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Buying a house in Port Tobacco

Port Tobacco is a historic village community situated on the Port Tobacco River. Settled in 1634, it served as the seat of Charles County for over 100 years. Its incredible history is filled with heroes, villains, and a host of secrets. Contemporary residents enjoy its close proximity to shopper-friendly La Plata, while history aficionados enjoy unraveling the mystique that surrounds the town itself.

Civil War history of Port Tobacco

Civil War history adds to mystique of classic homes

Remnants of a rich and vibrant Civil War history linger in Port Tobacco, which contributes to the allure of the town for new residents. There is an historic graveyard, an Episcopal Church, and a one-room schoolhouse. Additionally, homebuyers will find many historic homes, recognized by the national historic register available for purchase in Port Tobacco. With its close proximity to La Plata, count on newer construction homes to be for sale. The newer homes in the area are quite luxurious, and come complete with standard amenities as well as luxurious add-ons. Prices of homes in this area cost around $300,000 and up. Spacious interiors with vaulted ceilings await the buyer with glamour on his or her mind.

Quality of life

The Port Tobacco lifestyle is easy-going

Guided walking tours are the daily ritual of Port Tobacco. Although most residents have cars, it is not uncommon to see residents taking leisurely walks in the town center. Family-centric, Port Tobacco is the type of community that meets the needs of families. Boat aficionados will enjoy that there is a marina in town from which residents can sail out onto the scenic Maryland waterways. There are several public schools in the surrounding areas, and two private schools immediately in, Port Tobacco. While Port Tobacco is rural for them most part, it is also a semi-suburban place that residents are proud to call home. Many residents work in nearby Washington, D.C., commuting via car and local beltways.

Common Questions About Buying a Home in Port Tobacco

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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