Questions and Answers

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Choosing Between a Fixed-Rate Loan and an Adjustable-Rate Loan

Posted by Nestlewood Realty on August 01, 2019  /  in Blog, Home Buyers, Home Buyers, Questions and Answers, Questions and Answers, Realtors, Uncategorized  /  Comments off

Should I get a fixed-rate loan or an adjustable-rate loan?

You’re excited to find the perfect home that fits your lifestyle, family, and aesthetic, but the hardest part of the home-finding process is the home-buying process. To make your journey to your new home easier, we want to break down two of the most popular loan types and help you find which is best for you.

Two of the most popular loan types are fixed-rate loans and adjustable-rate loans. Fixed-rate loans have the same interest rate locked in for the life of the loan. Adjustable-rate loans lock in an introductory interest rate for the first few years and they can fluctuate depending on outside factors throughout the life of the loan.

So which one is right for you?

adjustable-rate loan

If you have the income to support unpredictable changes, you could end up saving money with your adjustable-rate loan if your interest rate drops. However, if your interest rate goes up, so will your monthly payment.

If paying more than you can afford doesn’t sound like something you’re willing or able to do, a fixed-rate loan might be the safer bet because an adjustable-rate loan will fluctuate. With a fixed-rate loan, monthly payments will not change due to fluctuating interest rates and you can easily budget for your monthly bill.

There is also safety in knowing you can refinance your fixed-rate loan in the future. The value of your home, your credit score, accumulating too much debt and losing some of your income can affect whether or not you are able to refinance an adjustable-rate loan. If your home value drops too much or your credit score takes a hit, you may be denied the ability to refinance for a lower interest rate. (This was part of the cause of the mortgage crisis of 2008-2009!)

But be careful, you have to pay for safety. Fixed-rate loans typically start out with higher interest rates than variable-rate (or adjustable-rate) loans. For example, the rate on a fixed-rate mortgage might be one or two percent higher than the rate on an adjustable-rate mortgage (ARM). That difference can make a dramatic change in your monthly payment.

If you know you are going to move before your ARM adjusts, then getting an ARM makes sense. The number one reason Millenials and Generation Z moves is a change of employment with an increase in pay. Millennial job habits commonly include changing jobs within two years. With mobility being a growing trend, then having a long-term, fixed-rate loan may not be desirable. The key is to not catch yourself in a buyer’s market with home prices on the decline. You may end up being forced to sell for a lower price than you would want, due to your need to move.

At the same time, fixed-rate loans are available in a variety of yearly terms and the shorter the term of your loan, the lower the interest rate will be. This means you’ll end up paying less in interest altogether and you will build equity and own your home sooner. But remember: The shorter the loan period is, the higher the monthly payments will be.

A standard 30-year fixed rate mortgage is traditionally the most common way to buy a home. But the Washington Post reported that more homebuyers are turning to adjustable-rate mortgages because of the low initial rate of an ARM.

In the end, there are pros and cons for each type of loan. Before you make a decision, seek advice from an expert– like one of our agents, who will be able to help you choose between a fixed and adjustable-rate loan.

Understanding the Key Parts of a Real Estate Purchasing Contract

Posted by Nestlewood Realty on January 10, 2019  /  in Blog, Questions and Answers  /  Comments off

A real estate purchase contract, also known as a “contract to purchase real estate” or a “residential purchase agreement,” is a binding, bilateral agreement between two or more parties. The purchase contract is the key to your real estate transaction. Not only does it make your purchase or sale official, but it also protects both the buyer and the seller, ensuring that all expectations are clear.

Purchase agreements can vary from one state to the next but generally contain the same key elements. In some regions, agreements are concise and serve primarily to open the negotiation process, while in other regions, the purchase agreement may be an in-depth, legally binding contract.

The U.S. Statute of Frauds requires that all real estate contracts must be in writing or they’re not enforceable, and must be signed by both the buyer and the seller. (Handshakes are a thing of the past!) An experienced real estate lawyer or agent will be able to help you put this together, but a real estate purchase contract should also include the following:

Identification of the parties

And a description of their role


A description of the property

Including the address, condition, and legal description


Price accepted by the seller

And means by which it will be paid


Deposit amount

And means by which it will be paid


Closing dates and costs

And who is responsible for costs


Itemized additional costs and who is responsible for paying

Including inspections, appraisals, etc.


Contingencies that must be met before the sale can go through

Might include problems with the inspection, appraisal, financing or title


Fixtures and appliances that are included

And what moves with the seller


Required disclosures

Like termite damage, lead paint, etc.


Delivery, acceptance and expiration dates

Exactly when the purchase agreement will expire if not accepted



Terms by which either party can back out of the agreement


The signatures of each party

Acceptance of the terms must be communicated. At this point, the offer becomes a legally binding contract

Having competent lawyers and agents in your corner who can draft a solid legal contract can help to prevent a good deal from going bad, but it’s still important to understand the elements of your real estate purchase and sale agreement.

As with any legal document, it’s essential to review a contract thoroughly. If anything is unclear, ask your Nestlewood agent and attorney. And even if you don’t see any red flags, ask questions anyway. You want to be especially careful when considering contingencies, disclosing information about the property, and deciding on deadlines.


Step into the Mindset of a Buyer

Posted by Nestlewood Realty on December 20, 2018  /  in Blog, House Remodeling, Questions and Answers  /  Comments off

What do Home Buyers Really Want in a House?

Don’t let the “small stuff” sabotage your sale.

As a home seller, you probably hear this advice a lot– and that’s for a good reason. Investing time and money on the turn-offs in your home can alleviate potential buyer hesitations and lead to a quicker, higher priced sale. So what qualifies as the “small stuff?” What details are home buyers really looking for in a house?

When you’re preparing to sell, take a second to step into the mindset of the buyer. They are probably looking for a home that fits their spatial needs, design preferences and ideal budget. Here are some selling points you can highlight in your home to capitalize on a home buyer’s wants and needs.

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