2. What is the difference between a lender and a broker mortgage?
The word lender usually refers to banks that originate loans, such as Bank of America, BB&T, and B.F. Saul Mortgage (Chevy Chase Bank). Usually lenders offer a better annual interest rate, but at the same time are more selective in approving buyer’s financial conditions (such as credit history, income, savings, etc).

A broker mortgage is an entity that acts as an intermediary between a lender and a buyer. These companies generally have more flexible loan requirements and are not as selective accepting buyer’s financial conditions. Broker mortgages typically offer a variety of programs for buyers with low credit score, little credit history, or low income, for example. However, broker mortgages generally offer a higher interest rate than lenders.

Realtors work constantly with different financial institutions and can recommend the best option based on your financial profile.

3. What are the advantages of buying a property?
When you purchase a property you become its owner, and owning a piece of real estate has many advantages. Primarily, your property becomes a tangible asset that provides security for your family since it can be used as proof of financial solidity, among other things.

Another important advantage of buying a property is the equity acquired on the property. Equity occurs when market conditions allow the property to increase in value. Equity is calculated by figuring out the current market value of your property and subtracting it from what you actually owe.

• Current market value - debt = equity

Presently, it is estimated that homeowners in the Washington metropolitan area acquire significant equity in their property over the course of one calendar year (this is based on current market trends).

Moreover, homeowners also receive an annual tax break for owning real estate. Consult with your accountant to obtain more information about tax deductions for homeowners.

4. What can I do with the equity on my property?
Once equity has been acquired on a property, owners have several options:

a) Refinance your property and obtain a cash-out (see answer 5a).

b) Invest your equity in the purchase of a second property: the built equity on a property can be used to re-invest it in a second property with the purpose of renting it, and in this way earn both the equity on the new property and the increasing equity on the first.

c) Use your equity as down payment for the purchase of a more appealing property while keeping low monthly payments: Buyers can think about purchasing a bigger or better-located property and at the same time keep their monthly payments reasonable using the equity of their first home. This could be an interesting option for those who wish to upgrade their housing needs.

5. What does “refinancing” mean?
Refinancing, in essence, means to re-finance your property for your current debt to acquire certain benefits. Homeowners can choose to refinance for different reasons:

a) Refinancing to obtain cash-outs: A “cash-out” entails refinancing your property and retrieving the cash of the built equity for personal use: Financial institutions refinance the buyer’s debt and give him/her the property’s equity in cash.

b) Refinancing your property to lower the monthly payment: Real estate interest rates fluctuate regularly depending on a market index set by the federal government. If current market rates are lower than the ones you were given at the time of your property purchase, you have the option of refinancing your property for your current debt with a lower annual interest rate. This can lower your monthly payment.

6. What is the best time to sell my home?
The best moment to sell a home varies on a case-by-case basis. It’s important to have guidance from Realtors when homeowners begin thinking about selling since there are various issues to keep in mind, such as the amount of equity build up, the current prices of desired purchase locations, capital gains tax, etc.