Are you ready to buy a home?

• Know your reasons for buying a home
  • Pride of Ownership – A home is an investment, building equity. You will enjoy having something that’s all yours – a home where your own personal style will tell the world who you are.
  • Tax Purposes (Mortgage Interest & Real Estate Taxes are deductible) – Discuss other details with your accountant
  • Tired of Renting? – When you rent, you write your monthly check and that money is gone forever, but the one advantage of renting is being generally free of most maintenance responsibilities.
  • Want to decorate and landscape the way you want to? When you rent, you may not be free to decorate without permission and you may be at the mercy of the landlord.
• Analyze your Budget
  • Know exactly how much you can afford
  • Earnest money deposit is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and conditions). If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal, you may forfeit the entire amount.
  • Have a down payment? There are mortgage options now available that only require a down payment of 5% or less of the purchase price. But the larger the down payment, the less you have to borrow, and the more equity you’ll have. Mortgages with less than a 20% down payment generally require a mortgage insurance policy to secure the loan. When considering the size of your down payment, consider that you’ll also need money for closing costs, moving expenses and possibly, repairs and decorating.
  • Do not underestimate your expenses – Well, of course you’ll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. You can request the utility costs from the seller.
  • Be prepared for unexpected expenses
• Select a Lender (Talk to people and get referrals to make the best choice for you) – We have provided a list of local qualified lenders under the Resource Menu
  • Pre-Qualification – find out what you qualify for based on your credit, salary, etc.
  • Keep in mind that the House Payment includes:
    • Principal – The repayment of the amount you actually borrowed
    • Interest – Payment to the lender for the money you have borrowed
    • Taxes – The annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year.
    • Homeowner’s Insurance – A monthly amount to insure the property against loss from fire, smoke, theft and other hazards required by most lenders. A paid homeowner’s insurance policy or paid receipt is required at closing.
• Home Search
  • Begin looking at homes that fit your wants, needs and the price that you can afford. You may have to make compromises through this process.
    • Tips on Finding the Right House
      • Get familiar with the different housing types available to narrow your search.
      • Don’t just buy a home for your present needs. Make sure to take into account future considerations.
      • Take notes on each property to compare and to remember details
      • Maintain your perspective and your cool! You may find the right house on the first day or the tenth. The important thing is to get the home that is best for you.
• Home Selection
  • Once you select the perfect home, you must contact your lender and begin the loan process.
  • What you need for Loan Application:
    • Pay Stubs for the past 2 months
    • W-2 forms for the past 2 years
    • Tax returns ( past 2 years)
    • List of any long term debt (anything you will owe on for more than 6 months)
    • Bank statements (savings & checking) for past 2 months
    • Proof of additional income (child support, Social Security, disability).
    • Explanation for any adverse credit (Documentation is helpful)
    • Purchase agreement
  • Decide on Loan Type
    • Fixed – Payments remain the same for the life of the loan.
      • 30 Year – In the first 23 years of the loan, more interest is paid off than principal, meaning larger tax deductions. As inflation and costs of living increase, mortgage payments become a smaller part of overall expenses.
      • 15 Year – The load is usually made at a lower interest rate. Equity is built faster because early payments pay more principal.
    • Adjustable Rate Mortgages (ARM) – Payments increase or decrease on a regular schedule with changes in interest rates; increases subject to limits. An ARM may make sense if you are confident that your income will increase steadily over the years or if you anticipate a move in the near future and aren't concerned about potential increases in interest rates.
  • Home inspection should be performed
• Select Title Company – We have provided a list of lenders under the Resource Menu
  • Your Lender, Realtor and Title Company will work together to get you through the process as quick and painless as possible.

Charlie and I would be happy to answer any questions, please contact us!