Home Buyers Guide

If you’re like most people, buying a home represents your single biggest investment – and debt. As such, the home buying process can be one of the most exciting, but sometimes also stressful, experiences you ever go through. This may be true whether you’ve bought many homes or you’re looking to buy your first, whether you’re in the market for a new primary residence, an investment property or that perfect vacation getaway. Moreover, never has the real estate market offered more great opportunities, or been fraught with more risks, than now. There are many factors to consider and many decisions to make. That’s why, when buying, it’s crucial for you to have all the available resources necessary to make a well-informed decision, together with the time required to make complete use of them. That’s also why you should enlist the help of a trusted Mortgage Broker who’ll be able to provide you with expert consultation at each step of the lending process. Generally, finding and purchasing a home includes the following steps, 1. Define Your Goals, Research Your Options, Make Your Plans Given that buying a home is such a big step, it’s all the more important for you to educate and prepare yourself as much as possible in advance. This means clearly determining why you’re buying and what kind of home you’re looking for. And because buying and financing a home are so closely related, it also means examining your current financial situation and projecting how much you can afford. Once you’ve answered these questions, even tentatively, you’ll be in a better position to research your housing and mortgaging options, as well as create an action plan and timelines for moving forward. You may want to do this yourself, but you may also benefit by consulting an experienced Mortgage Broker right from the start. 2. Contact A REALTOR® Buying real estate is a complex matter at the best of times, given that there are so many factors to consider and no two homes or transactions are alike. However, with all the unique opportunities and potential pitfalls of the current market, it’s even more important for you to contact a REALTOR® once you’ve definitely decided to buy.  3. Get Pre-Approved For A Loan Generally, it is recommended that you get pre-qualified for a loan before you start viewing homes with the serious intention of buying. The preapproval process involves meeting with a lender and authorizing them to examine your current financial situation and credit history. On the basis of this examination the lender will provide you with a document that details how much you can borrow to buy a home. 

The benefits of pre-qualification include: • You’ll have information about what you can afford and be able to plan accordingly • As a qualified, motivated buyer you’ll be taken more seriously when you make an offer on a home • Lenders can tell you whether you qualify for any special programs that will enable you to afford a better home (particularly if you’re a first-time buyer) .

Credit history

The truth is, more than potential lenders check a person's credit history. Basically, your credit history is important because lenders, insurers, employers, and others may use it to assess how you manage financial responsibilities.

Monthly debt

Include all of you and your co-borrower's monthly debts, including: minimum monthly required credit card payments, car payments, student loans, alimony/child support payments, any house payments (rent or mortgage) other than the new mortgage you are seeking, rental property maintenance, and other personal loans with periodic payments.

Do NOT include: credit card balances you pay off in full each month, existing house payments (rent or mortgage) that will become obsolete as a result of the new mortgage you are seeking. 

Assets

Personal Assets

Down payment

The down payment is a portion of the total sales price of your home, which you give to the home’s seller. The rest of the payment to the seller comes from your mortgage. Down payments are expressed as percentages. A down payment of at least 20 percent lets you avoid private mortgage insurance, or PMI.

Closing costs

The last step before getting the keys to your new home is signing for a mortgage, and that means it’s time to settle up those expensive closing costs.

Closing costs are the thousands of dollars in fees associated with a mortgage, typically amounting to 2 percent to 5 percent of the loan principal. There are various closing cost components and they vary from state to state. Some closing-related items can be negotiated by a consumer.

Closing costs include an appraisal, credit check and title search. When people refinance a mortgage or obtain a home equity loan or home equity line of credit, closing costs have to be paid again.

Insurance

• Homeowners insurance is a form of property insurance that covers losses and damages to an individual's house and assets in the home. 
• The policy usually covers interior damage, exterior damage, loss or damage of personal assets, and injury that arises while on the property.
• Every homeowners insurance policy has a liability limit, which determines the amount of coverage the insured has should an unfortunate incident occur.
• Homeowners insurance is different from a home warranty and mortgage insurance. 

Home inspections

A home inspection is a limited, non-invasive examination of the condition of a home, often in connection with the sale of that home. ... A home inspector is sometimes confused with a real estate appraiser. A home inspector determines the condition of a structure, whereas an appraiser determines the value of a property.

Required funds

The term “cash to close” or “funds to close” is not the same as your closing costs or your down payment.

• Your “cash to close” equals your purchase price and closing costs, minus your mortgage amount, earnest money deposit, and any credits from the seller or mortgage lender
• The term “cash to close” isn’t entirely accurate — most title companies won’t accept large amounts of actual cash. Nor can you use a personal check
• You can bring a cashier’s or certified check, or you can wire the funds from your account

Location

If you're taking out a loan, closing usually takes place at the office of a settlement agent. It can be the title company (the company that insures your ownership of the property) or, in some states, the lender's office or escrow company. If buying with cash, you and the seller can decide the most convenient location.

Identification

What should I bring for a closing? Two forms of identification. One must be government-issued and include a photo, such as your driver's license or passport. The other must have your name printed on it, such as a Social Security card, credit/debit card, insurance card, wholesale membership card, library card, etc.