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Main Line Real Estate News & Market Trends

You’ll find my real estate blog to be a wealth of information, covering real estate Market Trends and real estate news, financial articles, numerous guidance articles on buying a home, selling a home, financing a home purchase, home loans, home maintenance, decorating, and design, among many others. The articles are valuable to both first-time home buyers and sellers, as well as to experienced home buyers and sellers. Please reach out if you have any questions at all. The articles in this blog contain a wealth of valuable insights and information. Enjoy! I love helping my clients find their dream home and preparing their home for sale. I'd love to talk with you!

Janis

Janis Peterson, Realtor®, GRI, ABR, SRES, CSP

Nov. 7, 2020

Real Estate is Leading the Economic Recovery

Real Estate is Leading the Economic Recovery

Although the Covid-19 pandemic has affected many industries this year, real estate has bounced back surprisingly well. After a minor pause in April and May, the real estate market surged upward through the summer and is anticipated to perform strongly in the Fall and winter.

Why the Real Estate Market is So Strong Right Now

Low interest rates. Current interest rates have been under 3% for over 12 weeks, making buying a home a very attractive option. These historically low rates are motivating people to advance their buying plans, while interest rates remain low, enabling them to purchase homes that might not be possible at higher interest rates, which has revitalized the market. With rates expected to remain low throughout the next year, home buyers should take advantage of these low interest rates.

Flight from density. As people continue working remotely, many individuals no longer need to live near their workplace, and many companies are now allowing, even encouraging, their workers to work remotely. This has led city-dwellers to move to the suburbs or exurbs to get away from crowds and be more socially distant. This has caused the market along the coast and around the suburbs to experience a rise in home sales and home prices.

Housing affordability. The current housing affordability index is 158.9, meaning the median household income has 58.9% more money than needed to afford a home. The index takes into account interest rates, median income and median home prices. With the current environment, consumers have strong buying power, allowing them to purchase homes they otherwise couldn’t afford at higher interest rates. Thus, if an individual is considering purchasing a home, now is a good time to advance the plans to do so.

In today’s competitive real estate market, Long & Foster’s integrated network of services make it easier to navigate the market. I am here for you and available to meet (virtually) and answer any questions you might have about buying or selling in today’s market.

At Main Line Homes, we have been helping Buyers and Sellers since 1994. We leverage the latest industry technologies to enable up-to-date tracking of market listings, empowering you to access newly listed homes as soon as they hit the market. We can help you find homes for sale across the entire Main Line, including lively Ardmore, vibrant Bryn Mawr, stately Gladwyne, heavenly Haverford, fabulous Villanova, wonderful Wynnewood, and all that the Philadelphia Main Line suburbs have to offer. Get in touch today, and let us help you with all of your real estate needs.

Sept. 2, 2020

Pennsylvania Living Costs: What You Need to Know

What is the Cost of Living in Pennsylvania?

Thinking of moving to Pennsylvania? You are not alone. In 2018 Pennsylvania, which is a sort of middle point between the Northeastern states, the Southern states, the Atlantic seaboard, and the Midwest, was ranked the 10th most popular destination for people moving from another state. 

 According to StorageCafé, costs of moving to the Keystone State were on average cheaper than moving to other states by up to $1,200. And this is just the beginning! The cost of living index scores the average cost of living in Pennsylvania favorably at 97 out of a national average of 100.  

Home Costs

Housing is one of the biggest costs that people incur. However, in this category, the PA cost of living does not disappoint. The median home value in Pennsylvania is $194,000 which puts the state in the mid to lower range of the country. In comparison, West Virginia is the cheapest state with a median home value of $108,236. Alternatively, Hawaii is the most expensive state with a median home value of $636,451. Business Insider approximates that at that home value, one could buy a 5-bedroom, 2-bathroom home in Bristol, or a 3-bedroom, 2-bathroom home in Glenolden. As you can see, when evaluating the cost of living in Pennsylvania homes are very affordable compared to other areas. 

Healthcare

This is another area where the cost of living in PA lives up to its reputation. Not only does the state have nationally-ranked hospitals that provide world-class quality and care, but in terms of health care costs, access and outcomes Pennsylvania was ranked 18th in the country and made the top 10 when it came to healthcare access. Even better, PA is well known for its scenic landscapes. These include mountain trails, vast lakes and stunning forests that have created a healthy and vibrant outdoor culture which all-round contributes to PA’s high quality of life. All of this means the average cost of living in PA includes topnotch healthcare--which you can’t put a number on! 

Education

Of course, when discussing the cost of living PA school districts are an important factor. Fortunately, Pennsylvania offers an exceptional educational system, with two school districts ranked in the top 10. And this trend of superior education quality runs through to higher level education as well. The state’s higher education system is composed of 260 colleges and universities. In this regard, the Pennsylvania living cost is above the country average due to the fact that state has the Carnegie Mellon University, the University of Pittsburgh and the University of Pennsylvania which are ranked highly not just in the USA but frequently appear in top-of lists worldwide for their programs in law, medical research, engineering, nursing and business. 

Day to Day Cost of living in Pennsylvania

PA offers an extremely reasonable cost of living compared to several other states. In fact, it ranks 32nd in the United States for cost of living. When it comes to groceries, utilities and transportation, Pennsylvania costs a little higher than the national average but not by much. And, this is somewhat offset by the decent wages made by workers in the state which average $22 per hour. This is considerably higher than the minimum average of $12 - $15 and much nearer the national average of $23 - $27. For a more accurate picture on the Pennsylvania cost of living comparison, the average spend in Philadelphia for utilities is below the national average but this is balanced against higher food cost price and transportation per month. 

Employment

Another thing to consider when discussing the Pennsylvania cost of living is employment opportunities. Pennsylvania hosts about 20 of the Fortune 500 companies which has boosted the state’s economy and job market. Healthcare practitioners and technical workers in professions such as law, architecture, and engineering had the highest salaries with the healthcare and manufacturing sectors hiring the most people. These sectors are followed by education and training. Overall, PA has unemployment rates lower than 5% in most major towns. This is almost a full percentage point less than the national average. Coupled with average job growth rates of 1.3% in the main sectors and relatively high hourly salary rates means that PA offers decent employment prospects for many Americans. As a result, it’s a very appealing place to relocate.

Childcare

This is the one area where the cost of living in Pennsylvania performs poorly with childcare costs almost being almost as high as rent prices for good quality care. Estimates indicate that infant care for one child would take up 15.8% of a typical family's income in PA which for lower income workers could be as high as 70% of their income. In response to this, the state is progressively implementing measures and subsidies to mitigate the exorbitant childcare costs. Once done, this will drastically improve the PA cost of living into an even more manageable range.

Based on the above, it is clear that the cost of living in Pennsylvania is both decent and on the whole quite manageable. To learn more as you research your possible move to Pennsylvania, don’t hesitate to contact Mainline Homes who’s on-the-ground expertise will help you make the most informed choices about your move. We offer homes for sale in some of the most popular Main Line neighborhoods including Bryn Mawr and Gladwyne. Get started on your home search today!

Posted in Buying A Home
Sept. 2, 2020

How to Buy A House in PA

Buying A House in PA: Everything You Need to Know

Pennsylvania, PA is a state filled with history and character, making it a great place to live and work. 

 

Referred to as the “Keystone State”, buying a home in Pennsylvania comes with a lot of advantages. But while you’re bound to be excited, don’t get so caught up in the thrill of home ownership that you forget to do your groundwork before you put your signature on the dotted line. 


The housing market in Pennsylvania is considered somewhat competitive. That said, everything from the local economy to your financials will impact what home you buy and how much it costs. 

 

In this guide, we cover how to buy a house in PA, including why we consider it a good idea.  

Why Consider Buying A House in PA

For one, Pennsylvania boasts a low cost of living and income tax when compared with states like its neighboring New York City. In fact, rent (or monthly mortgage payments) is about 50% less and real estate about 70% lower overall, which is great for anyone who is considering buying a house in Pennsylvania

 

On top of having a relatively low cost of living, many entrepreneurs thrive in this state due to the current collaborative business culture. For families, the great schooling system is a big plus, too. Pennsylvania has a great public school system, with an array of award-winning schools across many school districts. 

How to Buy a House in PA

1. Evaluate Your Financials

You don’t want to find your dream home, only to realize later on that you can’t afford it. Understanding your finances means considering: 

  • Looking at your credit score: To access a mortgage most lenders require you to have a credit score of 620 or higher. 
  • Your debt-to-income ratio: A ratio of less than 36% of your income going towards debt is recommended. This includes your future mortgage payments. 
  • The down payment: Even though you plan to take a mortgage, keep in mind that an out-of-pocket down payment of at least 20% on the house is typically required upfront. 
  • Home ownership costs: Buying a house is not the end of home ownership. There are maintenance costs, insurance fees, and other miscellaneous payments to consider. 

2. Find A Real Estate Agent

Finding a good real estate agent to help you with buying a home in PA is extremely beneficial. A good real estate agent is one who knows the community and market well, can compare house prices and find you the best house within your budget and needs. 

They should also be willing to connect you to home inspectors and mortgage brokers, draft your offer and handle all necessary paperwork after helping with the negotiations. 

One way to decide on a good agent is to ask around for good references and reviews from past clients. You should also choose one you have a good rapport with.

3. Choose An Area

Where you live in Pennsylvania should be determined by your priorities. What do you require of your area? Setting out your criteria before you begin your search will not only make things easier, it will ensure you don’t compromise on what’s important only to end up regretting your decision later. Do you have children and are looking for a good school district? Do you need to be close to the city? Already decided on Philly and need to find the best suburbs nearby? These questions are important to ask yourself before you share what you want with your realtor. 

 

4. Get A Mortgage Pre-Approval

Getting pre-approved for your mortgage should be done before you look for houses. Now that you have an understanding of your finances, you can approach your lender with your budget, credit score, and other documentation such as your income and assets. Pre-approval happens when your lender verifies this information.  

 

5. Make An Offer

After looking around and finding the house you think could be your next home, it’s time to make an offer to the seller. Discuss the Seller’s Disclosure with your agent first to make sure you have not missed any hidden costs. In Pennsylvania, homes sell the fastest around May, so be cognizant of demand in this stage when buying a house in PA. Submit the offer to the listing agent and negotiate it with the help of your agent. Signatures from everyone means you have an executed contract. 

 

6. Do A Home Inspection

Due diligence is important in making sure the home you’re buying is what you signed up for. After you identify a house you like and agree on an offer, hire a licensed inspector to do a thorough check on the condition of the property. Bigger issues such as foundations or termites can mean you can withdraw your offer, while issues that can be repaired easily allow you to go back to the negotiating table. 

 

7. Closing Costs

When you’re looking to buy a house in Pennsylvania, it’s important to keep closing costs top of mind. Typically, they include actions such as title searches, document recording, appraisals, insurance applications, and so on. Expect a Pennsylvania state deed transfer tax, and the state of Pennsylvania charges 1% of the sales price. They can run up to 5% of the mortgage amount, so buyers should remember to leave room for them in their budget. 

If you are thinking of buying a home in Pennsylvania, Main Line Homes is here to help. Call us at (610) 642-3744, and we’ll make sure you find the best home for your needs.

Posted in Buying A Home
July 24, 2020

Property Lines

Walking the Line: What You Need to Know About Property Lines

If you're a homeowner who is happy with their property and the neighbors around you, it's likely you've never had to think about property lines. This is even more likely if you have a fence around your yard or a line of trees acting as a border. But do you really know where the line dividing your legal property from your neighbor's really is? 

If you or your neighbor are looking into building a home addition or putting up a new fence, knowing how to find property lines becomes critical for maintaining a friendly relationship and protecting the land that you legally own.

In this post we'll cover everything you need to know about property lines so that you can approach the topic like an expert the next time it comes up. You'll need to know what a property line is, how to find them, and what resources are available to you to back up the legality of your property lines and make sure there's no room for dispute. Let's get started.

What is a property line?

A property line is the legal line which marks where your property ends and another property begins. Property lines are used to mark off lots of land that are under private ownership. A map of property lines is part of your property’s paperwork, also called a "plat". These plats are available at local zoning departments, where you may be able to obtain a copy of your block and lot plan.

 

You can also find property lines by looking for fences or other landmarks. Often, when concrete is poured for sidewalks, the contractor will start and stop at property lines. This will give you a cut line to look for in the concrete as an indication of where the property line is located. The appearance of the concrete in front of your house may also appear different than that in front of our neighbor's. Another good indicator to look for are survey pins — metal rods which often mark property lines. They are capped with plastic and made flush with the ground. Survey pins can usually be found with a metal detector.

 

While casual methods are fine for satisfying curiosity, it’s usually a wise choice to employ a professional surveyor who can create a property line survey for you. This report has legal weight, and is the best way of finding your property line

Why do I need to know where my property lines are?

As we said before, knowing where your property line is can have an enormous impact on home sales, renovations, and repairs. For example, if you want to install a fence, your local zoning ordinances might require an 8-inch distance of your fence from the property line. Other ordinances may dictate responsibility for sidewalks and tree removal. Finally, where a property line falls may be critical for liability issues, such as slips and falls. If you plan on building or renovating your home, knowing where the property line is can be critical.

How do I find my property line?

The best way to find the property line is to consult the plat for your property. Depending on the urgency, you may want to measure it yourself or call in a surveyor. In either case, it’s a great idea to visit your community’s zoning department. They can give you a copy of your plat (for a fee) and bring you up to speed on your local zoning ordinances.

 

You may also want to visit the register of deeds office at your county courthouse. There, you'll be able to obtain a copy of your deed. They may also have insights for you as to the history of the property. Property owners often sell off portions of their lots or bought pieces of them — the deed will list any changes like this.

 

Your deed should include a "metes and bounds" survey. This part of your deed describes a starting point from which you can measure all the corners of your property. However, it has technical language that can be difficult to understand.

What resources are available to help me determine property lines?

There are many resources that can help you find your property lines for free:

Local zoning and surveyors’ offices

These offices often have the actual survey maps for various properties, from which you can measure out your property by hand with a simple measuring tape. Many states also have interactive maps that you can use, such as this Massachusetts Interactive Property Map. These tools make it easy for you to find your property line and decide if you need to bring in a professional surveyor or not.

Mobile apps

Apps such as Landglide and Boundaryviewer use a combination of GPS and online records to help you find your property lines online.

Web based sites and apps

Google Maps has a feature that displays property lines based on the date that you input. This is part of the Google Earth and Google Maps functionality and is a free service.

Want to learn more?

If you’re buying, selling, or renovating a home, knowing where your property lines are is essential.  We at Main Line Homes have been working with home buyers and sellers in Philadelphia’s best suburbs for years to determine property line boundaries. Let us answer your questions today! 

Posted in real estate topics
July 24, 2020

VA Mortgage Calculator: Home Loan Rate & Payment Info

VA Mortgage Calculators & Loans: What You Should Know

One of the rewards of military service in the US is the ability to make use of the VA Loan Program to finance the purchase of a new home. However, there are a lot of special details that go into how VA loans work, above and beyond the usual complexities of regular mortgages. Today we want to talk to you not only about VA home loans, but also about VA loan calculators. A VA home loan calculator can be a great tool in helping you determine how much house you can afford.

What is a VA loan?

A VA loan is a mortgage loan in the United States that is guaranteed by the United States Department of Veterans Affairs, or “VA”. This program is used by US military veterans or their spouses to buy various home properties. To be eligible for a VA loan, there are some technical standards you should know.

Servicemembers usually must meet these eligibility requirements:

  • A servicemember must serve as an active duty member of the armed forces for 90 days as of July 2020.
  • A servicemember must have a minimum income from a variety of sources to be able to meet monthly loan payments. This can include social security income, retirement income, child support, alimony, and several other sources.
  • While the VA does not mandate a credit score, most lenders who participate in the VA loan program require a credit score of at least 620.

VA loans pros and cons

Like any kind of loan product, there are pros and cons to taking out a VA loan as opposed to another kind of loan product. These are a few examples:

Con: Funding Fee 

The VA charges what is known as a “funding fee”, a charge used to offset the costs of the program. The funding fee is a percentage of the loan based on factors such as your branch of service, whether or not you are a first time borrower or a repeat borrower, and how much of a down payment you are paying. Consult with your realtor for details.

Con: VA Loan Amount vs Cost of Your Home

Because of the funding fee and other factors, your loan might be larger than the cost of your home. To help prevent this downside, you can apply for grants to cover parts of these costs, ask your lender to cover these costs as part of the mortgage, provide a down payment, or purchase a home that is below its appraised value.

Pro: No private mortgage insurance (PMI)

Since the loan is guaranteed by the government, there is no need for loan insurance of any kind. Lenders require PMI for borrowers who cannot produce a down payment of at least 20 percent. This benefit is another huge plus for servicemember borrowers.

Pro: No Minimum Credit Score

While various lenders may require a minimum credit score, the VA does not. This lets borrowers with low credit scores shop around for a more favorable loan.

Pro: Limits on closing costs

The VA mandates limits on various kinds of closing costs, such as title fees, appraisal fees, loan discount points, and loan origination fees. You should check with your realtor about these details to learn more.

Pro: No Down Payment

This is one of the biggest advantages of the VA loan program.  Qualified service members can borrow as much as a lender is willing to lend to them, without necessitating any kind of down payment. This is a great pro when compared to private loans, which may require a 5 to 7 percent down payment, or an FHA loan, which can require between 3 and 4 percent.

What is a VA mortgage calculator? Why do I need one?

 There are a lot of complex factors that go into any mortgage. A VA mortgage calculator can help you determine various facts about your VA mortgage. These include:

  • Current principal and interest paid
  • Homeowners Association costs
  • Property Taxes

A VA loan mortgage calculator can help you estimate your total monthly VA loan payment. This is crucial to determine if a VA mortgage can fit into your monthly budget.

Realtor vs VA Mortgage Calculator

When looking to learn more about taking out a VA loan, you shouldn't have to decide whether to ask a realtor or just use a mortgage calculator — you should use both! An experienced realtor is one of the best allies you can have in a quest to acquire a VA loan. There are realtors who specialize in working with veterans and service members to leverage all the value from their VA loan benefit. After using a VA loan calculator, a realtor can help you interpret the numbers and come up with the best home buying strategy. 

Calculating the Use of Your VA Loan Benefit

Your time in military service earned you your VA loan benefit. You deserve to have that benefit maximized so that you can get the home you deserve. A VA loan rates calculator can be a great tool to understand where you start.

Reach out to us to learn more! We would be happy to answer any questions you may have about VA loans and VA finance calculators. As expert realtors specializing in Philadelphia’s best suburbs, we can find the perfect home for your exact situation.

Posted in Buying A Home
July 2, 2020

What is Title Insurance? - Policy & Coverage Guide

What is Title Insurance and How Can It Help You?

Title Insurance protects property purchasers and mortgage lenders against defects or problems with a title when there is a transfer of property ownership. If a title dispute arises during a transaction, the title insurance company may be responsible for paying stated legal indemnities, depending on the title insurance policy.

What is title insurance on a home? And, what is the purpose of title insurance? Read on to find out.

Title Insurance Definition

Title insurance is a kind of indemnity insurance that protects moneylenders and homebuyers from monetary loss sustained from faults in a title to a property. The most common type of title insurance is lender's title insurance, which the mortgagor buys to protect the moneylender. The other type is buyer's title insurance, which is often paid for by the seller to protect the purchaser's equity in the property.

How Does Title Insurance Work?

A clear title is needed for any real estate deal. Title insurance companies have to do a search on every title to check for claims or liens of any kind against them before they can be issued. A title search examines public records to identify and check a property's legal ownership and to determine whether there are any claims on the property. For example, a title can become faulty due to flawed surveys and unsettled building code violations.

The purpose of title insurance is to shield both moneylenders and homebuyers against loss or damage occurring from liens, encumbrances, or faults in the title or actual property possession. Common claims filed against a title are back taxes, liens (from mortgage loans, home equity lines of credit, and easements), and inconsistent wills. Unlike traditional insurance which safeguards against prospective events, title insurance guards against claims for previous incidences.

What Does Title Insurance Cover?

A title insurance policy usually covers the following:

Title Search

Though title insurance policies vary from state to state and provider to provider, they always cover the cost of conducting a title search. Preferably, a title search examines the entire history of a property, stretching back to its original platting or subdivision. A comprehensive title search typically relies on local tax records, previous owners’ wills, and applicable court judgments.

Curing or Resolving Problems

A title insurance policy also covers the cost of resolving (also known as curing) most title defects uncovered during the title search. Common defects include:

  • Tax liens (for unpaid taxes)
  • Construction liens (for unpaid construction or renovation bills)
  • Creditor liens (such as an unpaid balance on a pre-existing mortgage)
  • Court judgments (such as a post-divorce judgment endowing part of the property to a previous spouse)

Legal Costs and Loss Compensation

Title insurance also covers future costs arising from title disputes. If a court rules the most recent transfer of the property as invalid, the policy also compensates the policyholder for any loss of equity in the property.

How Much Does Title Insurance Cost And Do I Need It?

Unlike traditional insurance companies where monthly payments are needed, title insurance only needs a one-time payment. This insurance varies according to the price on your home and according to the state where you are buying a property. Typically, a title insurance policy for a homeowner costs $834 and for the lender it costs $544.

Title insurance will buy you peace of mind. It not only protects you against covered claims, but it will also pay your legal fees while you protect your ownership rights. Plus, it will pay you the amount of your home equity if you lose the lawsuit and have to vacate the property. If you pass away and leave the property to your heirs, the same title insurance policy will cover them while they’re in the home.

Benefits of Title Insurance

With title insurance, you and your creditor won’t have to worry about problems cropping up during the real estate deal. The title insurance company identifies and fixes all the problems before you close the deal and protect you if any disputes arise after closing.

After the title search, the insurance company issues a “title insurance commitment” describing what they’ve uncovered, giving the seller the chance to clarify any problems. At the same time, the buyer gets the opportunity to call the sale off. If all parties agree with the title commitment, the transaction proceeds and when you close on the property, you do so with a clear title and insurance to cover any unexpected claims in the future.

In the grand scheme of your home buying expenditures, title insurance is small and often overlooked. That doesn’t mean you should skip it, though. Think of it as a little investment that safeguards your biggest investment: your home. 

In the competitive real estate market today, whether you are a buyer or a seller, you need a skilled negotiator to ensure a successful outcome. Call 610-642-3744 or email Janis Peterson at janis@mainlinehomes.com and buy or sell your next home with the best Main Line real estate agents! You can also browse our listings in Bryn Mawr, Gladwyne, Haverford, Villanova, Wayne, and all the best Philadelphia suburbs online.

Posted in Buying A Home
July 2, 2020

What is Escrow? - Mortgage Payment & Loan Guide

What is Escrow and Why Do You Need It?

If you’re buying or selling property for the first time, you’re perhaps wondering, what is escrow? And what is an escrow payment? According to escrow mortgage meaning, it is a third-party service that's typically compulsory when buying a home. When a purchaser and seller reach a buying agreement, they choose a neutral third party to act as the escrow agent. 

What is an escrow agent? The escrow agent accumulates earnest money from the purchaser, which is a deposit that’s equal to a small percentage of the sale price. In return, the seller takes the property off the market. Until the final exchange is concluded, both the purchaser's deposit and the seller's property remain in escrow.

What is an escrow payment on mortgage? In this article, we’ll discuss the definition of “escrow” in relation to a mortgage and how it can help improve your home buying or selling experience.

How do Escrow Accounts Work?

What is escrow on a home loan? When you get a mortgage loan from a bank or direct creditor, you also have an escrow account that lets you pay your property taxes and homeowner's insurance payments in good time. Although these overheads are funded on a yearly basis, your creditor will ask you to pay a monthly share towards each cost and accrue the balance in your escrow account. This guarantees that these overheads get funded promptly each year.

Escrow mortgage accounts are compulsory as they reduce the risk of borrowers failing to fulfill their financial commitments as homeowners. Creditors often oblige you to maintain a minimum balance in your monthly escrow payment mortgage account to protect against any unforeseen cost upsurges. The typical rule necessitates a minimum of two months' expenditures on your escrow payment account, however, the limit can be higher on chancier mortgages. Creditors generally appraise your escrow account annually to ensure that the calculated payments are keeping pace with outlays.

Types of Escrow Accounts

There are two types of escrow accounts that are part of the homebuying process.

Mortgage Escrow Account

Also called an impound account, a mortgage escrow account is set up by your creditor to pay certain property-related expenses on your behalf. If your loan includes an escrow account, you will pay monthly installments for taxes and insurance in addition to your monthly mortgage payment. Your mortgage servicer will deposit these monthly installments into the escrow account. Then, your servicer uses the funds to pay your bills when they are due, usually once or twice per year.

Real Estate Escrow Account

Also called pre-closing escrow accounts, these are held by third-party entities separate from both the purchaser and the seller, and are intended to safeguard the interests of both. These accounts keep all funds, instructions, and paperwork essential for the impending real estate sale, including money for the down payment and the deed to the home.

How are Escrow Accounts Managed?

When you borrow money from a bank or a direct creditor, you'll usually be given an escrow account. This account is where the creditor will deposit the part of your monthly mortgage payment that covers taxes and insurance payments. By accumulating a portion of those yearly costs each month, the escrow account decreases the risk that you'll delay your financial obligations to the government or your insurance provider.

Usually, the purchaser (or an agent acting on behalf of the purchaser) will instruct the escrow officer to release funds only when all terms have been fulfilled, title insurance has been issued, and the seller’s deed has been signed. Escrow is not complete until all the conditions have been fully satisfied and all the parties have signed the appropriate documentation.

Benefits of an Escrow Account

What is escrow used for? Escrow accounts provide protection for the seller, purchaser, and lender in a real estate transaction by guaranteeing that no funds or property are transferred until every escrow term is fulfilled.

For instance, an inspection shows that plumbing repairs are required, which the seller agreed to as an escrow condition but does not actually complete. As the funds are held in the escrow account, the purchaser has the power to stop the sale process if the repairs are not completed.

Some of the key benefits of escrow accounts are:

  • Home Buying: An earnest money deposit should remain in an escrow account to protect both the purchaser and seller.
  • Monthly payments: A homeowner might make deposits into an escrow account with each monthly payment, helping to smooth out large yearly expenditures. 
  • Tenants and landowners: Escrow accounts can help safeguard the interests of tenants and resolve disputes. 
  • Purchasing goods and services: Escrow is an option for almost any transaction where purchasers and sellers want an arbitrator to watch over payments.

Still wondering, what escrow is for a mortgage? Whether you are buying a home or selling one, understanding how escrow works can be overwhelming. With Main Line Homes by your side, you don’t have to worry. 

We use the hottest industry technologies to allow for the up-to-date tracking of market listings. We can help you find homes for sale in the best Philadelphia suburbs including Bryn Mawr, Gladwyne, Haverford, Villanova, Wayne, and across the entire Main Line region. Get in touch today!

Posted in Buying A Home
June 11, 2020

First Time Home Buyer Credit Defined Past & Present Impacts

Popular Alternatives to First Time Home Buyer Credit

Planning to buy your first home and wondering if there are any tax breaks available to help? Perhaps you have heard about first time home buyer credit. It was created by Congress as part of the Housing and Economic Recovery Act of 2008. However, for most buyers, the first time home buyer tax credit was only available for a limited time: 2008 to 2010.

Although the new homeowner tax credit is no longer available, there are plenty of other programs that can help you buy your first home. And once you become a homeowner, you may be able to leverage tax breaks for new home buyers intended to help ease the cost of owning a home.

What is a Tax Credit?

A tax credit is the amount of money that taxpayers can deduct from taxes payable to the government. Unlike tax deductions and exemptions that decrease the amount of taxable income, a tax credit decreases the actual amount of tax payable.

Governments may provide a tax credit to encourage a particular behavior, such as swapping older appliances with more energy-efficient ones, or to help underprivileged taxpayers by decreasing the total cost of accommodation.

What was the First time Home Buyer Credit?

The first time home buyer tax credit was part of the legislation passed by the federal government during the period of Great Recession. This legation was intended to help recover the economy. The 1st time home buyer tax credit was for individuals and couples who bought a new house between April 8, 2008, and Sept. 30, 2010. 

In July 2010, Congress extended the closing deadline for the credit until Sept. 30, 2010. However, houses purchased after this deadline could not qualify for the credit. And home buyers and proprietors had to satisfy other specific eligibility criteria to claim the new home buyer tax credit, including meeting income limits.

Can I Claim the First time Home Buyer Credit?

At present, there’s no federal 1st time buyer credit. In 2018, legislation was presented in the Senate to reintroduce the credit, but it wasn’t accepted. So, if you bought your house between April 8, 2008, and Sept. 30, 2010, and fulfilled the eligibility criteria, you may have claimed the first time home buyer tax return when filing your income tax return in 2008, 2009 or 2010.

If you didn’t claim a credit or deduction in the tax year you were eligible for, you can claim it by filing an amended return. However, you have to file within 36 months of the date of the original return, or 24 months from the date you paid the tax, whichever is later. As the first home buyer tax credit ended in 2010, it’s now very late to claim through an amended tax return in 2020.

First Time Home Buyer Credit Alternatives

The following are some popular first time homebuyer tax credit alternatives to provide you with closing cost and down payment assistance.

Government-backed Loans

The federal government provides different types of loans to help people buy their first house. These loans may have less strict eligibility criteria and be more reasonable compared to other kinds of loans.

  • FHA loans: These are loans from private creditors that are supported by the Federal Housing Administration.
  • USDA loans: These loans are sponsored by the U.S. Department of Agriculture for low and moderate income mortgagors in rural areas. They often come with no down payment and are usually cheaper than FHA loans.
  • VA loans: These are loans from private lenders that are backed by the U.S. Department of Veterans Affairs for eligible veterans, service members and their spouses.

Fannie Mae and Freddie Mac Programs

These are government-sponsored mortgages that are intended for low income homebuyers. Both programs require a 3% down payment.

HUD Program

The Department of Housing and Urban Development (HUD) offers a Homeownership Voucher Program that can help low-income families make their monthly mortgage payments, as well as meet other home expenditures.

Tax Breaks for New Homebuyers

The federal government offers the following tax breaks for new homebuyers:

  • Mortgage interest deduction: It allows you to deduct mortgage interest you paid during the year on your federal income tax return.
  • SALT deduction: If you’re paying certain state and local taxes, including property taxes, this tax break allows you to subtract up to $10,000 of these costs on your federal taxable income.
  • Residential energy credits: They are available to eligible homeowners who make energy-efficient improvements, such as installing solar panels or efficient heating and air-conditioning systems.

Main Line Homes is Your Resource

The costs of buying and owning a home are substantial. But by taking advantage of the first time homebuyer credit alternatives and tax breaks available, you can cover the cost of home buying and homeownership.

Before you make a move toward buying your first home, make sure you understand where your credit stands and how it might impact your eligibility for home loans.

With Main Line Homes by your side, you don’t have to worry.  Whether a Bryn Mawr colonial or ranch style haven in Radnor, we can provide great knowledge and resources to help you finance your first home. Call (610) 642-3744 today to get started!

Posted in Buying A Home
June 11, 2020

First Time Home Buyer Programs: Beginner’s Guide

All You Need To Know About First Time Home Buyer Programs

Today, first time home buyers are facing one of the toughest real estate markets. Inventory is especially tight in many parts of the country as investors purchase these houses to flip for quick income. Moreover, increasing costs are compelling constructors to concentrate more on high-end houses that increase their own profit margins.

For a first time home buyer, free money is a dream. But we know how not all dreams come true. Fortunately, there are numerous first time home buyer programs and grants available to help you manage paying for your first real estate purchase. These first time home buyer assistance programs offer benefits such as lower down payments and closing costs. We’ve compiled eight of the best first time home buyer government programs and other grants to help you buy your first home.

1. Federal Housing Administration (FHA) Loan

The FHA works with local creditors countrywide to offer loans to individuals who may not qualify to get them elsewhere. As the government indemnifies shares of these mortgages, creditors are at ease offering first time homeowners loans to individuals without the strongest credit history. For instance, a credit score of around 580 can earn you an FHA loan with a 3.5% down payment, making it a solid first time buyer program.

2. United States Department of Agriculture (USDA) Loan

Among the options of special first time home buyer grants, the USDA provides low interest loans to low income individuals who wish to live in rural regions. But, the USDA has a broad definition of “rural” so even some outlying locations fall under its radar. These loans usually carry low-to-no first time home buyer down payment. The USDA indemnifies local creditors to a certain extent, so the government organization takes on less risk providing loans with modest rates.

3. Veterans Affairs (VA) Loan

The Department of Veterans Affairs offers loans to eligible military members including first time home buyers. Unlike their conventional counterparts, these first time home owner grants usually carry lower interest rates. VA-partnered creditors also offer mortgages with little-to-no down payment. To be eligible, you must fulfil certain requirements specified by the VA and possibly some specified by particular creditors.

4. Native American Direct Loans (NADL)

NADL is another popular first time home buyer loan, which is backed by the Department of Veterans Affairs for homes on Federal Trust Land. To be eligible, you must fulfill the elementary requirements for a traditional VA grant along with other terms. For instance, you must be a Native American enrolled in an American Indian tribe or Alaskan Native village or belong to a tribe that has set a Memorandum of Understanding (MOU) with the VA. Alternatively, you should be married to an eligible individual.

5. Good Neighbor Next Door Program

It’s a first time buyer program sponsored by the U.S. Department of Housing and Urban Development (HUD). It provides housing assistance for law enforcement officers, firefighters, emergency medical technicians, teachers, and other public servants. This program helps these individuals stay in their local communities by helping them repay their home costs.

6. Fannie Mae or Freddie Mac Program

Both these first time home buyer programs are best for mortgagors with strong credit but minimal down payments. They are government-sponsored enterprises that set borrowing guidelines for mortgages they’re willing to purchase from conventional creditors on the secondary loan market. Both programs necessitate a minimum 3% down payment. You also need a minimum credit score of 620 (depending on the creditor) and a comparatively flawless financial and credit history to be eligible.

7. Energy-Efficient Mortgage (EEM)

These loans are ideal for first time home buyers who want to make their house more energy-efficient but don’t have upfront money for renovations. EEM loans are insured through the FHA or VA programs, helping you meet the costs of making “green” upgrades to your home. These upgrades include new insulation, a more efficient HVAC system or double-pane windows.

8. State and Local First time Home Buyer Programs

Regardless of what state you live in, you should check out your local government housing agency to see if it has any first time home buyer grants for which you might qualify. For example, the Pennsylvania Housing Finance Agency (PHFA) offers down payment and closing cost assistance to first time home owners in the Keystone State. It also provides mortgage loan programs, refinancing, and home improvement loans. Some state housing programs also partner with loan creditors to offer 30-year fixed rate loans with competitive rates for eligible candidates. Often, you can even combine these loans with other aids and endowments.

With so many first time home buyer programs to choose from, it can get overwhelming for you to narrow down your options. That’s where Main Line Homes can help you. From Ardmore to Haverford and beyond, as your buying agent, we can help streamline the process of buying a home for the first time. Contact us today to find out more about our services.

Posted in Buying A Home
May 16, 2020

Sellers Disclosure

What Is A Seller's Disclosure (And Why It’s Important)

If you’re looking to buy a new house, be prepared to handle a lot of paperwork. One piece of paperwork that’s particularly important is the seller's disclosure statement. It advises you of any potential issues with the home before you make the big move.

So what is a seller disclosure? And why is it so important? Read on to find out in our detailed guide to real estate disclosure.

What is A Seller's Disclosure?

A seller’s disclosure statement is a set of documents completed by the seller of a house, mentioning any identified issues with the property and any major renovation done during the time they owned the house. In most states, the seller has to provide this property disclosure within a few days of mutual acceptance. In turn, the purchaser has a specific number of days to appraise the house disclosure.

Generally, potential purchasers can ask their real estate agent for access to the seller's property disclosure before making an offer. But, when purchasing bank-owned houses, purchasers will not receive any disclosure statement because the bank doesn’t have to provide details about the condition of the house.

Why Do You Need A Seller's Disclosure?

The basic idea behind a seller disclosure form is to protect buyers from purchasing a property with undisclosed problems. However, the real estate disclosure is also extremely important for protecting the seller from possible lawsuits.

If you fail to disclose a problem you are already aware of and it later causes issues for the new buyer, you could be sued for the price of repairs or more. You could downplay some problems because you don’t see them as major complications, however, telling buyers about any issue up front is the best option.

In Pennsylvania, for example, every home seller is obligated to disclose all identified defects that could substantially affect the value of the property. Hiding or manipulating this information can be damaging to the seller as they can face serious legal repercussions.

How are Seller Disclosures Made?

Every state has a different disclosure law, which impacts the way seller disclosures are made. For example, Pennsylvania has very severe disclosure statement requirements, obligating sellers (and their agents) to complete or sign off on papers like a Natural Hazards Disclosure Statement, and even Megan’s Law Disclosures.

Wondering about the structure of disclosure statements? They come in the form of a boilerplate document that’s assembled by the local or state real estate association. In this statement, the seller answers a series of yes/no queries about their house and their experience of living in it.

Moreover, sellers also have to share any documented communication (such as with a neighbor, previous proprietors, or the agent) about a significant fault or item that could have a negative impact on value of the property.

What is in A Seller Disclosure?

The seller can include pretty much all the issues or enhancements that they know of concerning the property. For instance, they may include who worked on the property and whether the permits were pulled. Or, they may mention info on the kind of plumbing and electrical wiring the house has.

Nuances about the neighborhood may also be relevant, along with the working of the household appliances, roof leaks, and other such problems.

Think of a seller's disclosure as the seller’s opportunity to disclose anything that can negatively affect the monetary worth of the house or the living experience of the new owner.

Real Estate Disclosure vs. Home Inspection

The inspection and real estate disclosure process is a critical part of your home-buying experience.

Home inspection allows the buyer to fully inspect any property they intend to purchase. As a buyer, you should always do a full property inspection before proceeding with the purchase. The property inspector checks all systems and components from the rooftop to the basement. Often, a seller hires an inspector before going on the market and supplies the written report to the purchaser.

On the other hand, the real estate disclosure is something the seller gives to the buyer by documenting their knowledge of the property. Although it provides useful info, it is not a substitute for an assessment by an independent third party inspection. A thorough house inspection may disclose faults that the seller may not have been aware of.

Consult Main Line Homes

When it comes to the seller's disclosure, you’ll find plenty of misinformation out there. Therefore, it is important to consult a professional real estate service like Main Line Homes about your disclosure statement before making the home-buying decision. 

The house disclosure allows you to have a complete understanding of the condition of the property you are purchasing.

From your initial property search to the moment you get the keys to your new home, Main Line Homes will be there, guiding you through the process. We can even help connect you with mortgage professionals to get the best rates.

Thinking of buying or selling a home? Call 610-642-3744 or email Janis Peterson at janis@mainlinehomes.com to buy or sell your next home with our experienced real estate agents. Browse attractive homes for sale in Radnor, Wayne, Ardmore, and across the entire Main Line today!

Posted in Selling A Home