Buying a home is a time consuming process, with a plethora of possibilities and can it take up an aegis about of time. Creating a plan and following it can make most of the hassles disappear. Below are come of the concepts in a plan that if taken into prospective early can save you time and money.

 

·        Cleaning up your Credit

Your credit score is used as an index into what type of rates any mortgage broker, or bank is going to look at to help secure your interest rate. To help secure you the best interest rate possible it is wise to look into your credit report, see if any past bill, and liens are marked against you. Handling these issue upfront will save you time and remove roadblocks to buying your home.

 

·        Getting Pre-Approved

This simply means that you have in hand a written letter from a lender stating that you have the means to purchase a home. This speeds up the process when it is accompanied with a purchase agreement. The downside to getting Pre-Approved before going house hunting is the cost of the application fee, and verifying your income, assets, debt, job history, and credit score.

 

·        Research your areas!

Simply, research the areas that you are interested in. Look at how the schools are performing, look at what the property taxes are going to run, drive around neighborhoods and see what type of style of home you are looking for, and attending local open houses to judge neighborhoods and also REALTORS that you may meet.

 

·        Your Needs vs. Your Wants

It is important to sit down and make a list of what you need in your new home, but it is also important to list your want and extras that you would like to find in your new home. Planning this out early can cut your search time in half!

 

 

            There are many different options for a mortgage; below we will go into brief description a few different programs.

 

 

 

 

VA loans are guaranteed by the Veterans Administration and are available to qualified veterans. The primary benefit of a VA loan is the ability to obtain 100% financing. The veteran pays a funding fee to the VA at closing, and the fee maybe included in the loan. The funding fee varies from 0% to 3% of the loan amount, depending on a variety of factors.

 

FHA (Federal Housing Administration) loans require very low down payments and are insured by the FHA. A one-time premium is paid at closing and a small monthly premium is included in the loan payment. The amount of the up-front and monthly premium varies with the term of the loan.

Fixed Rate Home Loans

 

Some people just like certainty in their life. And though you can not count on the weather, you can count on a fixed rate home loan. It will have the same interest rate for the life of your loan. And you can choose a variety of repayment terms, with 15, 20, or 30 years the most common.

 

            Fixed Rate Loans are good choice if you:

                        1. Like the new rate and want to keep it for the life of your loan
                        2. Plan to stay in your house a long time.
                        3. Prefer the security of a fixed principal/interest payment.

 

Adjustable-Rate Mortgages (ARM)

 

What goes up must come down. And that is basically the principal of ARMs. The interest rate you pay is adjusted from time to time to keep it in line with changing market rates. This means when interest rates go up, your monthly payment may go up. And, when interest rates go down, your monthly payment may go down.

 

Now that might sound frightening if you have ever lived in an era when interest rates shot up dramatically. But most ARMs have built in features that reduce the risk your rate will ever go that high.

 

ARMs are attractive to because they offer starting rates that are lower than the interest rates of fixed rate home loans. This typically enables you to begin with lower monthly payments and qualify for a larger loan.

 

            Reasons an ARM might be right for you:

                        1. You are planning to move in a few years.
                        2. You’re confident your income will rise.
                        3. You need a lower initial rate to afford to buy the home.

 

 

A start rate, also known as the initial rate, gives you a special low monthly payment for a set amount of time. After the start rate period is over, your interest rate is based on the performance of a financial index, such as the average interest rate or yield on Treasury bills. For a better understanding please contact Kay Wood at 1-317-883-2000.

 

 

May programs offer interest only loans for a set number of years, thus reducing the monthly payment obligation. Principal payments can/will be applied after the initial period of interest only. See your loan officer for all particular.

 

 

This type mortgage is typically amortized over 30 years, but the balance becomes due prior to the term of 30 years.

 

 

The Federal Housing Administration (FHA) and the U.S. Department of Veteran Affairs (VA) offer government-insured loans. These loans have features that make them easier for first time home buyers to obtain. The features include low down payment, and flexible lending guidelines.

 

To get an FHA or VA loan, you apply though an approved lender, preferably one which is authorized to do their own underwriting rather than send the loan to FHA or VA.

 

            FHA Loan Features:

 

1.      Low down payment

2.      No maximum income limit

3.      Fixed Rate and ARM loans available

4.      Insurance from the government replaces PMI

5.      Maximum loan amount vary from State to State, call Kay!

 

           

1.      No Down Payment Loans

2.      Higher Loan Amounts with small Down Payments

3.      Fixed Rate Loans Only

4.      Flexible qualification guidelines

5.      Veterans Need Certificate of Eligibility or Certificate of Status

 

Loans over conforming amounts (Jumbo)

 

Loans for more than this amount are called Jumbo or non-conforming loans. They exceed the loan amount allowed by Fannie Mae and Freddie Mac—two government sponsored enterprises that help facilitate the availability of home loans by investing thought out the country.

 

 

 

Your search has ended congratulations, you have found the perfect house now what?

 

                        Purchase Price

                       

Settling on a purchase price can be a hard thing to do, but do not worry you have a great REALTOR®. After you have looked at comparable properties in the past year that have sold you can make an informed choice on a purchase price.

 

                        Earnest Money

 

What is earnest money? Earnest money is a form of good faith. It is not required when making an offer and does not have to be thousands of dollars. When a listing agent looks at an offer he looks to see if it comes with a Pre-Approval and Earnest money. A strong offer to a listing agent will be accompanied with at least one of the two options. What is a good amount for Earnest money? I recommend that Earnest money should be about $500.

 

                        Closing

 

How long should it take to get to the closing table? Every purchase is different, and comes with its own speed bumps. It is a good idea to put a closing date of at least a month, if you are obtaining a mortgage, or a few week if you are paying cash for the property.

 

                        They Counter Your Offer

 

What is a counter offer? A counter offer is when the seller does not agree with some aspect of the purchase agreement. It is common place to have a least one counter offer (but not limited to) in a transactions. It could be over price, possession of the property, or a number of things. This is the part of the transaction that is going to show you just how good of an agent you have working for you. They will work with you explain your options in a counter offer back to the seller and negotiate with the sellers agent to get the deal down that benefits both you and seller. The worst case scenario is your agent thinks that the seller is being unreasonable they may tell you to reject the counter offer and start looking for a new home.

 

                        Inspections

 

With most Mortgage companies they are going to require that an inspection be done on the property. What is an inspection? An inspection is done by a licensed inspector, by the state, who looks at the properties condition. They will note items like roof, chimney, pool, kitchen, bathrooms, bedroom, windows, door, and so much more that maybe be in need of repair or replacement. It is the inspector’s job to give his opinion on the condition of the property and what needs to be repaired or replaced before closing. Normally this will cost the buyer around, $250-$400.

 

What happens if the report comes back with major defect such as a new roof is needed? Then we sit down and negotiate with the seller for what repairs and/or replacements are needed for our offer to continue to reach the closing table. If we are unable to come to terms with the seller the listing agent should return any earnest money to your agent to be handed back to you, and continued to the next home.

 

                        Appraisals

What is an appraisal and why do we need one? If you are obtaining a new mortgage for the property it will be required that an appraiser visit the property and check the condition of the home, then they will search for home in the same area that are similar to find what the value of the home is for the lender.

 

What happens if the appraisal comes in low? Then we need to re-negotiate the purchase price, and or the conditions of the contract to reflect the value of the home to meet with the appraisal.

 

                        Closing the Sale

 

Closing will take place at a time that is agreeable to both the buyer and seller at the sellers Title Company. All final paperwork will be signed regarding the mortgage, deed, and the title insurance. Keys will be handed over to the buyer and the money will be moved to the seller. Congratulations you have just purchased your own home, doesn’t it just feel great!