rates can change after that– as often as once a year. The initial interest rate on an ARM tends to be significantly lower than that on a fixed-rate mortgage.”

Conclusion

Before making a big decision on a mortgage loan, make sure you are informed first. At American Mortgage Resource Inc., we offer the lowest competitive mortgage rates in Waltham, MA and surrounding areas. Let us help you choose the right home loan by contacting us at (617) 972-8588. You can also find more information on our website visitamr.com. Call today!

Condo vs. Townhouse

Condos and townhomes can offer many comforts and homely characteristics that traditional homes offer, if not more! Many families, couples, and individuals choose to buy and rent these types of homes for their appealing amenities accompanied by their smaller price tags. In this month’s blog, we break down the major differences and similarities between condos and townhomes so that you may discover which is the right choice for you!

Similarities

Both condos and townhomes are attached homes, meaning they share one or more walls with a neighbor. Despite ownership of the home, many of these communities are run by a home owners association (HOA) made up of other residents. HOAs almost always charge their residents a monthly fee to cover the upkeep of landscaping, pools, fitness centers, and common areas.

These homes typically have less square footage and outdoor space than detached single family homes do and can be anywhere from one to three stories tall. The resale value of these spaces largely depend upon how well the HOA manages the property as well as how well the owner upkeeps their individual home.

Notable Differences

There are several notable differences to consider when comparing condos and townhomes, most of them regarding their physical build. Townhomes are built on land that the owner purchases with the home whereas condos are more like apartments and no land ownership is involved.

When you purchase a condo, you personally own your individual unit and share joint ownership of the building with the other owner-tenants. That joint ownership includes not just the building structure itself, but its common areas, such as the gym, pool, and grounds, as well as the airspace. Some condos may resemble townhomes but unless the land is also owned by the homeowner it’s still technically a condo.

Final Thoughts

There are so many decisions to make when buying a home from location and price to size and available amenities. Regardless if you want a traditional detached home or a condo, it’s crucial to never buy more home than you can afford! This reason is often what makes condos and townhomes such great choices for first-time homebuyers or anybody shopping for a home on a smaller budget. Head to our website or contact our team directly at (617) 972-8588 for local brokerage and mortgage services you can count on every time!

Pros and Cons of Buying a Second Home

Many people dream of owning a second property, whether it be a beachfront vacation home or a home in the mountains. A second home can also be rented out and used as another source of income. Regardless of the reason, investing in real estate can be a costly and time-consuming endeavor and there are any considerations to take into account. In this month’s blog, we list the pros and cons of buying a second home.

Things to Consider

So why do people bother investing in a second home in the first place? As mentioned, many people look for a second home to use as a vacation house in another state or country. It makes personal vacations easy and is a great spot for family and friends to gather. Others may look into a second property to lease out to renters in the area and have another stream of income.

However, a very important thing to consider is to make sure you can actually afford another home. There are many costs associated with it and you should evaluate your financial situation beforehand, such as any debts, retirement funds, college savings for your children, and so on. Once you’re sure you have the financial means and budget to purchase a second home, it’s time to weigh the pros and cons.

Pros

There are many advantages when it comes to owning a second home. Here are some benefits:

  • You can use it however and whenever you like.
  • If you’re using it as a vacation home, you can travel light and don’t have to worry about booking a hotel.
  • You can lend it to friends and family.
  • You can rent it out for extra income and use it to cover ownership costs.
  • It can give you tax benefits such as deductions for any rental-related expenses.
  • It will be an asset that can have positive capital appreciation, or an increase in its value.
  • You can retire there.

Cons

Of course there are some downsides and considerations that you have to take into account. Buying a second home is a very important decision that you should think through, especially when it comes to costs and the time you need to put into it. Here are some cons:

  • Second homes are expensive and are very costly. Other than mortgage payments there will be property taxes, insurance premiums, utilities, and other maintenance fees including repairs and renovations.
  • The distance may be a problem and can be a hassle to travel there if you need to handle maintenance or any issues.
  • Unless you hire a property manager, you will be responsible for maintaining the home. This includes things like yard work, house cleaning, scheduling appointments with contractors and maintenance workers, etc.
  • Depending on the housing market, it can be difficult to sell it later on.
  • You may also have difficulty finding renters and can lose out on rental income.
  • Some people may experience staleness with their vacation home location.

Learn More

Investing in another property should be considered carefully with the pros and cons in mind. If you’re ready to make the decision to buy second home, you’ll have to decide how you will finance it. Here at American Mortgage Resource, Inc., our professionals can help you decide on the best loan options and what to do moving forward. We offer mortgage consultation to homeowners and home buyers in Boston, MA and the surrounding areas. Learn more by visiting our website or make an appointment with an expert today.

Home Loans and Fixer Uppers

There are countless reasons why fixing up old homes has turned into one of the most colossal real estate trends over the past decade. While it seems everyone talks about fixing up an old home one day, not many people are speaking about what it’s like to finance such a project. Fixer upper loans combine the purchase or refinance of a property with the cost of renovating it. This unique mortgage option addresses the challenge buyers often face when figuring out how to finance a fixer upper. Follow along below as we discuss why you should invest in a fixer upper and what loan options may be available to you.

Reasons to Purchase a Fixer Upper

  • You can build the custom home of your dreams
  • You can flip it for a profit
  • It’s typically cheaper than purchasing a newer home
  • There’s less competition when purchasing it
  • You fell in love with the property or neighborhood, but not the home itself

Loan Options

  • FHA 203(k) Loan – This government backed loan will require that you to adhere to FHA guidelines and limitations when completing renovations. In some cases this loan will not allow for much DIY work, as the government will require that licensed contractors complete most major tasks.
  • VA Renovation Loan – Some eligible service members, veterans and qualifying spouses can use this loan to combine a VA purchase loan or VA cash-out refinance with their renovation costs. Other major advantages of this option include not having to pay a down payment or any closing costs on the property at the time of purchase. In some cases the VA accommodates a higher purchase price based on the home’s expected value once renovations are complete
  • HomeStyle Loan – Referred to as a Fannie Mae convention loan, a HomeStyle loan is a fixer upper loan similar to a FHA 203(k) loan, but with increased limits for borrowers. Due to the fact that this is a conventional rehab loan, homebuyers finance their home directly with private banks or mortgage companies that offer this product, and Fannie Mae purchases the loans from lenders.
  • CHOICERenovation loan – Also dubbed the Freddie Mac loan, CHOICERenovation can be used to finance a fixer upper project through traditional means in conjunction with the refinancing of a separate existing property. This option is great for those who plan on purchasing the fixer upper as a second home or as an investment property.

Final Thoughts

Before you commit to spending your free time renovating a fixer upper, make sure you know exactly what to expect throughout the process financially. For free and honest advice from the pros, contact the team at American Mortgage Resource, Inc. in Boston, MA. Visit our website to learn more about the loans we offer or contact our team directly Monday – Saturday at (617) 972-8588.

Housing Indicators to Sell or Rent Your Home

When the times comes to move on from your current property, you may be left wondering: “should I sell or rent my house”? While putting up your property for sale on the market may be the most common choice, you can also rent it out as another stream of income. It’s best to watch out for housing indicators to aide in your decision. Learn more about the four housing indicators you should watch out for when it comes to selling or renting your home in this month’s blog.

Are home sales high?

Home sales indicate how much competition there is for homes on the market. If home sales are high, then that means more buyers are moving into the area and are competing for real estate. You’re more likely to get a higher selling price if you sell your home while home sales are high.

This is the opposite when home sales are lower and on the decline. In this case, fewer buyers are moving into the area which means there is less competition and buyers have more choices. With lower sales, consider renting out your property and then selling it when home sales increase again.

Are home prices on the rise?

Knowing the average selling prices of homes can help you determine if selling or renting your home will be profitable. High home prices are good for both leasing and selling your home and you’ll be able to secure a higher selling price. You’ll also be able to charge more rent since more people will be moving into the area and there are fewer homes available.

How is the housing supply?

Understanding the competition for real estate in your area is key in determining when to sell or rent. Housing supply indexes let you know how many vacant home are available for sale in your area and are strongly correlated with price. If the housing supply goes down, this indicates that there is more competition for real estate – which in turn drives up the property prices. When the housing supply is low, you may want to consider putting up your home for sale to quickly attract potential buyers.

If there is a high housing supply or there are many vacant homes available for sale, then that indicates there are most likely fewer buyers looking for a home. You’re less likely to profit from a high selling price in this case. You may want to consider renting your home until the home supply in your area lowers.

How affordable is the rent?

Rental affordability refers to the percentage of an average family’s income that goes towards paying rent. Low rental affordability means you can attract more tenants if you decide to rent out your home. However, you may be limited in how much you can charge for rent.

High rental affordability means that the rental property in your area is more expensive. This can be tricky for landlords because although you’ll profit more in collecting rent each month, you’ll most likely have trouble finding tenants who can afford it.

Conclusion

Overall, renting makes more sense if you owe more on the property than you can sell it for and if the housing market is currently weak in your area. On the other hand, selling your home is best when there is a high demand for homes due to more buyers wanting to move into the area. If you want to make profit, you’ll need to crunch those numbers while keeping an eye out on the current housing market.

To learn more about the housing market and for more mortgage advice and information, visit American Mortgage Resource, Inc. We provide the best financial resources in Massachusetts and our team is here to help you with all of your mortgage and home loan needs.

Using a Comparative Market Analysis (CMA)

When it comes to selling your home, knowing its value can help you gauge how to price it effectively on the market. Comparative Market Analysis (CMA) reports can help with this by allowing you to compare your property to other properties recently sold within the area. Comparables have similar square footage, age, conditions, upgrades, and locations. A CMA can be generated with the help of a real estate agent and can act as an informal appraisal before you make things official. Interested in getting a CMA for your property? Continue reading to learn more about the data generated in a CMA and how to understand it.

Data found in a CMA

CMA reports can vary in length and complexity depending on the market and the real estate agent’s business practices. Generally, the type of data found in a CMA includes:

  • Active listings – Homes that are currently for sale.
  • Pending listings – Formerly active listings that have not closed yet and are in a pending sale.
  • Sold Listings – Homes that have been sold within the past 3 months. These are your comparable sales that will be used when appraising your home’s value. If there are not enough sales within the past 3 months, then comps within the past 6 months can be used.
  • Expired Listings – Properties that were not sold. This can be due to a number of reasons such as being unreasonably priced, not being marketed, or it was in need of repairs.
  • Withdrawn/Cancelled Listings – Properties that were taken off of the market for a variety of reasons. These were also most likely too expensive. In general, expired and withdrawn listings have the highest median prices which made them undesirable along with other potential factors.

Understanding the CMA Report 

Now that you understand the type of data found in a CMA report, it’s time to understand how to use the actual report to your benefit. Once your real estate agent has generated it, look at each comparable and see how it matches to your property. Each comparable listing will include a description, floor plan, number of rooms and bathrooms, square footage, sales price, any dollar adjustments, and the fair market value.

There will be at least 3 to 5 comparables to analyze and this will help you appraise the value of your home. However, a consideration to be aware of is that there may be a difference in value if there were any upgrades or amenities involved. For example, a comp may be very similar to your property but if their property was completely renovated rather than fixed-up, then the value will be much higher than yours. Another consideration would be the property location which can also play a major role in its value. 

Learn More

Overall, a CMA will allow you to set a competitive listing based on the average price the comps were sold at. American Mortgage Resource, Inc. is the premier choice when it comes to loans and mortgage advice. Visit our website to learn more or call (617) 972-8588 to speak with an expert.

How to Tap Into Your Home Equity

Are you feeling strapped for cash and unable to expense the high priority responsibilities in your life? In this month’s blog, we outline several convenient and accessible remedies for this common concern and how homeowners can determine which option is best for them based upon their individual circumstances.  

Home Equity Loan

A home equity loan, also called a second mortgage, is a fixed or adjustable rate loan that is secured by the equity in your home. With a home equity loan you borrow a lump sum of money to be paid back monthly over a set time frame, much like your first mortgage. The process for a home equity loan is similar to a first mortgage except the closing costs are usually lower and, although the interest rate is higher on a home equity loan, the interest paid is tax deductible.

Refinance

Refinancing is the replacement of an existing debt obligation with another debt obligation under different terms. With interest rates as low as they currently are, refinancing today can grant homeowners the opportunity to lower their monthly mortgage payment more than they could’ve imagined possible. When refinancing it’s crucial to lock in a low, fixed-rate loan rather than an adjustable rate loan to ensure the monthly payment will not increase over time.   

Home Equity Line of Credit (HELOC)

A home equity line of credit is a line of credit backed by the equity of the home and gives homeowners a revolving credit line for that amount.  With these loans you only have to pay interest on the money you actually withdraw, but should feel confident in being able to repay that entire balance by the time the repayment period expires as per the terms.

Which Option is Best for You?

Determining the best way to tap into your home equity depends mostly on what you want to do with the money. If you’re needing to pay off a major expense all at once such as a debt consolidation, college, or medical bills, then a home equity loan is most likely your best option. To qualify for this typically your credit must be in good standing, you must be able to document your income, and you will need to have your home appraised to determine its current market value.

Refinancing is optimal for those who have at least 20% equity in their home and are seeking lower monthly payments or shorter loan terms. The best time to refinance is when interest rates drop, credit scores improve, or when annual income significantly increases.

Those looking to use their equity to expense a prolonged activity such as a major home renovation or building a business will need cash more sporadically, meaning a HELOC would be most suitable. These loans can be very cost efficient as they have lower interest rates and are free of closing costs. HELOCs are typically granted to those who have at least 15%-20% equity in their home, are in good credit standing, and have a low debt-to-income ratio.

Final Thoughts

Tapping into your home’s equity can be confusing and tough to navigate, but with help from the right lenders can be the most rewarding and money savvy decision you’ve ever made! American Mortgage Resource is recognized as one of the top brokers in Massachusetts, with reliability and professionalism at the forefront of their values. Visit our website or contact the team directly at (617) 972-8588 to discover the best way for you to finally tap into your homes equity for good!

Is It A Good Idea To Use Your 401(K) To Buy A House?

401(k) Rules

A 401(k) account is usually used to save up for retirement and that’s why investors get tax breaks for holding it. Due to its benefits, the government strictly regulates and limits access to these funds. If you are not of the required age to withdraw funds, you will be charged a 10% early withdrawal penalty on the amount taken. Also, there will be an additional regular income tax on the amount withdrawn. So if you decide to use the funds to purchase a home, you can either borrow from your 401(k) or withdraw from it.

401(k) Loans

Most people who take money out of their 401(k) account prefer to borrow from it because it does not have an early withdrawal fee or income tax. However, you have to pay it back with interest.  The repayment plan is administrated by the plan provider and the max loan term is up to five years. 

However, these repayments are not treated the same as ordinary contributions. There are no tax breaks, employer matches, and reduction of taxable income. Also, you can only take out 50,000 dollars or less.

401(k) Withdrawal

Not every plan offers 401(k) loans and if that is the case, then you have to withdraw from your account. This is called a hardship withdrawal, which results in a 10% penalty. It’s best to withdraw what you need so that you won’t have to pay it back.

Disadvantages of 401(k)s

Whatever you choose, taking out your 401(k) affects your retirement savings. You lose potential growth and won’t have as much money in the future. Diminishing your savings will mess up the amount of money that you saved up.

Conclusion

Trying to find a way to get money to buy a house can be difficult. Some people take out their 401(k) savings to purchase a home, but there are other options too. If you don’t want to make money from your retirement funds, it would be beneficial to take out a mortgage loan. At American Mortgage Resource, Inc., we offer many different mortgage loans for home buyers. Check out our website for more information.

Tips for Selling Your House

As much as everyone wants it to be, selling your property is not a simple and quick endeavor. Listing your house and finding a qualified buyer can be a long and tedious process. Your house may also stay on the market for longer than expected depending on the pricing and location. However, there are a few factors within your control that can help with selling your former home. In this month’s blog, we will discuss a few tips to help with the selling process and help your house be more appealing to prospective buyers.

Hire the Right Agent

Hiring a real estate agent who knows the market can be very beneficial in selling your house. Some homeowners may be hesitant in hiring an agent because they want to save on the cost of paying real estate commission. However, an agent will be able to expose your listing to a much broader audience and can negotiate on your behalf. You can sell your house by yourself of course, but it can be a very stressful process as a result. You would have to deal with personally managing the property, marketing the listing, reviewing offers, and handling all negotiations and closing details. A good agent will relieve you of a lot of stress so you can focus on other things.

Spruce Up Your House

When you’ve made the decision to move forward with selling your house, it’s time to focus on its marketability and appeal. Thoroughly inspect the house and identify areas that need to be fixed or renovated. Perhaps your walls need a fresh coat of paint or the carpet needs to be replaced. Don’t forget to inspect the exterior and landscape of your property as well. This is an important process because you want your house to have a good curb appeal and be enticing as possible to potential buyers.

However, don’t waste your money on needless upgrades unless the new additions will have a high return on investment. If your house is in good condition, it wouldn’t make sense to do a full renovation if its costliness will cause you to lose money on the sale. In general, making updates to the kitchen and bathrooms can be more beneficial, such as replacing your old cabinets and sinks for something more modern.

Market Your Property

Having online listings with clear photos of your property can greatly boost interest and gather more attention. The value of professional photography should not be overlooked because the photos of your home could be someone’s first impression. Make sure to add well-written and informative descriptions of your property to garner more interest. Online buyers want to know as much as possible before they decide to spend time visiting and touring your property and neighborhood.

Creating a 3D virtual tour is also another option that allows online buyers to tour your house. They are efficient because unlike in-person showings, 3D tours are available 24/7 and can be accessed at any time.

Set a Competitive Price

Give yourself room for negotiation but also keep it realistic. A common mistake that sellers make is overpricing their property and then reducing the price the longer it stays on the market. Multiple price reductions can also give the impression that something may be wrong with your house. You don’t want to underestimate your house’s value either because that will cost you. Instead, take references from a real estate comparable, which is a similar home that has been recently sold in the area or market you’re looking to sell in. This will inform you of average prices other homes comparable to yours are selling for and help you set a competitive, yet reasonable price.

Conclusion

As you can see, there are many moving parts to selling your home. We hope these tips help first-time home sellers find the best deal possible. If you’re selling your property and you’re looking for a new house, rely on American Mortgage Resource, Inc. for expert advice and help. Learn more about our services by visiting our website or contact our team at (617) 972-8588.

« Older posts