The Buying Process
I understand that buying a home can be an enormous undertaking. From beginning to end you can trust me to always look out for your best interests. My level of professionalism, experience and knowledge will allow you to feel comfortable as you plan for this important step. As an experienced professional, I will utilize my resources and market expertise to help you find the perfect home.
Find the Right Mortgage!
The most important part of financing is your knowledge of the options available. There are mortgages to meet everyone's needs. These summaries will help you narrow your search.
Adjustable Rate Mortgage (ARM)
A mortgage that 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.
A short-term fixed-rate loan involves small payments for a certain period of time with the balance due in a single large payment at a specified time. Generally, the homeowner must either refinance or sell.
The payment of extra money on a loan now so as to provide a lower interest rate. To buy-down a mortgage, the buyer pays additional points to the lender, which will decrease the interest rate for a specific period.
First mortgages up to loan amounts mandated by Congress, which meet the qualifications for sale or delivery to either the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC).
A structured, short-term loan to provide funds necessary to begin construction on buildings or homes.
A mortgage loan that is made by an institutional lender without the inclusion of government guarantees such as VA or FHA loans.
The convertible ARM is a combination of both fixed-rate and adjustable rate mortgages, allowing the best of both options in one package.
A mortgage for when payment isn't sufficient to cover both principal and interest, and the payment of interest is postponed until a certain date at which time it's added to the principle.
Federal Housing Administration (FHA)
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.
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
A corporation within the U.S. Department of Housing and Urban Development. It guarantees the payment of principal and interest on all of its pass-through securities, and it's backed by the U.S. Government.
Growing Equity Mortgage (GEM)
This is a long-term mortgage where the borrower agrees to increase payments each year by an agreed amount. The added money is applied directly to the outstanding principal on the mortgage.
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 payments made by the lender to the borrower. 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.
Drive To Learn
Evaluate as you drive though 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 what 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. Joanne can point out the pros and cons of each home from a professional standpoint.
Making an offer to buy a home entails many factors. You and Joanne 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 either you will agree to the terms in counter offer or you will submit another 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.
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:
- An attorney's approval period whereby both parties can have the contract approved by their respective attorneys.
- Legal description of the property and/or 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 or Escrow company - Either a title company, escrow company, or attorney must be agreed upon by buyer and seller
- Details of the closing - when and where
- Home inspection - Recommended to ensure against structural and unknown defects, and must be completed by a specific date set forth in the contract and completed by a certified home inspector
- Inclusions and exclusions - Of building or personal property. Examples would include washers, dryers, window treatments, etc.
- Pest Inspection - 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 professional inspection
- The right to a final walk-through 48 hours prior to the closing to be sure the property is in the same condition it was at the time of contract.
- Well and septic - They must pass a test, if applicable
- Date of possession - When you take possession of the property
- Acceptance date - Either an acceptance or counter offer must occur by a specified date
Processing The Sale
Once the contract is signed, Joanne 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:
- Assist with scheduling 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
The Final Walk
There are two main purposes of the final walk-through. First, you want to make sure that everything that was agreed upon with the seller has been taken care of. Second you want to check that the home is in the same condition it was when you signed the contract for purchase of the home. During the process of moving out or completing necessary repairs prior to moving, it is possible that damage has occurred or that appliances are no longer working properly. All appliances should be functioning.
This is the actual transfer of property title and keys. On the day of the closing Joanne will accompany you to the agreed upon location (usually specified in the contract) where you will generally meet the seller, the seller's agent, and a representative of the title company. You will be required to pay all fees and closing costs with a method of "guaranteed funds", such as a cashier's check.
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