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Brooklyn homes without New York prices

Set in the south of Baltimore, Brooklyn is a neighborhood that suggests the same diversity of population and opportunity as the famous Brooklyn, NY. Set comfortably in the city close to Anne Arundel County, Brooklyn is known for its friendly ethnic enclaves and its proximity to Baltimore's Brooklyn Park. Brooklyn offers walkability, the convenience of inner-city transportation, and low-cost housing, making it a great destination for those looking to live well on a budget.

A smaller version of Brooklyn, NY

A historic area with a bustling center

Brooklyn, Maryland, is a prime example of a small city vibrant with young life. Currently on the rise, many young singles have been drawn to the location as a place with great intercity transportation and a calm atmosphere to balance their hectic lives. Not only this, but the small city also offers a plethora of restaurants and activities within easy walking distance. It is also close to many major hubs of Baltimore, offering big city amenities with all the benefits of a small community feel. There's no better time to get in on the action—don't wait until prices skyrocket.

Opportunities for everyone in Brooklyn

Foreclosing homes mean good things for homebuyers

While homes in Brooklyn may be limited, there are currently a ton of foreclosures. According to Zillow, there are approximately 81 foreclosures in the area. So what does this mean for your homebuying process? Rather than only looking at the pre-built homes, foreclosures offer creative freedom. You can build your new home yourself or update one that's been in the dumps. Because it is such a great location, taking advantage of these foreclosures is extremely important. With such a rich neighborhood history, ethnic diversity, and all the amenities of a big city, Brooklyn is sure to be a perfect destination for a first-time homebuyer.

Common Questions About Buying a Home in Brooklyn

All The Answers You Need to Settle Down Sooner

Should I choose a fixed or adjustable rate?

It depends how long you expect to stay in the home. Adjustable rates are good for people who may not be in the home long, whereas fixed rates are ideal for people who are confident of settling in.

Do I need a home appraisal?

Probably—in most cases, the homebuyer must use an appraiser to evaluate the value of the home. Appraisal costs vary depending on the value of the property, as well as the state the house is in. Buyers cannot choose their own appraiser—the bank makes the decision.

What is PMI?

Private mortgage insurance (PMI) is required when a homebuyer makes a down payment of less than 20%, or when a borrower refinances with less than 20% equity in the home. PMI fees vary according to your down payment and credit score, and adds a premium to your monthly mortgage payment. Please note, PMI is tax-deductible in 2015 and 2016 for certain income brackets.

What does Loan-to-Value mean?

Loan-to-Value (LTV) is the percentage of your home’s value that your loan represents. When refinancing, the calculation is simply the loan amount divided by the appraised value. When buying a home, the LTV is found by dividing by either the purchase price or appraised amount, whichever is lower. When the LTV is less than 80%, the lender generally requires PMI.

For example:

Purchase price: $100,000
Down payment: $15,000
Loan amount: $85,000
Appraised value: $110,000
LTV: $85,000/$100,000 = 85%

What are closing costs?

Closing costs are standard fees associated with a real estate transaction. You will typically pay about 2-5% of the purchase price in closing costs—the exact amount depends on where you are buying (or refinancing), as well as number of extra fees involved in your particular transaction. Earnest charges no lender fees, so the borrower is only responsible for 3rd-party fees.

What should I consider before refinancing my mortgage?

Refinancing your home loan is an attractive option when rates are low. A simple rate and term refinance can help you lower your monthly payment and potentially eliminate your PMI premium, as long as you have built up enough equity in the home. You might also use a cash-out refinance to access some of the equity you’ve built up in the home (which may result in a higher monthly payment on your new loan).

However, keep in mind that refinancing a mortgage does involve several fees (closing costs). Before refinancing, you should calculate the ‘break-even’ point at which your refinanced loan makes up for the closing costs. If you plan to leave your home before this time, it’s better to stay with your current mortgage.

Knowledge Is (Buying) Power

Further Resources from the Earnest Blog

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The intelligent home loan

When it comes to finding the right home loan, Earnest works hard to ensure that the process pain-free. We use an industry-leading and intuitive online-only application (meaning most times no scanner or fax machine required), a 5-star client service team, and a unique rolling pre-approval that stays current while you track down that perfect home. At Earnest, the home loan process is like no other.