Current Mortgage Rates: Richmond, VA
2.875% (2.938% APR) 30yrs
2.375% (2.381% APR) 15yrs
as of 01/25/21
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Mortgage Blog

Feb 7

Goochland County Real Estate: 2016 Market Summary

Goochland Real Estate and Home Sales Statistics for 2016

2016 was another strong year for home sales in Goochland, Virginia with 317 homes sold. The average home sold in 2016 was 2,933 square feet and sold for $478k (an average of $163 per square foot). The average sale price was up 9% over 2015 home sale prices marking another strong year of growth in home values. The average listing price in 2016 was $483k with homes averaging 72 days on the market. The highest priced home sold in Goochland in 2016 was $2.7 million where the lowest sale price was $23,700.

Goochland is very diverse area offering everything from horse and livestock farm properties to luxury neighborhoods such as Holland Hills, Kinloch, and The Meadows at Joe Brooke Farm. Goochland homeowners are spoiled with the serenity of country life with convenient access to many amenities in neighboring Short Pump (West End of Henrico). Find your peaceful country getaway in Goochland Virginia.

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Feb 7

Powhatan County Real Estate: 2016 Market Summary

Powhatan Real Estate and Homes Sales Statistics for 2016

2016 was another great year for real estate activity in Powhatan County, Virginia. In total, there were 464 homes sold in Powhatan which was a slight increase over 2015. The average home sold in 2016 was 2,245 square feet and sold for $299k which comes to $133 per square foot (average for 2016). This average sale price was up 3% over 2015 Powhatan home sale prices, marking the third straight year home sale prices have increased. The average listing price in 2016 was $302k and averaged 55.7 days on the market. The highest sale price for a Powhatan home sold in 2016 was $1.2 million while the lowest priced home sold for $31,650.

Powhatan is a very diverse area offering many luxury neighborhoods such Aston, French Hill, and Founders Bridge. It is also a community known for expansive acreage available for horse, livestock and agriculture farms. While the area is considered rural, Powhatan homeowners still appreciated convenient access to local medical facilities, great restaurants, and multiple entertainment options. Find your next home in beautiful Powhatan Virginia.

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Jul 22

The Insider Secret of a No Closing Cost Mortgage

Mortgage quotes come with options that you may not be aware exist, but definitely need to understand if you want the best mortgage for your unique situation.

The terminology used by mortgage lenders to describe these options is probably foreign to most borrowers – par, above par and below par pricing.

These mortgage terms also come with more consumer friendly names – especially above par pricing and below par pricing. Consider par pricing in golfing terms – if you make a par you are even. You neither pay more or less for the mortgage rate quoted.

When your mortgage rate is above par it means the mortgage rate quoted is yielding additional funds to the lender. In the past that money typically went into a loan officer’s pocket, but those days are long gone.

Mortgage loan originators are paid a flat fee on every loan they originate. It does not and cannot vary based on the mortgage rate charged.

So, how does this above par and below par pricing work and how should you pick and choose when to use it?

Ins and Outs of Above Par (Lender Credit) and Below Par (Discount Points) Pricing

Discount points and lender credits give you options. They represent a tradeoff of out-of-pocket expense at closing or paying more/less on your monthly mortgage payment.

Discount points (below par), lower your interest rate in exchange for an upfront fee.

Lender credits (above par) lower your closing costs in exchange for a higher interest rate.

Points are listed on your Loan Estimate and on your Closing Disclosure on page 2, Section A.

By law, points listed on your Loan Estimate and on your Closing Disclosure must be connected to a discounted interest rate.

The exact amount that your interest rate is reduced depends on the specific lender, the type of mortgage loan and the current state of mortgage market rate pricing.

Sometimes you may get a big reduction in your mortgage rate for each point paid. Other times, the reduction is smaller.

Lender credits (above par pricing) are simply discount points in reverse. You pay a higher interest rate – usually – and the lender gives you money to offset your closing costs. Pay less at the closing table, but more each month. Simple right?

By law, above par pricing must be passed back to the borrower in the form of a lender credit. It also must be clearly disclosed on the loan estimate and closing disclosure forms that every borrower receives – usually multiple times from application to closing.

The same goes for discount points, they must be applied to obtain your mortgage rate and fully disclosed.

Ever heard the talking heads on the radio blabbing about a “no closing cost” refinance? That doesn’t exist, it always cost money to close a mortgage loan – purchase or refinance. Someone is absorbing those costs and it is typically the lender in the form of above par pricing – a lender credit – originating from a higher mortgage rate.

Regardless, it is important to remember what we mentioned earlier – that mortgage rate and discount points – or lender credits – do not affect loan officer compensation. Nobody is pulling the wool over your eyes, it all has to be clearly disclosed at application, when you lock your mortgage rate and prior to closing too.

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Jun 8

Becoming a Homeowner When You Don't Now Qualify For a Mortgage

Lease-to-own contracts (LTOs) and land contracts (LCs) are different legal ways to transfer occupancy of a property from an existing owner who does not want to occupy it to someone else who does, but who cannot qualify now for the financing required to purchase it outright. Both LTOs and LCs offer wannabee owners the right to occupy a house for a period during which they can improve their capacity to qualify for the financing they need to complete the deal.

Note: The LC designation includes what are called “contracts for deed” which are used in the same way. Detailed provisions of both vary from state to state.

The LTO Transaction

With an LTO, the new occupant becomes a tenant and the current owner becomes a landlord who offers the tenant an option to purchase the house within a specified period. The tenant will need a purchase mortgage when the time comes.

As an example, assume a house appraised for $100,000 that cannot be sold outright at that price but the price is acceptable as the option price under an LTO. The renter/buyer has the right to occupy the house with an option to buy anytime within 18 months for $100,000 in exchange for a non-refundable option fee of $1500 and monthly rent of $900 for 18 months. If the wannabe buyer cannot qualify for the mortgage required to exercise the option within the 18 months, her option lapses and she must vacate at the end of the period.

The LTO offers the wannabee homeowner an opportunity to bet on herself. To become a homeowner, she must either improve her credit score, or accumulate the funds required for a down payment on a purchase mortgage, or both.

The LTO offers the seller a chance to obtain a better price than is otherwise available. If it turns out that the buyer cannot complete the transaction, the seller retains the option fee and rent, and recovers the house, perhaps to offer it again to another wannabee owner. If the seller had a mortgage, it would not be affected by an LTO that fizzled.

Price changes that occur during the option period do not benefit the wannabee owner. If the house declines in market value, purchase at the option price becomes less attractive. If the house appreciates in value, purchase at the option price becomes more attractive, but the capacity to make the purchase will not increase. The maximum available mortgage amount will be based on the option price, not the current market value, so that the required down payment will not change.

The LC Transaction

With an LC, the new occupant purchases the property with financing provided by the seller, who becomes a lender. But legal title does not pass until the loan is paid off, which requires the new occupant to refinance.

As an example, under the LC, the wannabe buyer pays $100,000 for the house, including $1500 in cash as a down payment, with the seller providing a loan for $98,500. The monthly payment of $900 covers the principal and interest plus taxes and insurance, with the loan balance of $96,658 after 18 months due at that time. If the wannabe buyer cannot refinance, the owner does not transfer legal title and can take steps to have him evicted.

To wannabee owners, an important difference between LTO and LC deals is that completing the first requires a purchase mortgage while completing the second requires only a refinance of the mortgage granted by the seller. Closing costs are lower on a refinance, and the down payment required is smaller. The $1500 that went into the seller’s pocket as an option fee on the LTO became buyer equity on the LC.

Furthermore, since the equity required on the refinance is based on a current property appraisal, an increase in market value during the 18 months will reduce and could even eliminate the need for the buyer to come up with additional cash. In the example, a lender imposing a 10% equity requirement on refinances would refinance the entire $96,658 balance after 18 months if the market value of the house had risen to $107,500.

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Sep 4

Choosing the Best Type of Mortgage

Mortgage borrowers having to choose between the different types of mortgages face a puzzle, which may be
particularly perplexing today. Interest rates remain low by historical
standards, the spread between fixed and adjustable rates remains large, but
expectations are widespread that all rates will soon increase – unless the
current collapse of stock prices causes rates to drop again. The
challenge to borrowers who must make a type-of-mortgage decision in this
environment is also a challenge to anyone presumptuous enough to offer them advice.

My response to that challenge has been to develop decision rules that indicate the circumstances under which each of
the major mortgage types should be selected. I will illustrate with a
hypothetical mortgage of $405,000 on a $450,000 single-family home to a
high-credit score borrower at the competitive prices posted on my web site on
August 21. The interest rates cited are for loans carrying zero or close to
zero origination fees. The numbers used are designed to provide readers with a
feel for the magnitudes involved, but the decision rules are not dependent on

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