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Simplify Your Home Buying
Experience
Buying a home can be an enormous
undertaking, so be sure to retain the services
of a qualified REALTOR®. You can trust our REALTORS®
to always keep your interests first and foremost.
As qualified professionals, we'll guide you through
the entire home buying experience and assist you
in being an educated buyer.
Simplify Your Search
What features would you require
in a home to satisfy your lifestyle now and in
the future? Once you know what you can afford,
we'll help you explore your possibilities; from
design preferences to neighborhood choices.
 Moving
Forward
Once you have found the home
that is right for you, it's time to present an
offer. This will consist of earnest money to be
held in an escrow account, a loan pre-approval
letter if you will be financing the purchase,
and a written purchase agreement. This agreement
will set forth your terms of the purchase and
a schedule of events in order to own the property.
This extremely important document is a legally
binding agreement and should be carefully prepared
by knowledgeable REALTORS® who are qualified to
cover all of your interests.
Final Steps
Upon your complete satisfaction,
arrangements will be made to attend a closing.
The closing is usually facilitated by a title
or escrow company that holds your earnest money
in escrow. After furnishing the down payment and
other applicable fees have been agreed upon prior
to closing, final papers will be signed. The deed
and mortgage will need to be recorded in the state
Registry of Deeds, and you will be a homeowner.
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It is highly rewarding to
buy, own and maintain your own home. Whether this
is your first home or you have experience with
the home buying process, we can help. When you
have the tools at your fingertips, you can be
confident in your ability to search, finance your
home, negotiate terms and be prepared at closing.
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Purchasing a new home can
be overwhelming. Without the right resources and
information, the buy process can be stressful
and frustrating. With our services, you can avoid
the pitfalls. We'll be there to help every step
of the way.
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Money Matters –
the most important part of financing is your knowledge
of the options available. Consider the following
questions as a basis for determining your financing
needs.
- How
much mortgage can I afford?
- What
down payment is needed?
- What
is the difference between pre-qualification,
pre-approval and approval?
- What
interest rates are available?
- What
is mortgage insurance and is it required?
- What
type of documentation will I need?
- How
do 15- vs. 30-year terms compare?
- What
are points and do I pay them?
- What
is the difference between a fixed rate mortgage
and an adjustable rate mortgage?
- What
closing costs will I incur?
- What
is being "locked-in?"
- How
long will the mortgage process take?
- What
is included in a mortgage payment?
- What
would the payments be?
- When
would the payments begin?
Make Your Mortgage The
Right Fit!
Mortgages to meet everyone’s needs. These
summaries will help you narrow your search.
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 Adjustable
Rate Mortgage (ARM)
A mortgage, which 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. The change in interest
rate will result in a change in the periodic payments
due under the mortgage. ARMs are attractive when
short-term interest rates are trending lower.
Balloon
Mortgage
Usually a short-term fixed-rate
loan that involves small payments for a certain
period of time with the balance due in a single,
large payment at a time specified in the contract.
Whenever the balloon mortgage becomes due, the
entire unpaid balance is due. Generally, the homeowner
must either refinance or sell the property.
Buy-Down
The payment of extra money
on a loan now so as to provide a lower interest
rate over either a given period or over the life
of the loan. To buy-down a mortgage, the buyer
pays additional points to the lender, which will
decrease the interest rate for a specific period.
Conforming
Loan
Conventional home mortgages,
first mortgages up to loan amounts mandated by
Congressional directive, which meet the qualifications
for sale or delivery to either the Federal National
Mortgage Association (FNMA) or the Federal Home
Loan Mortgage Corporation (FHLMC).
Construction
Loan
A structured, short-term
loan to provide funds necessary to begin construction
on buildings or homes.
Conventional
Mortgage
A mortgage loan made by an
institutional lender without the inclusion of
government guarantees such as VA or FHA loans.
Convertible
ARM
The convertible ARM is a
combination of both fixed-rate and adjustable
rate mortgages, allowing the best of both options
in one package.
Deferred
Interest Mortgage
A mortgage in which the payment
is not sufficient to cover the principal and the
interest and the payment portion of the interest
is postponed until a certain date at which time
the interest postponed is added to the principle
owing.
Federal
Home Loan Mortgage Corporation (FHLMC)
The Federal National Mortgage
Association is a congressionally chartered, shareholder-owned
company and is the largest national supplier of
home mortgage funds. It is commonly known as Freddie
Mac. The company buys mortgages from lending institutions,
pools them with other loans, and sells shares
to investors. Detailed information may be found
at http://www.freddiemac.com.
Federal
Housing Administration (FHA)
An agency of the federal
government, the Division of the Department of
Housing and Urban Development, that sets standards
for the underwriting of private mortgages and
insures residential mortgages made by private
lenders.
Federal
Housing Administration (FHA) Loans
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 than the prevailing ones.
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Federal
National Mortgage Association (FNMA)
The U.S.'s largest supplier
of mortgages to home buyers and owners, a corporation
established by Congress and owned by stockholders.
It is commonly referred to as 'Fannie Mae,' this
government-sponsored enterprise is chartered by
Congress. This federally chartered agency buys
mortgages from lending institutions, pools them
with other loans, and sells shares to investors.
Detailed information may be found at http://www.fanniemae.com
Fixed-Rate
Mortgage
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 (GNMA)
A government-owned corporation
within the U.S. Department of Housing and Urban
Development, it is also referred to as 'Ginnie
Mae,’. This government agency guarantees
the payment of principal and interest on all of
its pass-through securities, and its guarantee
is backed in turn by the full faith and credit
of the U.S. Government.
Graduated
Payment Mortgage (GPM)
A mortgage that usually starts
the borrower with low payments that are gradually
increased over five to ten years, before leveling
off for the remainder of the term of the loan
until the loan is fully amortized. Negative amortization
usually occurs until the payment reaches the level
payment stage. Usually government insured loans
(VA or FHA)
Growing
Equity Mortgage (GEM)
This is a long-term mortgage
whereby the borrower agrees to increase his payment
each year by an agreed amount. The added money
per payment is applied directly to the outstanding
principal on the mortgage. The mortgage thereby
is paid off in a shorter number of years.
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 periodic
payments made by the lender to the borrower. Mortgage
is 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.
Veterans'
Administration Loans
Mortgage loans to veterans
by banks, savings and loans, or other lenders
that are guaranteed by the Veterans' Administration,
enabling veterans to buy a residence with little
or no money down.
Wraparound
Mortgage
A secondary financing option
in which a new larger mortgage is created to encompass
the first mortgage. This large second mortgage
is used to preserve the low interest rate on the
first mortgage for a potential buyer.
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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 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. Your REALTOR® can
point out the pros and cons of each home from
a professional standpoint.
The Offer
Making an offer to buy a
home entails many factors. You and your REALTOR®
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.
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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:
 Legal
description of the property and 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 areed 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 contrct and
completed by a cerified home inspector
- Inclusions
and exclusions - Examples would include washers,
dryers, drapes, 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 walk-through inspection
- 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
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Once the contract is signed,
your REALTOR® 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
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