Vermont Mortgage Rates

Vermont Real Estate Prices vs. National Pricing

Vermont real estate sale prices are registering lower than they did this time last year. Both condos and vacation homes have shown the largest percentage drop. However, this summer, median prices held the same levels which indicated a stable market.

In the summer of 2009, vacation properties surprisingly increased in sales, compared to the previous year. In July through October of that year, vacation home sales were up 61.6% and condo sales jumped to 68.6%. These market sales were measured against decreased vacation property sales right before the financial meltdown of 2008.

Nationwide, sales are up because the prices are down. The total for existing home sales climbed to 11.4% in the third quarter. According to the National Association of Realtors, that’s about 5.9% higher than it was a year ago. In contrast, compared to 2008, the primary home sale volume for Vermont during this summer and fall came down 15.9%.

The national median price for a single-family home comes in at $177,900. According to the National Association of Realtors, this is 11.2% below what it was in the third quarter back in 2008. The median price for a home in Vermont has come down 4.5% from last year.

Popular Cities to Live in Vermont

Vermont has a growing population of college educated residents. Many of them have government jobs; work in health care or real estate. The median income in Vermont is in the mid $48,000s. Two of the great commodities produced there are wine and maple syrup. In fact, there are fourteen wineries in Vermont and about a quarter of our countries maple syrup is produced there.

Back in 2007, Vermont came in 17th for having the most affordable mortgages. Even though housing sales have gone down, the real estate prices have done better than harder hit areas in the nation. Here are a few of the popular cities in which you can purchase real estate in Vermont.

Burlington, VT

This is the fastest growing city in Vermont and the most popular for purchasing real estate. Unfortunately, within the last 10 years Burlington has only increased by about 370 households. Approximately 40,000 people call Burlington their home. Even though it’s the most populated city, it isn’t the capital of Vermont. Vermont’s capital city is Montpelier, one of the least populated capitals in America.

Burlington has a variety of modern and country style homes. These homes can cost $100s to $600k. Many homes have both lake and garden views. Some have contemporary features including granite counter tops, tile inlays, glass showers and bamboo floors.

Rutland, VT

With 16,800 residents, Rutland has become the second fastest growing city in the state of Vermont. This is due largely in part to its resort community. The most popular resorts that many come to experience are the Killington Mountain Ski Resort, Okemo Resort and Quechee Gorge.

Homes in Rutland are mainly New England style country and range from the low 100s to $500K. Some homes come with amenities, but many are standard. Many of these on the market are older models. However, because the population is small, about 40 new homes have been added bringing the total to 400 and the city is still growing.

Barre, VT

Most of the homes for sale in Barre were built before the 1950s. That means the style is more Victorian. Many of them have more rooms than you would find in the modern homes of today. If the home buyer is someone who enjoys the Victorian era, then perhaps Barre, Vermont is the location to move to.

These Victorian style homes range in price from the low $100s to $400K. There are some cases where a buyer considering purchasing a Victorian home may be able to find one with 5,500 square feet and seven bedrooms with 4.5 bathrooms all for less than $200K. This particular type of home would have been built in the 1800s or early 1900s.

Montpelier, VT

This of course is the state capital of Vermont and home to 7,800 residents. Since it’s one of the smallest populated capital cities in the United States, Montpelier was given an award for its population size and being the smallest. If you visit Montpelier, you’ll find the New England Culinary Institute as well as theatres, galleries and museums.

Montpelier’s median price for a home is $220,000. However, the median sale price is around $247,000 for either single family homes or condos. Currently, you won’t find many homes on the market in Montpelier, but it’s possible to still find a reasonably good buy.

Mortgages Offered in Vermont

Fixed Rate Mortgages

This is the most popular type because the monthly payments are set over a certain timeframe. The length of the mortgage is usually 15-30 years although you can have a shorter or longer period, it depends on the lender. The buyer knows that their payment will never change as the market fluctuates or increases. Now there’re no financial surprises in the future.

A fixed rate loan is what a fixed rate mortgage is based on. The interested rate that the buyer and lender have agreed upon for the fixed rate loan stays the same for the entire life of the mortgage. The monthly mortgage payments also remain the same. Most of the initial payments will go towards paying the interest. Once that’s paid off, the rest of the payments go to the principal until it’s paid off.

Adjustable Rate Mortgage

With this mortgage loan the interest rate is re-evaluated at different set times during the life of the loan. This isn’t the same as a fixed rate loan because the monthly payments may either increase or decrease after the re-evaluation. The re-evaluation is based on conditions in the current market and the current interest rates offered by the lender.

Mortgage types can be flexible and after your term is up, you can change from one type to another. Adjustable rate mortgages are so popular because your interest rate can be significantly different as the years go by. However, the payments remain stable for the first few years. This type of mortgage loan usually gives a low interest rate to begin with, roughly 2-3% and has an annually or bi-annually adjustment period.

Balloon Mortgages

This type is similar to the fixed rate mortgage. You make equal monthly payments through the life of the loan. By a certain specified period, the remaining balance of the mortgage would come due. A balloon payment would have to be made. You have the choice of paying the balance or refinancing.

Recourse Loans

Vermont is one of 31 states that deal with recourse loans rather than non-recourse loans. Understanding what a recourse mortgage is can be difficult. This type of mortgage allows the lender the ability to take back the property if the buyer defaults. Then, they can pursue the buyer personally for the money owed that isn’t covered by the homes value.

Foreclosure Process

Vermont is very strict when it comes to foreclosure. They continue with foreclosures on the premise that a lender owns the property instead of the buyer. If the borrower reneges on the terms of the mortgage before the loan comes due, they’re no longer allowed in the home. The lender can then put the home up for auction.

By state law, a summons to appear in court must be served to the borrower. They must also be apprised of their rights. At that time, the lender has the right to request a summary judgment. If granted, there may not even be a trial. In Vermont, out of court foreclosure is allowed when it’s not a 2 unit or less home or other dwelling and the owner has one of those units as their primary home. The lender can sell the unit without decree of sale or foreclosure if all conditions are met. Another condition is that the property can’t be sold until at least seven months after the decree of sale is granted.

Here’s how the sale works; within thirty days before advertisement of the sale, a notice of intent to foreclose is sent by registered mail to the home owner. This contains the terms of the mortgage that they’ve failed to honor and the lender’s right to call the mortgage due in full. The letter must mention that the homeowner will soon be receiving a notice of sale within sixty days prior to the sale date.

When the sale date arrives, the buyer can purchase the home, avoiding foreclosure if they pay the amount of the mortgage in full including attorney fees and additional lender expenses. The sale will be held on the property location. The highest bidder gets the property and anyone can bid. If the winning bid doesn’t cover what is owed on the home, then the lender can pursue the borrower for the remaining balance owed. This can be done through a lawsuit.

Vermont’s Legal Guide to Real Estate

Before anyone can make them an offer on a property, the real estate agent is required to give a completed Real Estate Transfer Disclosure Statement which they’ll give to the potential buyer. The seller of the property is the one who has completed this form that includes every item to be sold within the property such as the property itself and the appliances within it. This document should also include hazards or problems with the property, anything that may discourage the buyer from making an offer.

The issuance of variable interest rates for the purchase of property is regulated by Vermont’s Civil Code Provision of the Real Estate Act. That way, borrowers who have been given a large mortgage amount will be guaranteed a fixed rate. This law also doesn’t allow interest to be charged no later than one day prior to the day the mortgage was recorded even if the borrower received the loan ahead of time.

You qualify for both federal and state FHA, USDA, and VA loans if you buy a home in Vermont. If you’re a first time home buyer, you qualify for an FHA loan including below market interest rates. The state also offers loans for people with disabilities or people who care for people with disabilities. There are also loans to help homeowners with their monthly payments. The Vermont Interest Only PLUS loan is for those who qualify. It offers 100% financing for 35 years and you only pay the accrued interest for the first five years of your loan. After the first five years, you begin to pay the principal. Further information on lending can be found through the Vermont Housing Financing Agency.

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