- How much cash do I need to have on hand in order to obtain a loan?
- What is Private Mortgage Insurance?
- Can I rent out my condo/home as a vacation rental?
- Why should I use a Realtor to buy or sell my home, the internet does it all for me right?
- Why should I use a Realtor to manage my investment property?
- How much do the services of a real estate agent cost?
- What are some ways I can lower my home insurance costs?
- What kind of houses and condos are there in New Orleans?
- Where do I go to get information on New Orleans permits for renovations and more?
How much cash do I need to have on hand in order to obtain a loan?
The amount of cash that you need to close a real estate transaction all depends on your goals and financial position. The rule of thumb for a home purchase utilizing a conventional mortgage is to put 20% of the purchase price down. There are many different types of loan programs; VA loans allow the borrower to borrow 100% of the home value. First-time homebuyers often utilize FHA loan programs to take advantage of their low downpayment requirement. Both the VA and FHA loan products are government-insured loans and require a more scrutinized application and documentation process. How much money you “put down” varies depending on several factors:
- Will you be in this home at a minimum of 3-5 years? This is important to adhere to so that you can allow appreciation (hopefully) to pad your equity and cover the costs of acquiring and owning the home, i.e., discount points, closing costs, interest, repairs, etc.
- What is your debt to income ratio; if your income is very strong but you have little cash reserves, then it makes sense to put less money down. But be aware, when you put less than 20% of the loan in as a down payment, regardless of loan program, there will be fees (see “What is Private Mortgage Insurance?”) and potentially increases to your interest rate.
- Are you purchasing an investment property? If so, banks may require 25-30% down in order to obtain financing as it will not be your primary residence and will carry more risk for the bank.
What is Private Mortgage Insurance?
Private Mortgage Insurance, also known as PMI, is insurance that mortgage lenders and banks require from the borrower in the event the Loan to Value (LTV) of the home is more than 80% of the purchase price. In other words, if you buy a 200,000 home and put 10,000 down, your LTV is 90%, which will almost certainly require that you pay PMI until the LTV of 80/20 is reached. PMI can range in cost and duration depending upon size of the loan (price of the home), how much down, loan term, occupancy and credit score, but expect $200-$500 extra per month.
Can I rent out my condo/home as a vacation rental?
Yes, as long as you have the proper documentation (vacation rental permit from the City of New Orleans) and as long as your HOA (home owner’s association) allows it. This has been a hot topic in and around New Orleans as well as on the national stage. Feel free to contact us further about this, we are happy to look into the zoning and regulations for your home based on location.
Why should I use a Realtor to buy or sell my home, the internet does it all for me right?
It’s true, the internet has changed the way people are marketing and searching for real estate. What has also changed are all of the laws, procedures, dates, deadlines and disclosures that are required to buy or sell a home legally. Though real estate agents are not lawyers, we are experts in our field and know real estate law thoroughly. Finding a home you like online is as easy as pie today, but you still need to schedule the showing, negotiate the price, inspect the property, setup title insurance, home insurance, have the home appraised, acquire a loan and a myriad of other details and cpnsiderations in order to actually acquire the deed. Realtors are required to perform our duties under a strict Standard of Ethics which protects the public from erroneous misconduct.
Why should I use a Realtor to manage my investment property?
A knowledgeable and reliable property manager can add significant value to your property investment, which is why many property owners in New Orleans are using Korman Gerrity Realtors to manage their investment property. Here are a few ways that a good property manager can help with managing property:
Korman Gerrity Realtors generally find higher quality tenants for your property. This begins with a thorough screening process of prospective renters and more often than not results in tenants who pay on time, keep the property in better shape, and cause less problems than other tenants. Korman Gerrity Realtors are used to seeing applications and can identify the warning signs of scammers, those who have had problems in past rentals and so on. For more information check out our blog post on New Orleans Property Management.
How much do the services of a real estate agent cost?
Buyer’s Agent Fee: Generally FREE to the Buyer, with the Sellers paying the buyer’s agent commission. This is generally true throughout the nation but there is never a set commission and can vary dependent upon the transaction. Many commercial property buyers and tenants might pay their agent’s commission.
Seller’s Agent Fee: Variable; by law, there is no standardized commission structure so commissions will fluctuate depending upon the broker’s level of involvement, as well as what company policy dictates. Korman Gerrity Real Estate generally charges 6% of the sales price of our listings, half of which is shared with the Buyer’s agent who represents the buyers who close on the home. Often called a success fee, real estate agents rarely are paid unless the real estate sale is finalized.
Property Management Fees: Variable; by law there is no standardized commission structure so commission does fluctuate depending on the broker’s level of involvement as well as what company policy dictates. Korman Gerrity Real Estate generally charges 60% of the first months rent to find tenants and facilitate the signing of the lease and the exchange of the security deposit and first months rent, half of which is shared in the event that a cooperating broker is involved in the transaction. For full property management, which includes being the point of contact with tenants, the fee is normally represented as a percentage of total rent being collected. This fee is variable and really does depend on the level of broker’s involvement. If you’re interested in learning more contact a Korman Gerrity Realtor and we can evaluate your property management needs and set our fee.
What are some ways I can lower my home insurance costs?
The number one way home owners miss out on saving money on their homeowners’ insurance is not receiving the discounts and credits they deserve. This is a simple fix and only takes a few minutes of you answering some questions with the insurer about alarms, smoke detectors, a fenced yard, and whether you want to bundle your policy with auto, life, etc. Also, don’t be afraid to ask your insurer about any and all available discounts since not every discount is publicly advertised. Things such as updating a HVAC system or putting storm shutters on the windows could gain you a valuable discount. For more information check our our blog post on Saving Money on Homeowners Insurance.
What kind of houses and condos are there in New Orleans?
New Orleans is known for their spicy Cajun cooking and smooth Jazz, but one might be surprised with the architectural treasures that abide here. All you have to do is take a walk through one of the city’s unique neighborhoods where you will find a myriad of styles, including creole cottages and townhouses, raised cottages, and shotgun and double gallery houses. Click here for our full post on the types of housing available in New Orleans.
“Where do I go to get information on New Orleans permits for renovations and more?
As homeowners, there are certain things we are aware of and others that we are not. For instance, if you are planting a tree that may impede on someone else’s property, did you know that in the City of New Orleans you must obtain a permit? Are you looking to hang a sign or obtain a permit for residential parking? Then yes you must obtain a permit. This might seem very daunting at first to determine what permits you do and don’t need. However, the City of New Orleans has a great website that answers all of your questions concerning permits. It can be found at http://www.nola.gov/onestop/. For more information from our blog, check out our post on acquiring permits in New Orleans.