Home Mortgage Rates in Vermont
Vermont Real Estate Prices vs. National Averages
Vermont real estate prices are slightly higher than the national average. Homes, in some instances, may cost more than comparable homes in other parts of the nation with equivalent square footage and more amenities.
Popular Cities in Vermont to Purchase Real Estate
Vermont is one of the smaller states by land mass in the United States. In fact, it is ranked 43rd in the United States. Not only is it one of the smallest by land mass, Vermont is second only to Wyoming as the least populated state in the country.
Vermont has a median income in the mid $48,000s and has a large population of college educated individuals. Most of its residents are employed in government, real estate and health care.
Maple syrup and wine are two of the great commodities produced in the area. Fourteen wineries are available in the area and a quarter of the country’s maple syrup is produced in Vermont.
In 2007, Vermont placed 17th in mortgage affordable. Although housing sales have declined, real estate prices have fared better than some other harder hit parts of the nation.
Burlington is a popular city to purchase real estate, as it is the fastest growing city in Vermont. However, the area has only increased by approximately 370 households in the last 10 years. The area is home to approximately 40,000 individuals. While this is the most populated city in the state of Vermont, it is not the capital. The capital of Vermont is Montpelier, which is one of the least populated capital cities in America.
The real estate in Burlington is a mixture of country style homes and modern homes. The prices range from low $100s to $600K. Some have lake and garden views, contemporary features, such as granite counter tops, glass showers, tile inlays, and bamboo floors.
Rutland is the second fastest growing city in Vermont and is home to approximately 16,800 residents. The growth in this area is in part due to the resort community. Many people come to Vermont to experience the Okemo Resort, Killington Mountain Ski Resort, and Quechee Gorge.
Real estate in Rutland ranges in price from the low $100s to $500K. The homes are mostly New England style country homes. Some feature modern amenities, but most are standard. Most of the homes on the market are older homes. Since the population is small, there are only approximately 40 recently added homes on the market and 400 in total. However, the city is still growing.
Many of the homes for sale were built before the 1950s; therefore, they are more traditional like the Victorian style homes. Many of the homes have more rooms than the average home buyer would receive in a more modern home for less money. Therefore, if the consumer enjoys the style of that era, this may be a great place to purchase a home.
The home prices range from the low $100s to $400K. In some instances, a potential home buyer can find a 5,500 square foot Victorian Style home with seven bedrooms and 4.5 baths for less than $200K. A home of this type is typically built in the late 1800s or early 1900s.
The capital of Vermont is home to approximately 7,800 residents. Because of its small population, Montpelier has won the award for the smallest capital city within the United States. The New England Culinary Institute is located in Montpelier, as well as, galleries, theatres, and museums.
The median price of homes in Montpelier is $220,000, and the median sale price is approximately $247,000. Most of the homes are single family homes and a few are condos. There are not many homes on the market in Montpelier. However, consumers may still find a good buy.
National Rates vs. Vermont Rates
Vermont mortgage rates typically are quite close to the national average.
Types of Mortgages Offered in Vermont
The types of mortgages offered in Vermont are Fixed Rate, Adjustable, and Balloon Mortgages.
Fixed Rate Mortgage
The fixed rate mortgage allows the consumer to keep the same mortgage rate throughout the duration of the loan. For example, if the consumer purchases a home with a 4.8 percent interest rate, the interest rate will remain the same over the duration of the loan. If the interest rate increases a point within the 15 or 30 years, the consumer's monthly mortgage will not increase because the interest rate is “fixed”. Most mortgages in Vermont are fixed.
Adjustable Rate Mortgage
The adjustable rate mortgage changes with the Federal Reserve Rate each month. The consumer’s lender will adjust the consumer’s rate accordingly. The interest rates for adjustable rate mortgages are typically lower than the national average. However, the consumer can expect that the rates will increase at some point during the duration of the loan. If this happens, the monthly mortgage may increase unexpectedly. At this point, the consumer may experience difficulty meeting their mortgage obligations. Many consumers lose their homes when this happens. Adjustable rate mortgages are recommended for investors.
This type of mortgage is typically reserved for commercial real estate, rather than residential real estate. Balloon mortgages in the introductory period are similar to “fixed” loans for a specified amount of time. After a fixed rate period of 5 or 7 years, the loan amount must be paid in full or refinanced. Many consumers must refinance, because consumers cannot afford to pay off the entire loan in one payment.
Refinancing is a way to save the home during the redemption period. A borrower is allowed to refinance during a redemption period without penalty. The cost of refinancing is often greater than the savings. The consumer should assess their personal financial situation prior to refinancing.
Any home equity that the buyer has accrued will be the borrowers after the loan amount and liens have been paid in full. If the borrower owes more than the home is worth, then the borrower can attempt to negotiate with the bank for a short sale.
Second mortgages can be helpful if the borrower needs home improvement or to pay off bills. Second mortgage rates are often lower than interest rates on credit cards or other loans, and they are also tax deductible. Consumers need to be aware of laws associated with second mortgages. For instance, some states require the borrower to have equity in their homes and some do not. Individuals should be aware of the laws prior to purchasing.
Type of Loans
Unfortunately, due to the current state of affairs in the United States, many Americans are experiencing foreclosure. Therefore, the consumer must know the type of loan they possess before they reach the foreclosure process.
Most first loans are non-recourse loans. If the lender forecloses the property due to non-payment of the loan, the consumer is not liable for any outstanding debt after the lender assumes the property. If the lender cannot sell the property for what is owed, the debt becomes the lender's liability. The lender's only recourse is to seize the property.
A recourse loan is a type of loan that is not based upon any collateral. If the borrower or consumer does not pay, then the lender simply takes ownership of the property. A recourse loan requires the seller to be responsible for any amount owed on the property after the lender sells the property. If the owner owes after the sale of the property, the lender can seize other assets, garnish wages, or take other actions to recoup the loan amount. Some banks allow the first loan to be non-recourse and subsequent home mortgage loans will be recourse.
Recourse loans are riskier than non-recourse loans in the foreclosure process because the consumer may still be liable for a debt through a deficiency judgment. The consumer may not be in possession of the property, but still have to make payment on a property they do not own.
In Vermont, the foreclosure process allows for both judicial and non-judicial types of foreclosure. Non-judicial foreclosure involves an attorney informing the debtor of the lender’s intent to sell the property to recoup losses. An auction may be held in this instance. Non-judicial foreclosure involves a court proceeding to sell the foreclosed property.
The minimum number of months for foreclosure is 7 months, and it is expected to take 10 months. A borrower can sell the home during a redemption period, if the borrower cannot meet his or her obligations. If the consumer chooses this option, the consumer can keep any profits after any liens and the loan are paid in full.