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Our Guarantee for a Successful Open House

Category : Fun , Need to Know , Sales

Our Guarantee for a Successful Open House

Thinking of having an open house to get more prospective buyers to notice your property? Think you have it all figured out? Maybe, but just in case, read on.

It’s common knowledge that a house that smells like cookies is a sure fire way to attract interested buyers and set your house apart from the normal smelling house a few streets over having their own open house. Of course, people being able to locate and find your Open House is a given.

I’m here to tell you folks, the days of lighting a Yankee candle that smells like baked cookies and just waiting for the people to show up one after the other are over. It just doesn’t happen like that.

Top 10 ways to have a successful open house

There should be a considerable deal of planning and coordinating to your open house.

I realize that there are many real estate agents these days who don’t believe that open houses are an effective means to marketing and selling your home. I am not going to debate and engage that ideology for the simple fact that having an open house to market and sell your house is a proven and effective means to do just that. I have experienced this first hand on numerous occasions and I am telling you, it makes a big difference between your home and the numerous homes like yours that aren’t having an open house. Year after year, the National Association of Realtors (NAR) shows in their annual report, Profile of Home Buyers and Sellers, that those who are looking to buy a home are finding theirs homes 10-15% of the time through open house events. While that 10-15% isn’t necessarily a staggering amount, it is a significant amount of buyers. Keep in mind, this is only one tool a good real estate professional will use to market and sell your home for you in as quick a time frame as possible.

Before you have an open house, be sure to discuss some of these ideas with your real estate agent.

Market the Open House Event

Yes, this is an event. This isn’t simply a day to unlock the doors to your house, have your real estate agent sit on the sofa with a book and wait for people to stroll by to see what it looks like on the inside.

People have to know about your open house event in order to get a substantial amount of traffic to walk through your front door. Everyone knows, real estate is based on numbers and marketing. If you get a piece of property in front of enough people, someone is going to be interested enough to pay a price you are happy with.

Other than the traditional method of putting out Open House signs in the area, balloons on the mailbox and front of the house there are a few other methods we use to make it more of an event to maximize your houses exposure.

Work with other agents

Talk with other listing agents who are helping owners sell their house in the neighborhood and make it a neighborhood event. It’s all about the traffic. If there are multiple houses in the neighborhood that will participate, make it even more fun and interesting by making a game of it with punch cards and door prizes.

Community Events

Coordinate your open house at the same time as a local community event. This could generate more foot traffic to your home. This works great during community or neighborhood garage sales, grand opening of businesses or local sporting events.

Old School Marketing

There is no shame in using some old school marketing techniques. Door hangers is still an effective method for getting people to hear and spread the word about your open house. People who love where they live, want other people to know about it. Especially people who want their friends to move to their neighborhood and live close by them.

Internet Marketing

Internet marketing is a potentially powerful tool. We have been experts in internet marketing for the past 25 years. If you have someone who knows their way around the internet and knows how to effectively market your property through the internet, there are no other methods more powerful.

Posting your property on Zillow, social media channels like Facebook, Instagram, Pinterest and YouTube are all free and effective methods for getting potentially thousands of eyes on your property and then those thousands of people could potentially “share” your listing with thousands of other people. You beginning to see the potential here?

Think Outside the Box!

Just because everyone has an open house on Saturday and Sunday afternoons, doesn’t mean you have to. In fact, I encourage you to switch it up a bit! Try having an open house in the evening hours, to showcase the sunsets, tiki lamps around the pool. Try having one on a Monday night during Monday Night Football and stage it as a tailgate party to get couples more involved. Thinking outside of the box is one way to separate you from the hundreds of other people all doing the same thing as one another.

Open House Themed Tailgating

Educate Your Sellers

Communication is the key to any relationship, whether it is a personal or a professional one. As a seller’s agent, we believe that setting the proper expectations up front creates the best experience for everyone involved. Be sure to explain clearly to your client that an open house is not a guaranty of a sell, especially on the day of the event. Make them aware of the possible dangers of inviting strangers into their home, by making sure any loose valuables are secured safely. Many times, during an open house event, a real estate agent may pick up a buyer for a different piece of property based on the needs and wants of that buyer. By setting realistic and clear expectations of an open house event, everyone should walk away feeling like winners.

Nosey Neighbors are the Best

Successful Open House for Real Estate

You’re sitting there at your open house, and the only foot traffic you are getting so far are all of the nosey neighbors coming by to look at the house and the updates they have been wondering about for months now. Some may see that as an annoyance and frustration, but you can use this to your advantage and turn it into a positive. All of those nosey neighbors can actually help you sell that house. When they go back home and run into their friends and talk on the phone, they will;l be talking about how great the “Johnson’s” old home looks that is now for sale. They will be telling their friends and possibly even family members how they could buy the home and live close enough to hang out during the day and walk the dogs in the evenings together.

You may even consider having a neighbors only preview and start the Open House an hour early by passing out a few flyers to the surrounding neighbors as an invitation only.

Keep the Valuables Safe and Away

Unfortunately, not everyone who comes to an open house is there to see the house for sale, but to actually “case” the house for a potential burglary mark. Educate your seller about the importance and need to tuck and secure any valuables away that could easily “walk off”. This of course would include, but not limited to jewelry, small family heirlooms, prescription drugs and of course, money.

Keep valuables safe during an Open House

Get Those Digits and Email!

Sign in sheets may be good in a pinch, but how many times has a Real Estate Professional looked over their sign in sheet to see that some very famous people and cartoon characters were there at the Open House. Sadly enough, some people just don’t want to share their information and of course some do it just to be silly.

Try being more creative with a door prize that will be giving away a day or two after the Open House or using an app to have the potential clients sign in and register with upon arrival.

Getting the visitors sign in information could turn them into a future client even if they do not feel a connection with the home you are currently showing.

Plan Ahead and Be Safe

Sitting at an Open House alone is not necessarily a bad thing nor is it unsafe. That being said, it may be a good idea to have someone join you for your Open House just to be there with you. Safety is always better in numbers. If you really want to be creative, bring along one of your favorite Lenders to join you in the event you so your potential customers can talk with and ask questions about their financing needs and situation.

This is your Open House and it could very well be the 2-3 hours you need to sale that house. Treat it as though it is going to happen and market it like it is the best house in the neighborhood.

Brevard County Realty

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How To Negotiate Multiple Offers

Category : Need to Know , Sales

As a Realtor, working with both Buyers and Sellers in the rebounding Real Estate market can be challenging at times. Selling your home or buying a property can be one of the most important decisions and transactions in your life. As a licensed Real Estate Agent, I take my responsibilities very seriously by studying negotiation strategies that will put my Buyers or Sellers in the best possible situation to complete a transaction on a deal.

space coast real estate tips and strategies

I have outlined 12 Simple Tips for handling multiple offers at once.

1. Contingencies Should Be Your Last Option
Do not automatically go to or consider a contingency. Only consider a contingency offer for the sale or lease of your property unless it is absolutely necessary. A financing contingency may be a prudent idea when you have another piece of property to sell.

2. Go In Strong!
When you find a home or piece of property that you really want, you have to be assertive and go in strong sometimes. If a property is receiving multiple offers, go in strong with your best offer! It is your objective to get that house and close on that transaction! Going in strong and to the point with your best offer, lets the person on the other end of the transaction know you are serious and if it is a strong enough offer, they will accept it. They too want to get this transaction to the closing table as quickly as possible!

3. Understand, There Will Likely Be A Counter-Offer
Be aware, that even going in with a strong offer on a property, if the seller’s agent is doing their due diligence, almost all offers will include a counter-offer. Knowing this ahead of time should save you any surprises and frustrations with a strong first offer.

4. Find Out Where the Seller Is and What They Really Want
Knowing the situation of the seller and what they are genuinely after in regards to an offer can save you and the seller a lot of time and head aches with offers and counter-offers. Sometimes this information is easily obtained, even through the seller’s agent.

5. Show Your Buyer’s Funds Credentials
If you want to make a solid impression with your offer, send in a verification of funds letter with a cash offer. If financing, send in a strong pre-approval letter or an underwriting approval letter which carries a good bit more weight than just a pre-approval letter.

6. Make a Strong Impression with Earnest Money
Let the seller know how serious you are about purchasing the property by putting down a considerable amount of earnest money along with an underwriting or pre-approved financing letter. By putting up $10,000 or more for earnest money where others are putting up $5,000 or less will certainly set you apart from the rest of the multiple offers being considered. All of that earnest money goes towards your down payment, so if you have the cash to put up, always put your best foot forward and set yourself apart from the rest.

7. Don’t Ask For Part of Your Closing Costs To Be Paid By the Seller
In a hot market with multiple offers, the sweeter you make it for the seller, the better chances your offer is going to be the one accepted. The seller is going to be looking at his bottom line just like you are. The more money in the sellers pocket at the end of the transaction, the better your chances are of getting your dream home! Do not ever let closing costs be the reason you lost your perfect home to another buyer!

8. Don’t Ask For Everything!
One of the surest ways of losing out on a contract with that perfect home you have been looking for is by getting greedy when it comes to the contract. Unnecessary things like personal property requests (flat screen televisions, refrigerators, washer and dryers and furniture in general) termite bonds, home warranties, etc…, will kill a contract before it even gets started. The more simple and attractive to the seller, the more likely your offer will be the one accepted over the other complicated offers.

9. Give the Sellers a Chance to Move
By allowing the seller a few extra days after the closing to pack up and move is a good way to show the seller you are going to be someone easy to work through the closing process. As anxious as you are to get into your new house, give the previous owners a little breathing room to move out. Little things like this can go a long way in weighing whose offer to chose and whose to put at the bottom of the pile.

10. Communicate Clearly and Quickly
There is a reason I saved this tip as the last. Probably one of the single most important tips anyone who is going into a home purchase can have. Communication is key is not just a cliche. Good, clear and prompt communication can save a transaction from disaster most times than not. If there is a counter offer, be clear and expedient to your reply. Again, this could be lone factor on whether or not your offer is pushed through or not. If the seller is waiting around for you to respond, he is going to quickly start to think of the other multiple offers being presented to them on a daily basis. Be smart and prompt!

No single transaction is identical to another. Each person involved in any kind of real estate deal has their own personalities and working with different types of people require different types of approaches. Being able to be flexible and compliant to the needs of the seller is key to making any real estate purchase a smooth one!


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5 Reasons Home Sales Fall Through

Category : Sales

I’ve seen it time and time again, you get your home under contract and for one reason or another, the contract fails, and you are forced to put your home back on the market. It can happen right after you go into contract, and it can happen at the closing table. The reasons vary from underwriting not giving final approval, poor inspection, the buyers simply changing their minds to the survey coming back with surprises.

My best advice to anyone selling your home is to be prepared for anything and be willing and flexible to work around any issues that arise.

I have always believed that knowledge is power! If you are educated then you are better prepared for what may lie ahead. The easy part is finding someone interested enough in your home to make an offer on it. Then, negotiating a fair price everyone is happy with and the details of how the sale will play out with the details of the contract. Like I said, that is the easy part. The hard part is keeping the deal together and getting everyone to the finish line when the title and deed legally exchange hands.

There are so many little to big things that can kill a deal. I am going to go over 5 of the most common reasons a home sale falls apart.

1. Buyer Financing

If a buyer’s credit score and income to debt ratio numbers look good, they are in the ball game when it comes to obtaining financing for a mortgage on your home. Try to focus on Buyers who have been pre-qualified, or even better, pre-approved for a mortgage by a lender. There is always the chance that the underwriting will reject it during the process, but these Buyers have a higher chance of getting through the process and making it to closing.

Another good tip for Sellers, is to keep in touch with the buyers agent and make sure the process is moving along smoothly to avoid any last minute surprises.

2. Low Appraisal

If your home does not appraise for the selling price you and the Buyer have agreed on, then this could be a deal killer. For those buyers who are getting financing to purchase your home, their lender will only lend up to the maximum of the appraised value of your home. So, if the home appraises lower than what your have sold it for, the buyer would be forced to come up with cash to make up the difference at closing.

If the buyer can not afford to or be able to come up with the cash for closing then one of two things will happen. One, the deal will be killed and you will be forced to find another buyer and rethink your asking price for the home. The better alternative is to simply lower the selling and agreed upon price of the home so that the buyer will be able to get lending approval for the sales price of the home.

You can always request a second appraisal, but this typically will come out of your pocket and there is no gauranty that the second appraisal will come in at a higher price. In fact, the second appraisal could come in at a lower price.

3. Home Inspection Surprises

The main purpose of the home inspection is to protect the buyer from purchasing a property with major flaws that need replacement of repairs. The main areas of concern are the roof, electrical, plumbing and WDO (wood destroying organisms).

As a seller, it is a good idea to always know the condition of your home. Once you have decided to put your hoise on the market, it may not be a bad idea to invest in a home inspection. You can identify and issues before putting it on the market, and then use that as an added bonus to potential buyers as a courtesy.

4. Buyer’s Remorse

This is one situation where, as a seller, you really do not have much control over at all. For the buyer, purchasing a home can be a very stressful process. The deed of searching for the one perfect home alone is enough to stress out a buyer. Then factor in the process of getting approved for a mortgage, paying a large amount of money for a home and knowing they are tied down for up to 30 years. It is more common than most would think for people to simply, “back out” of a sale due to buyers remorse.

My bedt advice for a seller to avoid buyer’s remorse, is to as best as you can vet your buyers. Try to accept offers from those who seem confident and enthusiastic about purchasing your home. One way of doing this is by the amount of the escrow deposit they offer. If they are offering less than 1% of the sales price as escrow, request a higher amount to ensure they are “bought in” and more obligated to carry through to closing.

5. Buyer Must Sell Their Home First

It is very common for a buyer to make an offer to purchase your home, with the contingency that they must sell their home first. In these situations, the buyer needs the equity out of their own home sell in order to afford to purchase your home.

This is especially risky to the Seller, because, once you have accepted the buyer’s terms and gone into contract, your house essentially comes off the market to other potential buyers. If the buyer’s house sale falls through for any reason, this will delay the closing of your home for that much longer.

There are a couple of easy ways to avoid this. The first, and most simple is to not accept offers form buyers who require a contingency to sale their home first. Focus only on those buyers who are ready to purchase your home now.

The second way to avoid this situation is, if you have a buyer that does need to sale their home first, and you accept their terms, be sure to add a “kick out clause” addendum to the contract. The “kick out clause” gives you, the seller, the option of accepting a more qualified and ready buyer would one come along. You then tell the original buyer, they have “X” amount of time to either sale their home, release their original contingency for their home sale, or their contract is null and void. This allows you to go into contract with a buyer who is ready and willing to close on a specific date.

Talk to your licensed Realtor about these things before putting your home on the market to avoid those last minute surprises that could kill the deal and put you back at square one when selling.


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Norris Real Estate Brevard County

Stay Sane While House Shopping – Quotes to Live By

Category : Sales

It can be the most exciting of times and it can be the most frustrating of times. Keep these quotes in mind when the shopping gets tough.

Searching for that perfect property that is to become your next home. For some, it is the very first home purchase. This makes it a little extra special. For others, it may be their retirement home, the last home they will ever live in. Again, it is special. Even for those who may be purchasing a second vacation home, or their third or fourth property purchase. It’s always special.

It can however, come with it’s frustrations. Misleading listing from an un ethical listing agent. House prices getting too high. Going through the financing and mortgage process of being exposed for every bad financial decision you have ever made. Poor inspections and losing that dream home to a higher bidder.

While you are riding the emotional and sometimes exhaustive roller coaster of purchasing a new property, here are a few quotes that will help keep you in the right frame of mind and sane through the end.

“Home is the nicest word there is.” — Laura Ingalls Wilder

Home is where the heart is. This goes far beyond just words. You want to be happy, safe and secure where you lay your head at night.

“It is not the beauty of a building you should look at; it’s the construction of the foundation that will stand the test of time.” — David Allan Coe

Beauty truly lies in the eyes of the beholder. While updated floors, granite counter tops and upgraded fixtures and appliances are nice to look at, it is the “bones” and basics of the home that matter the most!

“Patience is bitter, but its fruit is sweet.” — Jean-Jacques Rousseau

There is always that one couple or person who tells everyone about how he found his perfect dream house on the first weekend out with his Realtor. The very first house they looked at and it was like fate, the perfect home.

Let me tell you now, that would be a magical moment, because it never happens like that. Purchasing a home is as much an emotional decision as well as a fiscal one. It is a lot like falling in love. You have to “know” it when you see it and walk through it. You have to look at several homes before you “meet” the one that you know is meant for you.

“The root of suffering is attachment.” — The Buddha

When purchasing a new home, you must go into the process of knowing the home is not yours until the closing is complete. There are so many things that could go awry during the process. You have to remain somewhat detached until the ink is on the paper

“We shape our buildings; thereafter they shape us.”Winston Churchill

Your home is your castle and it should reflect your personality and style. The colors you choose, the layout and flow of your furniture will effect the mood and energy in your home. Is your home dark or does it have lots of natural light? Only you can answer what is best for you, but it will help shape you.

“You can’t depend on your eyes when your imagination is out of focus.” — Mark Twain

Remember, this will be your home, but right now it is someone else’s. Look past the white walls, the cluttered kitchen counters and the outdated mismatched furniture. Imagine your style, furniture and personality in the rooms. You’ll be surprised at how much better the home looks in your mind.

“Home is wherever I’m with you.” — Edwin Sharpe and the Magnetic Zeros

Remember what I said earlier? Home is where the heart is. The house, when it comes down to it, is really just a living structure. The HOME is what you put into it with those who matters most in your life. Even if you live alone, a home is made up of friends and family who spend time there.

Your new home is going to be so much more than just where you hang your hat, it will become a part of who you are and how others see you. Embrace your home and make it yours!


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Norris Real Estate Brevard County

6 Must Have Documents For A Mortgage

Category : Loan Mortgage , Sales

So, you’re in the market to purchase a home. Whether this will be your first home purchase or this is one of many you have purchased, you still have a list of requirements from your lender. Unless of course, you are purchasing with cash.

Lenders are like the cynical grandmother. They want proof for everything. If your credit score is as good as it gets and you have tons of money in the bank, you are still going to be required to provide a plethora of information to your lender.

To make the process much smoother and less stressful for you the buyer, here are a few of the “Must Have” documents you will need to get your financing processed for your new mortgage.

Getting a mortgage without documenting where your income comes from is a thing of the past. History shows that borrowers who do not or can not prove their income sources are those who are most likely to default on their mortgage.

So, if you plan on getting a mortgage for your dream home, then here are 6 documents that you must have and provide to your lender.

1. Last Two Years Tax Returns

Your lender is not going to simply take you at your word that you made a million dollars last year. They want hard, documented proof that you make what you claim you make. This is to ensure that you can afford to pay your mortgage amount every month and avoid going in default for your loan. The longer you can establish a stable and adequate salary history, the more confident your lender is to release funds on your behalf. Thus the reason for at least two years of your Federal Income Tax returns and W2 forms are required.

If your income has recently changed, your lender may require additional documentation to support and justify the change in salary.

2. Pay Check Stubs

In addition to your last two years of income tax returns and W2 forms, your lender is going to require that you provide a history of your pay check stubs to validate your current income. They want to know what your income has been for the last couple of years, but they also want to know what your current income is to show you can afford your mortgage.

3. Other Income

Not everyone works in a job that provides pay stubs. Some people are self employed or have another source of income, then you may be asked to provide documentation to support. Banks statements, letters from the source of income and 1099 forms usually suffice for that type of documentation.

4. Letter from Employers

You may be asked to provide a letter directly from your employer verifying income, hire date and position. This is a normal request form most lenders. The letter must come directly from your employer to the lender. You can not be the “middle man”. So, make sure up front that your company’s HR department is capable and willing to do this for you.

5. Proof of Funds

Once your lender has adequate information from you that not only can you afford to purchase the home and have enough income to maintain that home and the mortgage, they may require a “proof of funds” letter from your banking institution or investment firm to show that you are poised to pay closing costs and your down payment, while still having enough funds to handle a “life emergency”. If you received a “gift” from a family member for closing costs or the down payment, be prepared to ask that family member to write a letter stating that they have “gifted” you the money and do not require you to pay it back.

6. Photo ID

As silly as this may sound, if you are planning on getting a mortgage for a home, be prepared to have a government issued photo identification to provide to your lender.

I realize that not every one drives, and therefore does not own a drivers license. However, a state or government issued id card, passport or military identification will suffice.

You lender wants to verify that the person applying for the mortgage is the person they are lending funds to.

Each lender has their own set of requirements and policies regarding documentation and requirements. These documents and items we have discussed here is very typical of all lenders.

If you have any questions or concerns, contact your Buyer’s Agent to guide you through the process with your lender.  If you do not have an agent to assist you, we are always available to help!

Brevard County Realty

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Norris Real Estate Brevard County

Which Home Mortgage is Best For You?

Category : Sales

When it comes to purchasing a home, unless you are paying cash or inheriting a long lost relatives estate, you are going to need to get a mortgage for your new dream home.

The next question of course is, which home mortgage is best for you?

Fortunately, for the home buyer who is seeking a loan for their mortgage, there are several products out there that can fit the needs of just about every buyer there is.

I am going to go over the most common products here.

Conventional

This loan program is ideal for the buyer who has good or excellent credit. Typically, a minimum of 5% down is required and that amount can vary depending on the price of the home.

A conventional mortgage is fairly simple and follow somewhat conservative guidelines regarding a borrowers credit rating, down payments and debt-to-income ratios.
(an individuals debt-to-income ratio is a percentage of their monthly income compared against their monthly revolving expenses such as rent or mortgage, car payments, student loans, credit card payments and child support, as a few examples)

The cost of a conventional mortgage includes closing costs, down payment for the property, mortgage insurance and then the closing costs.

Want to know more about closing costs and how to save money?

The good thing about a conventional mortgage is that there are generally fewer hurdles the buyer has to jump through to get to closing than if they were to choose and FHA or VA mortgage.

The negative about a conventional mortgage is that you will need excellent credit to qualify for the better interest rates.

FHA

An FHA mortgage is a home loan that is backed and insured by the Federal Housing Administration. In essence, this is a government loan. An FHA mortgage is designed to protect the lender, not the borrower, in the event the borrower defaults on their mortgage. By using an FHA mortgage, this assurance of a government backed load, or insured loan, enables the lender the options of providing more options and benefits that would not be otherwise available if choosing a conventional loan.

VA

Somewhat similar to an FHA mortgage, an VA mortgage or Veterans Affairs mortgage is a loan program designed and offered to those men and women who have served in the U.S. military. A VA mortgage is also a government loan.

Norris Real Estate Brevard County

To qualify for VA mortgage, a person must:
Served 90 consecutive days of active duty service during wartime.
or
Served 181 days of active duty service during a time of peace.
or
Have served more than 6 years in the National Guard or Reserves.
or
You are the spouse of a service member who has died in the line of duty or as a result of a service related death or disability.

Jumbo

A Jumbo mortgage is also known as a nonconforming loan. A Jumbo mortgage has the advantage that is allows the borrower to receive a loan that would exceed the typical Fannie Mae or Freddie Mac loan limits. A Jumbo mortgage typically requires a a higher credit score, somewhere in the neighborhood of FICA 720, but the downpayment amount may be a lesser percentage than the typical conventional loan requirements. For a Jumbo mortgage, the buyer should be prepared for and expect additional fees and more restrictions due to the higher loan amount.

Non-Conforming

A non-conforming loan is a mortgage that would not otherwise be eligible for resale to Fannie Mae or Freddie Mac programs due to the nonstandard conditions and features of the loan. Non-conforming mortgage are more than likely and often sold to a secondary market and private investors and sometimes held in the lender’s portfolio as a asset.

Non-Prime

A non-prime is a term used to describe and identify those loans that do not typically fit within the standards and policies of a government lending standards commonly referred and know as Prime, Agency or A-Paper Lending and defined as Qualified Mortgages.
A Non-Prime loan are also commonly referred to as temporary or fixer-loans for those borrowers who are not yet able to qualify for a Prime loan. Those borrowers who have credit issues, foreclosure(s), bankruptcy(ies), short sale(s), late payments, slow payments, collections, charge offs and situations similar to those. A Non-prime loan will typically have a higher interest rate and higher or additional costs associated with the loan. A Non-prime loan should only be considered by those who are looking for a temporary solution to their current financial situation.

Fixed Rate Mortgage

A Fixed Rate mortgage is a mortgage loan that has a set, predetermined and fixed interest rate for the entire term of the mortgage loan.

Adjustable Rate Mortgage

An Adjustable Rate mortgage, also commonly referred to as an ARM is a mortgage loan that has an adjustable interest rate. An ARM is also commonly referred to as Variable Rate mortgage. This will create a mortgage payment that will vary periodically during the life and term of the loan. The amount of the interest rate, and the resulting mortgage payment will vary and depends on the fluctuation of an index factor. An Adjustable Rate mortgage will allow a lender to typically charge a lower interest rate at the beginning of the mortgage term, to make the product more attractive to the borrower. There is almost always a rate cap to protect the borrower from exceedingly high interest rates along the term of the loan.

Always consult with your lender for any questions regarding the loan or mortgage process.