BUYERS

Maybe you are tired of renting. Maybe you’ve had a baby or two and are outgrowing your current home. Or possibly you have just started a new job in a new town. No matter the reason, you are considering buying a new home.

Buying a new home is both exciting and scary. Even if you’ve bought one before, a home is the single largest purchase most people will ever make. Thus, the decision should be made with careful consideration. It’s easy to let emotion rule in a house hunt, but because of the amount of money and time involved it is important to make the decisions with the head and not the heart.

Also, remember that you are not alone in this process. A real estate agent is not just a person with access to the MLS database. A good agent knows the area and can help you find what you need in your price range. I can also guide you through every step of the process, from deciding between a pre-owned home or a newly built one, to making the offer, and negotiating after the inspection.

The home buying process can be intimidating, but with the right preparation you can confidently buy a new home to live in for years to come.

Today’s housing market has changed from recent years, and this affects home buyers in many ways. The requirement for a down payment is just one of those areas.

Historically, there have been programs to allow buyers to finance their down payment—which essentially meant you bought a house with no money down. While the programs today are different than these historical programs, there are other ways to redue the down payment on your home. If you are looking for a no-money-down option, a rural housing loan may be your best choice. With this loan, you are limited to where you buy a home, but but you can avoid a large down payment (i.e. if you are willing to commute, this may be a good option). However, you can often find a house just outside the city limits that will qualify.

Another low down payment option is an FHA loan. These requirements are typically much lower than what is needed for a loan with a bank or mortgage company. You will only need to save 3 1/2 percent of your home’s cost for a down payment. There are also qualifications for this program, like being a first-time home buyer, as well as buying a modest home.

While you will have to find out if you qualify for either option, the lower down payment can make this a much cheaper alternative to traditional loans. This way, you can buy your home much sooner than you would otherwise.

When considering the purchase of a new home, investment property or refinancing your existing home loan, it’s best to familiarize yourself with how financing changes things. Current mortgage interest rates have a major influence toward your overall purchasing power. It is important to obtain a mortgage with an interest rate that suits your circumstances. Options for financing your property depends on your personal financial situation and your unique desires.

Interest rate is the rate at which interest is paid to a lender by the borrower for use of loaned money such as a mortgage. Higher interest mortgage rates simply mean that your monthly mortgage payments will be greater than financing at a time when interest rates are lower.

An adjustable-rate mortgage differs from a fixed-rate mortgage in many ways. This interest rate changes periodically, typically in relation to other factors. Monthly payments may go up or down during the period of your ARM loan. You may consider refinancing when interest rates are low if you have a variable interest mortgage rate.

Shopping for a fixed interest rate mortgage may save you a substantial amount of money. Future interest rates will have no impact on your loan, meaning your home loan monthly payments for principal and interest will not increase. The fixed rate does not change during the period of your loan which is usually 15 to 30 years.

Many different types of mortgage interest rates are available. Choosing your mortgage and type of interest rate may be the most important financial decision you will make.

Because financing is such a significant part of the buying process, it is best to know everything you can about it. Sometimes, however, there are unexpected costs to buying a home that you should be aware of (if these costs are intentionally hidden, however, the seller may be breaking federal laws). Some examples of “loose ends” that should be tied before closing day include:

Property taxes are pro-rated to the time of closing, and the amount of taxes due at closing will depend on how the taxing authority collects property taxes.

There may be liens against the property that have been ignored and they must be settled before closing can occur.

The current owner may want the buyer to pay the balance of a current sidewalk assessment that was being paid yearly with the taxes.

The financing source may include costs that were not mentioned such as document fees, courier fees, and the funding of an escrow account which includes taxes and property insurance that will be due before the monthly payment builds up enough money in the escrow account to pay them.

The finance company should have disclosed their “points” for originating a mortgage long before closing, but the amount of points may go up before closing.

Homeowner association dues are sometimes payable two months in advance for new homeowners.

However experienced you are in purchasing a home, be aware of potentially hidden costs, so there’s no surprises for you at closing time.

While renting can be useful for some financial situations, owning a home provides great benefits to you and, ultimately, your financial well-being.

1. Control your space. Use a spare bedroom for your own home office. Create a workout area in the garage. You own the home, you make the rules.

2. Pride of Ownership. When you own something you tend to take better care of it. A home is no different. Cutting your lawn, creating a garden, or just making improvements on the weekends becomes a thing of joy.

3. Stability. When you purchase a home with a fixed interest rate mortgage, you don’t have to worry about surprises in your monthly payment. Month after month, you know what your payments are going to be. Renters don’t have that luxury. At the end of the lease, they have to be concerned about rent increases and possibly having to move.

4. Home Equity and Price Appreciation. Over time, as you build equity in your home, you may even have a home is that is more valuable than what you paid for it.

5. When you own a home, you own an asset. After living in a home, you are often rewarded with thousands of dollars of appreciation, whereas a rental only returns your security deposit!

So, while owning a home can take some work (and money), it is something you are likely to thank yourself for—both years down the road, and after you move in.

There are many great reasons why owning your own home makes perfect (cents) sense. One of the best reasons is the potential savings over renting. If you are renting a home, chances are likely that your rent will increase in the next several months. As the economy keeps changing, so does the housing market.

Owning your own home puts savings back in your pocket, and allows you to know exactly how much your mortgage payments are (and allows you to choose various financing options). For example, you can secure a fixed rate that never changes, unlike the rental market. Additionally, for homeowners, the government sometimes offers compensation for home repair, efficiency repairs, etc. which puts money back in your pocket. While the cost of purchasing a home is sometimes more expensive, these types of programs can make things more affordable. And in the long-run, a house simply costs less than a rental.

If you’re in a position to do so, make the choice today to get out of your rental, and begin investing in a home. Now is the perfect time to get rid of your headache, and free yourself from the high cost of renting.

Some people are still stuck in a renting rut because they either believe they cannot afford to own their own home or do not think they can handle the responsibility of owning their own home. What they do not realize is that buying a home may be cheaper in the long run and owning a home may not have the same headaches as renting a home. There are many benefits to owning a home.

Being a homeowner means you are the manager of your home. This means you can do what you want with your home. You can rent it out for extra money and make home improvements if you need or want to. Making home improvements can mean a good investment in the long run because it can add value to your home when you are ready to sell it.

Owning a home may be cheaper in the long run versus renting a home from someone else. For one thing you are making a payment for an investment if you are paying on a mortgage and not paying someone else to live in their home. Another reason it may be cheaper is because the homeowner can borrow against that mortgage if they need to. If you are renting, you cannot do that.

If you are a homeowner, you can use your home and property as tax deduction when tax time comes around. This means more money in your pocket.

Are you thinking about buying your own home? If so, there are several great benefits in doing so. If you’re someone that is settled and doesn’t plan on moving anytime soon, here are three ways you can benefit in becoming a home owner.

No wasted money: When you rent from someone, whether it be an apartment or a home, you’re giving them money to pay off their mortgage. What this means is, when you move out, you don’t have anything. When you get a home of your own, you don’t have to spend a ton of money, but instead get one within your price range and one that’s in your name and you’re paying off.

Design your own home: It’s a great feeling to be able to come back to your home and be able to design what your whole house looks like. From being able to paint the walls your favorite color, to being able to pick out your appliances, it’s only what you want.

Do your own landscaping: Another great perk of owning a home instead of renting something such as an apartment is the fact that you have a yard and you’re able to landscape it yourself.

As you can see, there are some great benefits to becoming a home owner. Between putting your hard earned money toward your own mortgage instead of someone else’s and being able to customize your home the way you want it, it’s worth it in the long run.

What’s important to you? Close proximity to great schools? Community amenities like parks and walking trails? Large homesites? Ranch floor plans? Make a list and try to stick to it. 

How many bedrooms do you need? Should any of them be on the first floor for easier access? Is a gourmet kitchen important to you? What about space for a home office or a playroom? By making a list of the features you want, you can focus on what’s most important to you.

Once you’ve narrowed down your options, visit homes or models of plans of homes you’re interested in and really take your time. Pack your camera and a notepad so you can record your thoughts for later. Imagine where you would place your furniture, and bring a tape measure to make sure it will fit. Pay attention to the little things, like how far you’ll have to carry your groceries from the garage, and where you’ll fold your laundry. It’s amazing how much you can learn from a home tour if you know what you’re looking for.

Whether you are a first time home buyer, purchasing your second or third home, buying an investment property or investing in a vacation home, buying is a huge decision. It can be one of the most rewarding and one of the most stressful experiences a person can have. Navigating the tricky waters of buying a home is no easy task. But, a good real estate agent can help.

Now that you have found a home you wish to purchase, the next step is to make an offer. The real estate agent will have a printed form that will list all the legal talk, leaving blanks for the pertinent information. As with any legal document, be sure you understand this document before signing.

The primary item in an offer is the price you are proposing. This price is often a negotiating tool, setting the stage for a give-and-take that will eventually lead to final sales price. The price the buyer offers will depend on many factors: the market conditions, what comparable properties in the neighborhood have sold for, the condition of the home and your budget. Your realtor is an invaluable guide during this process.

The buyer must also list in the offer any concessions he wants the seller to include. For instance, will the seller be asked to cover any of the closing costs? Also will certain items, like appliances, be included in the price.

There are also stipulations on the sale put into an offer. The sale can be contingent on an inspection of the property, the mortgage approval of the buyer, or the sale of a buyer’s other home. Also an offer states how soon the closing will take place after an offer is accepted.

Finally an offer will limit the time a seller has to respond to the offer. The offer is no longer binding on the buyer after that period of time ends.

Once the seller accepts an offer, the buyer and seller are under contract. This means that the two parties are in a legally binding agreement. The next step for the buyer is to pay earnest money.

Earnest money is a portion or percentage of the sales price that is held by a third party in escrow until closing. Earnest money is given to show the full faith of the buyer, that he is “in earnest” in his desire to purchase the property. Thus the seller is obligated to take the house off the market and not accept any other offers. The third party who holds the earnest money varies by state. In some states, it is the title company or settlement company. In other states, the real estate broker holds it.

If the offer is rejected or rescinded because of contingencies listed in the offer, the earnest money is returned. For example, if the property’s inspection shows multiple problems that would take a great deal of money to repair, and the offer was contingent on an inspection, the buyer can withdraw the offer and receive the earnest money back. However, if the buyer backs out for any reason other than those stipulated in the offer, then he forfeits the earnest money to the seller.

Once the sale of the home has concluded, the earnest money is counted towards the purchase price.

You’ve found a home you love and made an offer. The seller has accepted the offer and you have given the title company or broker a check for earnest money. The next step in the process is closing time — which is to say, a lot of “hurry up and wait” time.

This is the time in which a home inspection takes place. If the inspection shows significant problems, then further negotiations may take place. The buyer may either ask the seller to pay for the repairs or to lower the sales price.

During this time, the financial issues will be finalized. The mortgage company will appraise the property, if needed. If the appraisal is lower than the selling price, further negotiations will be required. The buyer will also need to finalize approval for the mortgage and be prepared to pay the closing costs and down payment.

Start packing — it’s time to move to your new home!

The day has finally come: the day you get the keys to your new home.

In some parts of the country, this day is called closing. In others, it is settlement. Either way it is the day ownership is transferred from the previous owner to you, the buyer. This day is normally at least 30 days to several weeks since the offer was accepted.

Several things happen during this process. If the buyer is paying a down payment, he brings a check to the title company covering that, as well as one covering closing costs. If any of the selling price is being covered by a mortgage, then mortgage paperwork will need to be signed and finalized. The seller brings the deed, keys, and any other needed items to the title company to be transferred to the buyer. The seller’s mortgage is paid off with the proceeds, and the real estate agents also receive their percentage payment at this time. If there is any money left after the mortgage pay-off and realtor fees, this money is given to the seller. The title company then registers the transfer of deed. All these parties are not required to be at the title company at the same time.

In states where ownership transfer is handled by a settlement company, the same process takes place. However all the parties — buyer, seller and agents — appear at the settlement company’s office at the same time so that all steps are done at once.