Buying a Home
Simplify Your Home Buying Experience
Buying a home can seems to be an enormous undertaking, be sure to retain
the services of a qualified Realtor. You can trust our Realtors to always
keep your interest first and foremost. As qualified professionals, they’ll
guide you through the entire home buying experience and assist you in
being an informed buyer.
Simplify Your Search
What features do you require in a home to satisfy your lifestyle now
and in the future? Knowing your range of affordability you can explore
your needs from design preferences to neighborhood choices.
Moving Forward
Once you have found the home that is right for you, move forward to present
an offer. This will consist of earnest money to be held in an escrow account
and a written agreement. This agreement will set forth your terms of the
purchase and a schedule of events in order to own the property. This extremely
important document is a legally binding agreement and should be carefully
prepared by knowledgeable Realtors who are qualified to cover all your
interests.
Final Steps
Upon your complete satisfaction, arrangements will be made to attend
a closing. Coordinating the closing will usually be a title company who
has your escrow money in account. After furnishing the down payment and
whatever other applicable fees have been agreed upon prior to closing,
final papers will be signed. The deed and mortgage will need be recorded
in the state Registry of Deeds, and you will be a homeowner.
Rewards
It is highly rewarding to buy, own and maintain your own home. Whether
this is your first home or you have experience with the home buying process,
we can help. When you have the tools at your fingertips, you can be confident
in your ability to search, finance your home, negotiate terms and be prepared
at closing.
Challenges
Purchasing a new home can be overwhelming. Without the right resources
and information, the buying process can be stressful and frustrating.
With our online services, you can avoid the pitfalls. We will be there
to help every step of the way.
Resources
Money Matters – the most important part of financing is your knowledge
of the options available. Consider the following questions as a basis
for determining your financing needs.
How much mortgage can I afford?
What down payment is needed?
What is the difference between pre-qualification, pre-approval and approval?
What interest rates are available?
What is mortgage insurance and is it required?
What type of documentation will I need?
How do15- vs. 30-year terms compare?
What are points and do I pay them?
What is difference between a fixed rate mortgage and adjustable rate mortgage?
What closing costs will I incur?
What is being locked-in?
How long will the mortgage process take?
What is included in a mortgage payment?
What would the payments be?
When would the payments begin?
Make Your Mortgage The Right Fit!
Mortgages to meet everyone’s needs. These summaries will help you
narrow your search.
Adjustable Rate Mortgage
A mortgage, which allows the lender to adjust the mortgage's interest
rate periodically on the basis of changes in a specified index. Interest
rates may move up or down, as market conditions change. The change
in interest rate will result in a change in the periodic payments
due under the mortgage. ARMs are attractive when short-term interest
rates are trending lower.
Balloon Mortgage
Usually a short-term fixed-rate loan that involves small payments
for a certain period of time with the balance due in a single, large
payment at a time specified in the contract. Whenever the balloon
mortgage becomes due, the entire unpaid balance is due. Generally,
the homeowner must either refinance or sell the property.
Buy-Down
The payment of extra money on a loan now so as to provide a
lower interest rate over either a given period or over the life
of the loan. To buy-down a mortgage, the buyer pays additional points
to the lender, which will decrease the interest rate for a specific
period.
Conforming Loan
Conventional home mortgages, first mortgages up to loan amounts
mandated by Congressional directive, which meets the qualifications
for sale or delivery to either the Federal National Mortgage Association
(FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC).
Construction Loan
A structured, short-term loan to provide funds necessary to
begin construction on buildings or homes.
Conventional Mortgage
A mortgage loan made by an institutional lender without the
inclusion of government guarantees such as VA or FHA loans.
Convertible ARM
The convertible ARM is a combination of both fixed-rate and
adjustable rate mortgages, allowing the best of both options in
one package.
Deferred Interest Mortgage
A mortgage in which the payment is not sufficient to cover the
principal and the interest and the payment portion of the interest
is postponed until a certain date at which time the interest postponed
is added to the principle owing.
Federal Home Loan Mortgage Corporation (FHLMC)
The Federal National Mortgage Association, which is a congressionally
chartered, shareholder-owned company that is the largest national
supplier of home mortgage funds. It is commonly known as Freddie
Mac. The company buys mortgages from lending institutions, pools
them with other loans, and sells shares to investors. Detailed information
may be found at http://www.freddiemac.com.
Federal Housing Administration (FHA)
An agency of the federal government, the Division of the Department
of Housing and Urban Development, both sets standards for the underwriting
of private mortgages and insures residential mortgages made by private
lenders.
Federal Housing Administration (FHA) Loans
Federal Housing Administration (FHA) low-rate loans are available
to Americans with smaller incomes who are interested in modestly
priced homes. Down payment requirements are usually lower than the
prevailing ones.
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Federal National Mortgage Association (FNMA)
The U.S.'s largest supplier of mortgages to home buyers and owners,
a corporation established by Congress and owned by stockholders. It
is commonly referred to as 'Fannie Mae,' this government-sponsored
enterprise is chartered by Congress. This federally chartered agency
buys mortgages from lending institutions, pools them with other loans,
and sells shares to investors. Detailed information may be found at
http://www.fanniemae.com
Fixed-Rate Mortgage
The interest rate you pay and the monthly principal and interest
payments are agreed upon from the outset and will not change throughout
the entire term of the mortgage.
Government National Mortgage Association (GNMA)
A government-owned corporation within the U.S. Department of Housing
and Urban Development, it is also referred to as "Ginnie Mae".
This government agency guarantees the payment of principal and interest
on all of its pass-through securities, and its guarantee is backed
in turn by the full faith and credit of the U.S. Government.
Graduated Payment Mortgage (GPM)
A mortgage that usually starts the borrower with low payments
that are gradually increased over five to ten years, before leveling
off for the remainder of the term of the loan until the loan is
fully amortized. Negative amortization usually occurs until the
payment reaches the level payment stage. Usually government insured
loans (VA or FHA)
Growing Equity Mortgage (GEM)
This is a long-term mortgage whereby the borrower agrees to
increase his payment each year by an agreed amount. The added money
per payment is applied directly to the outstanding principal on
the mortgage. The mortgage thereby is paid off in a shorter number
of years.
Renegotiable Rate Mortgage (RRM)
Similar to an Adjustable Rate Mortgage, this type of mortgage
allows the interest rates and payments to be adjusted periodically
according to an index.
Reverse Annuity Mortgage (RAM)
A type of mortgage where the property's equity serves as security
for periodic payments made by the lender to the borrower. Mortgage
is generally paid out upon the sale of the property.
Rollover Mortgage (ROM)
A mortgage where the payments are only guaranteed for three,
four, or five years. The borrower is allowed to refinance at the
end of the term at the interest rate then applicable.
Shared Appreciation Mortgage (SAM)
It is a loan arrangement where two or more parties participate
in the purchase of real estate and share the appreciation and tax
deduction. Similar to shared equity mortgages.
Veterans' Administration Loans
Mortgage loans to veterans by banks, savings and loans, or other
lenders that are guaranteed by the Veterans' Administration, enabling
veterans to buy a residence with little or no money down.
Wraparound Mortgage
A secondary financing option in which a new larger mortgage
is created to encompass the first mortgage. This large second mortgage
is used to preserve the low interest rate on the first mortgage
for a potential buyer.
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Know Your Needs
Drive To Learn
Evaluate as you drive through a community. Consider the following questions
as a basis for determining your location needs:
Where is the nearest shopping center, bus line, police station and Library?
What schools are available and school district are you in?
What types of homes (single family, apartments, condominiums) are in the
neighborhood?
How far apart are the homes?
How far is it to your work?
What community resources are available?
Generally, where are the cars parked (driveways, garages, street)?
Do you notice a lot of noise, traffic or pollution?
Are the homes in good repair and the landscaping well kept?
Finding The Right Home
Keep your eyes open and your notebook in hand as you walk through a potential
home. Consider the following questions as a basis for determining your
needs as a homeowner:
How long has the home been on the market?
Why is the home being sold?
What is the asking price of the home?
Has the price been lowered?
Is the price comparable to other homes in the neighborhood?
What is the down payment required?
Is the house structurally sound?
Is there room enough for the present and the future?
Do you like the floor plan of the home?
What condition is the yard in?
What improvements must be made?
Will the seller repair or replace any items that need repair or replacement?
Think carefully about each house you see and don’t be in a hurry.
Your real estate agent can point out the pros and cons of each home from
a professional standpoint.
The Offer
Making an offer to buy a home entails many factors. You and your Sales
Associate will discuss the following factors prior to putting the offer
on the table:
Amount of earnest money
Down payment
Price you are offering
Details of financing
Proposed move in date
Proposed closing date
Details of the sale
How long the offer is valid
The seller will either accept the offer as presented, or make a counter
offer and ask you to resubmit a proposal. When all the parties involved
have agreed upon the details, initialed any revisions and signed the final
agreement then an offer becomes a contract.
Contract Review
Sales contracts may differ significantly yet all should clearly set forth
the responsibilities and privileges of all the parties involved. It is
a legally binding document that protects each party. Carefully review
the terms of the contract. The sales contract should include the following:
Legal description of the property and the exact street address
Selling price of the property
Amount of earnest money and who is holding it – often it is held
in an escrow account by a third neutral party
Amount due at settlement
Specifics of the mortgage (amount, rate and terms)
Title company – either a title company or attorney must be agreed
upon by buyer and seller
Details of the closing, when and where
Home inspection – to ensure again structural and unknown defects,
to be completed in a specified time period
Inclusions and exclusions - examples would include washers, dryers, drapes,
etc.
Pest Inspection – and who is responsible if there is damage or an
infestation
Warranties – get the description of any that are included with the
house
Repairs – unless you are accepting as-is, state who is responsible
for repairs, with a date for a walk-through inspection
Well and septic – they must past a test, if applicable
Date of possession – when you take possession of the property
Acceptance date – either an acceptance or counter-offer must be responded
to by a specified date
Processing the Sale
Once the contract is signed, your Sales Associate will continue to be
your advocate and ensure that your best interests are served. Some of
the details they will be available to handle are:
Schedule all necessary pre-closing inspections
Check finances are deposited according the contract specifications
Keep you informed of any unseen problems that may arise and offer solutions
Present a list of utility companies available for service
Schedule and attend-the pre-closing walk through
Prepare for and attend the closing
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