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Home Buyers
Essential steps every first-time buyer should know
To prepare to own your first home, you should educate yourself about the home buying process. You can take a class or pick up books from the library. Also, read the real estate sections of your newspaper and consumer magazines.
Here are some things you will want to do:
Ask lots of questions
Learn what questions to ask where and when to ask them. When you are interviewing real estate agents your list of questions will be different than those you ask when shopping for a lender.
Prioritize your criteria
Think about what you want and what you need in a new house and prioritize your list.
Study a variety of mortgage choices
Study the available loan options and decide which is best for you. You may want to interview several lenders to learn about the many mortgage products available.
Get pre-approved before you house shop
Get pre-approved for a loan before you start looking for a home so you know how much you can afford to pay. Lock in your interest rate, once you are actively house hunting (if it’s a good one). This will speed up the closing process.
Work with your agent
After you decide on a home, work with your agent on a purchase offer. You should ask your agent for a market analysis to find out what similar homes are currently selling for in your chosen area. Both you and your agent should style the sales contract to suit your needs.
Posted: May 11th, 2007 at 1:17 pm
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Home Buyers
Finally the time has come! You will be joined at settlement by your attorney or title company representative, the listing and selling brokers, and all owners. The attorney will have reviewed the title, provided title insurance, and obtained old and new lender information.
After all issues are resolved the attorney will explain the following:
Deed of trust or mortgage
Deed of trust note or mortgage note
VA, FHA, or lender forms
Settlement sheets
You and the seller will then sign all necessary documents. You will also pay the balance of the down payment and buyer’s closing costs with a cashier’s or certified check.
Open Look At Closing Costs
Prior to settlement, you will be given an estimate of closing costs by the lender under the Real Estate Settlement Procedure Act (RESPA). In addition, the lender will require an appraisal fee and a credit report fee in advance of the settlement.
Closing costs can average between 2% and 10% of the sales price. Closing costs usually include the following:
Owner and lender title insurance
Loan origination fee
Attorney fees
Mortgage insurance premium
Recording fees
County tax stamps
State tax stamps
Survey fees
In particular instances, some of the closing costs may be paid by the seller. This is mainly true for new housing, where the seller is the builder.
Other expenses which aren’t required to be listed under the law may also have to be paid at closing. These expenses will include the advance deposits held in escrow for real estate property taxes and insurance. The lender collects a fraction of these monthly and then pays the insurance and taxes when they are due.
Your closing cost may be expensive. Keep in mind that some of the items are tax deductible. The loan origination fee, prepaid interest, and property tax adjustments may be such items.
Congratulations
Once the house keys are transferred, you are the proud owner of your new home. Congratulations and enjoy your new home.
Posted: May 11th, 2007 at 1:15 pm
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Home Buyers
Recommend first steps for buying a home
Before looking at houses for sale, be sure you do some “research.” Here are some of the questions you’ll need answers:
Check out interest rates
What are current interest rates for 15 year and 30 year fixed rate mortgages? Also, for 1 to 3 year and 5 year adjustable rate mortgages?
Shop for the best loan
Which form of loan is best for you? Will you be in the house several years and benefit most from a long-term fixed rate, or do you want a lower, short-term rate because you plan to move soon or expect your income to increase significantly over the next few years?
Determine how much house you can afford
How much of a mortgage can you qualify for? The loan amount plus your down payment tells you how much house you can afford.
Investigate neighborhood prices
How much are the other homes in the neighborhood selling for?
Separate needs from wants
What priorities do you have for your next home? Are public transportation, community facilities, on-street parking, lot size, and privacy important? How many bedrooms and baths will you need? Will you need a home office space? How are the neighborhood schools?
You’ll be able to answer some of these questions on your own, but you may need some assistance with the others. If you do, please contact us. We can make sure you have the important home buyer’s information you need.
Posted: May 11th, 2007 at 1:11 pm
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Home Sellers
After signing a buyer’s purchase contract to sell your house, the preparation for settlement begins. Settlement, or closing escrow, is the process of transferring the title (ownership) of the home from seller to buyer.
A lot of times, the real estate agents will help take care of these arrangements. But the buyer and seller are ultimately responsible for managing to these details.
Buyer’s Responsibilities
Buyer gets a loan.
The buyer must first secure the financing to buy the house. Usually this means taking out a mortgage loan. Most lenders require a complete financial report, including income and expenses, and credit check. In addition, most want an up-to-date appraisal of the home, a survey of the property, and any required inspections. Some lenders specify which service providers they want the borrower to use. Once all the paperwork is complete and submitted, the borrower should keep in touch with the lender until receiving commitment.
Obtain homeowner’s insurance.
Prior to buying, a hazard insurance policy should be purchase. The buyer is also required to purchase title insurance policy to protect the lender. If the buyer is interested in bringing an attorney to settlement, arrangements should be made 30 to 60 days in advance.
Receive Good Faith Estimate.
The buyer should receive a Good Faith Estimate of settlement costs a few days before settlement. Along with the loan commitment letter, the buyer must bring a certified or cashier’s check for the down payment and any other costs due at settlement. Mortgage interest from the closing date to the first payment due, escrow for property taxes and insurance, and various taxes and recording fees are included in these cost.
Seller’s Responsibilities
Select closing agent.
Usually, it is the seller that designates the settlement agent. This should be done 30 to 60 days before closing. The seller and listing agent work together to arrange inspections and appraisals and to provide needed paperwork such as previous title insurance information and any prior inspections.
Give loan payoff notice.
The sellers would need to check with their lender to get the current figures for the payoff of the mortgage, and to learn if any rebates are due for pre-paid taxes or insurance.
Joint Responsibilities
Stay on top of details.
Both the buyer and seller need to give the settlement agent any and all relevant information. Many long and detailed forms are usually signed at settlement, so requesting copies of the basic settlement forms in advance to review ahead of time should be considered. At the settlement table, the focus is on checking the exact figures to be sure they are accurate.
Designate legal representative.
In case the buyers or sellers cannot come to closing, they should notify the settlement agent in advance so a Power of Attorney form can be prepared. The person named on the form can act as the signer’s legal representative.
Once all the papers are signed and money paid, the keys are handed over to the buyer and the sale is complete.
Posted: May 11th, 2007 at 1:07 pm
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