Buyer’s Resources

  Common Home Buying Mistakes (68.8 KiB, 410 hits)

  Finding Your Home (71.7 KiB, 383 hits)

  Moving and Packing Tips (84.4 KiB, 360 hits)

  Thinking About Buying your First Home (66.2 KiB, 431 hits)

  What Happens At Closing (69.4 KiB, 393 hits)

 

 Common Home Buying Mistakes

Looking For A Home Without Being Pre-Approved

Pre-approval and pre-qualification are two different things. During the pre-qualification process, a loan officer asks you a few questions, then hands you a “pre-qual” letter. The pre-approval process is much more thorough.

During the pre-approval process, the mortgage company does virtually all the work associated with obtaining full-approval. Since there is no property yet identified to purchase, however, an appraisal and title search aren’t conducted.

When you’re pre-approved you have much more negotiating clout with the seller. The seller knows you can close the transaction because a lender has carefully reviewed your income, assets, credit and other relevant information. In some cases (multiple offers, for example), being pre-approved can make the difference between buying and not buying a home. Also, you can save thousands of dollars as a result of being in a better negotiating situation. Many mortgage companies will help you become pre-approved at little or no cost. They’ll usually need to check your credit and verify your income and assets.

Choosing A Lender Because They Have The Lowest Rate  

While rate is important, you have to consider the overall cost of your loan. Pay close attention to the APR, loan fees, discount and origination points. Some lenders include discount and origination points in their quoted points. Other lenders may only quote discount points, when in fact there is an additional origination point (or fraction of a point).

Not Getting A Written Good-Faith Estimate

Within three working days after receipt of your completed loan application, your mortgage company is required to provide you with a written Good-Faith Estimate (GFE) of closing costs. You may want to consider requesting a GFE from a few lenders before submitting your application. With a few GFEs to compare, you can get a feel for which lenders are more thorough, and you can educate yourself regarding the costs associated with your transaction. The GFE with the highest costs may not indicate that a particular lender is more expensive than another–in fact, they may be more diligent in itemizing all fees.

The cost of the mortgage, however, shouldn’t be your only criteria. There is no substitute for asking family and friends for referrals and for interviewing prospective mortgage companies. Your real estate agent can also help you find a good mortgage company. You must also feel comfortable that the loan officer you are dealing with is committed to your best interests and will deliver what they promise.

Not Getting A Written Rate Lock

When a mortgage company tells you they have locked your rate, get a written statement detailing the interest rate, the length of the rate lock, and other particulars about the program.

Buying A Home Without Professional Inspections

Unless you’re buying a new home with warranties on most equipment, it is highly recommended that you get property, roof and termite (Structural and Pest Control) inspections. These reports will give you a better picture of what you’re buying. Inspection reports are great negotiating tools when it comes to asking the seller to make repairs. If a professional home inspector states that certain repairs need to be made, the seller is more likely to agree to making them.

If the seller agrees to make repairs, have your inspector verify the completed work prior to close of escrow. Do not assume that everything will be done as promised.

Not Shopping For Home Insurance Until You Are Ready To Close

Start shopping for insurance as soon as you have an accepted offer. Many buyers wait until the last minute to get insurance and find they have no time left to shop around.

Not Planning Your Move Carefully

You expect to move out of your current residence on Friday and into your new residence over the weekend. Also on Friday, your lease terminates and the movers are scheduled to appear.

Friday morning arrives: bags packed, boxes stacked, children under arm and the dog on a leash; you’re sitting on your front door stoop awaiting the arrival of the movers.

Your phone rings. Your loan closing is delayed until the following Tuesday. The new tenants turn into your driveway with a weighted-down U-Haul and the movers pull up across the street.

You ask yourself, “Where’s the nearest Motel 6 and storage facility? How much will the movers charge for an extra trip? Can we afford it?”

Granted, this “disaster” is contrived, but problems can and do occur. How can you avoid such circumstances? Cancel your lease and ask the movers to show up five to seven days after you anticipate closing your transaction. Consider the extra expense an insurance policy. You’re buying peace of mind–and protecting yourself from expensive delays.

Making Major Purchases Before You Close

This includes furniture, jewelry, appliances, electronic equipment, and cars-­anything that will create a debt or cut into your cash reserves. Increasing your debts or decreasing your cash reserves may adversely affect your loan qualification. If you need to buy a car or furniture, wait till after you move into your home.

Moving Your Money Around

Your lender is required to document the source of your down payment and closing costs. If you start transferring liquid assets among different accounts or banks–if only to consolidate–you could end up regretting it when you have to produce cancelled checks, deposit receipts, and other seemingly inconsequential information.

Changing Jobs

Talk to your lender before changing jobs. Changing jobs may adversely affect your ability to borrow. In the worst of case, changing jobs relatively soon or during your transaction can preclude you from closing the loan.

 

 

 

 

 

 Moving And Packing Tips

Selecting A Moving Company

Consumer complaints against moving companies are common. Here are some tips to help your move go more smoothly.

• Get a binding estimate from the moving company. Make sure all charges are
• included in the contract.
• Contact the Better Business Bureau or consumer complaints department and ask
• about their on-time record and other complaints. 
• Movers are limited by law regarding what they are required to pay for lost or damaged goods. Check your existing homeowner’s or renter’s policy to see if you’re covered for such damage. 
• Include any gratuity in the contract.
• The contract should guarantee the number of hours required for the job, and
• provide for an overrun of no more than 10 percent. 
• Inform the moving company of the number of stairs at your new home.
• Witness loading, unloading, and examine all items carefully before signing a
• receipt. 
• Create a written inventory of your belongings before you pack. 

 

Packing Checklist

• Keep the following supplies handy for packing: Boxes, marking pens, bubble
• wrap, newspapers and tissue, tape, scissors, tape measure. 
• Use strong boxes and containers which can be secured tightly. Purchase special
• boxes for dishes, wardrobe and other special items.
• Pack audio-video equipment in their original boxes if possible. Label cables and tighten transit screws. If removing screws, tape them to the objects from which they are removed. 
• Avoid loading more than 50 pounds into one box. 
• Label each box and indicate the following: (a) In which room do the contents belong. (b) Are the contents fragile? (c) If it should be loaded last so it can be unloaded first.
• Cushion contents with packing material such as bubble wrap, newspaper or tissue. Save room by using towels and blankets to wrap fragile items. 
• Pack books tightly on end in small boxes. If musty smelling, sprinkle talcum powder between the pages and wrap the book before packing. Leave stored for a couple of months to eliminate the smell. 
• Have rugs and draperies cleaned before moving and leave them in wrappings for
• the move. 
• Pack medicines in a leak-proof container. 
• Carry all valuables with you.
• Check with your local U.S. Department of Agriculture for regulations regarding moving plants from one state to another. Many states restrict the transport of various plants and fruits.

 

 

Moving House Plants

• Approximately two weeks before you move, prune plants to facilitate packing. Consult a florist or a plant nursery for instructions.
• Approximately one week before you move, place your plants in a black plastic bag, along with a bug/pest strip, conventional flea collar or bug powder. Close the bag and place in a cool area overnight to kill any pests on the plant or in the soil.
• The day before you move, place the plants in cardboard containers. Hold them in place with dampened newspaper or packing paper. Use paper to cushion the leaves and place a final layer of wet paper on top to keep them moist. If you must leave your plants behind, take cuttings. Put them in a plastic bag with wet paper towels around them. 
• On the day of your move, set the boxes aside and mark “DO NOT LOAD” so they won’t be taken on the moving van. Close the boxes and punch air holes in the top before loading into your car.
• During your move, park your car in a shaded area in the summer and a sunny spot in the winter.
• Upon your arrival, unpack the plants as soon as possible. Remove plants through the bottom of the box to avoid breaking the stems. Do not expose the plants to much sunlight at first. Let them get gradually accustomed to more light

 

Moving Garden Plants

• Research climate and soils at your new home. 
• Seeds – gather and store in an airtight container. 
• Bulbs – dig up during their dormant season. Pack in a mixture of loose dry peat moss and vermiculite to provide a lightweight and protective transport medium. 
• Garden tools – sharpen blades of clippers, lawn mowers and shears and apply a thin coating of household or motor oil to protect the paint and metal parts. Clean and disinfect rakes, hoes and sprinklers. Household bleach can be used to disinfect a variety of items. 
• Plants – some plants can be dug up and transplanted.

 

 THINKING ABOUT BUYING YOUR FIRST HOME?

You’ve probably wondered many times if you can afford to buy a home.  Did you know that continuing to make rental payments may be more expensive in the long-run?

When you make rental payments, the money is gone forever. When you make mortgage payments, however, you build equity in your home. The longer you own your own home, the larger your equity becomes. Your home may also appreciate in value, usually at a rate faster than the rate of inflation. In addition, property taxes and  mortgage interest paid on your personal residence are usually 100% tax deductible. There are numerous advantages to owning a home. Here are some things to consider when buying your first home.

 

Obtain Your Credit Report

Get a copy of your credit report from the three major credit bureaus (Experian, Equifax, Trans Union) and review the information. Most lenders will get a credit report for you and review it with you as part of their pre-approval process. The sooner you do this the better. If your credit report contain items which need correcting, it’s easier to attend to them well before you make an offer.

Don’t assume you can’t buy a home because your credit isn’t perfect. There are numerous lenders and loan programs designed for people with less-than-perfect credit. Contact several lenders to discuss your options. In the unlikely event you don’t qualify for a loan, determine what steps to take to improve your credit standing and qualify in the future.

 

Determine How Much Home You Can Afford

Many web sites offer calculators that help you determine how much home you can afford. A good calculator will give you a range of affordability. Many of these calculators use standard debt ratios of 28/36. This means that your housing payments cannot exceed 28 percent of your gross income and that your total debt cannot exceed 36 percent of your gross income. However, there are a wide range of programs. Depending on your assets, credit history and earning potential, you may be able to qualify for more than what the standard debt ratio calculations would indicate. Contact a lender to determine of how much you can afford.

 

Understand The Cost Of Home Ownership

In addition to your mortgage payment, you will also pay for property taxes and home owners insurance. If you buy a condominium or townhouse you’ll likely pay a monthly homeowner’s association fee. It is important that you understand the full cost of owning a home in addition to the tax benefits. Many real estate agents and lenders can help you analyze the cost of owning a home. You may also want to consult with an accountant or a financial planner to determine how purchasing a home will help meet your financial goals.

 

Determine How Much Money You Will Need

Most loan programs require cash to pay for the down payment and closing costs. Many loan programs allow 100 percent financing. In today’s market most lenders offer a variety of programs and down payment options. Even if you have less-than-perfect credit, you may be able to buy a home with a limited down payment.  Many home buyers mistakenly assume they need to save 10 or 20 percent the purchase price before they can buy a home.

 

Determine How Long Your Home Will Meet Your Needs

What home features do you require today? When and in what way might your requirements change? Will you have a larger or smaller family in the near future? Will you some day need a home-office or work area? A two-bedroom home, for example, may serve the needs of a couple, but may not be roomy enough for a growing family. What will be required to convert the garage or basement into additional work or living space? Consider how your needs may change before you buy.

 

 

 

What Happens At Closing?

Most states in the US use title and escrow companies (usually one company combining both services) to facilitate real estate transactions. Some states use attorneys which act as intermediaries for the same purpose. This discussion, viewed from a home buyer’s perspective, includes the role of a title and escrow company.

A title and escrow company fulfills two functions: escrow holder and title insurance provider. An escrow holder is an agent who takes possession of money and written instruments until such time as certain conditions are met. In the simplest terms, the escrow company receives the seller’s grant deed, your money, then makes the exchange:  you get the deed, the seller gets the money.

Several days before the transaction is scheduled to close (funds disbursed, deed recorded), you’ll sign your closing documents. Presented below are the closing procedures relative to signing documents.

Pre-document Signing

• A good guide to understanding your duties throughout the escrow process is your purchase agreement (contract). The contract identifies the duties of buyer and seller. Your tasks may include:
• Ordering, reviewing and approving (or negotiating findings of) property inspection reports stipulated in the contract (roof, structural, pest control, etc.).
• Inspecting any completed work designated in such reports.
• Applying for financing, including receiving and understanding a Good Faith
• Estimate.
• Identifying an insurance agent.

 

Document Signing

Document signing usually occurs at the title and escrow company. Your real estate agent may accompany you. You may have your attorney present. At minimum, in attendance will be the buyers and an escrow company employee, who may also provide notary services. The escrow company employee will answer any questions about their documents and will guide you through the signing process. You’ll be reminded ahead of time to bring to the appointment two official photo IDs and a cashier’s check (if funds will not be electronically transferred) for the balance of your down payment.

• The principle documents you will read and sign include:

 

• 1. Escrow instructions (based upon and adding to the purchase contract) which will include:
  2. the purchase price and terms
  3. agreement regarding mortgages
  4. title vesting
  5. matters of record affecting title
  6. inspection reports to be delivered into escrow
  7. proration adjustments
  8. date of possession
  9. disbursements to be made
  10. identification of all charges and who pays for them
  11. closing date

 

• Loan documents (promissory note, loan agreement, deed of trust, Truth In Lending)
• Fire Insurance (and other requested) coverage
• Structural Pest Control (and other reports) for acceptance
• Other documents as required

 

The escrow company is required to execute escrow instructions. The escrow company will not:

• Interpret your purchase contract
• Act as mediator or advisor
• Participate in controversy
• Arbitrate disputes
• Offer legal advice
• Act in a discretionary capacity

 

Post-document Signing

Between the time you sign documents and close of escrow, the title and escrow company will:

• Request funds from the new lender (if required).
• Verify that checks, drafts, etc. have cleared.
• Order recording (includes title search and document recording).
• Provide the HUD-1* (when required). This document must be made available at least one day prior to closing.
• Close escrow:
  1. − confirm recording
  2. − prepare settlement statements
  3. − deliver documents to parties of the transaction

 

• When the deed has been recorded, you are entitled to the keys to your new home.

 

* The HUD-1 Settlement Statement is an accounting of the closing. All money flowing into and out of settlement appears on the form.

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