How to be a Smart Buyer

1. Know your various mortgage options.
A professional mortgage officer knows, in excess of 50 ways to finance your mortgage. Everyone’s personal situation is a little different. Did you know there is a way to get around PMI or Mortgage Insurance even if you do not have 20% of the purchase price as a down payment? Why pay more than you have to.

2. Get a pre-approval before you find your home.
This benefits you more than you can imagine. Starting your loan process and obtaining loan pre-approval, not just pre-qualification, will place you in a much better negotiating position because the seller will know you are financially prepared. Additionally, this allows you to solve any obstacle, no matter how small, without delaying the closing.

3. Have a market analysis prepared for the home that you choose.
In a fast sellers market you may find that the past history of many home sales do not match with the current market price. Agents have complete information, and you should have all the facts as well. Knowing details regarding comparable sales and active competition will increase your knowledge when you are negotiating the price and terms of your home.

4. Know what you are getting into.
Make sure your agent provides you with a complete cost estimate based on the specific home contracted for, not just an estimate done at loan application. Each home has specific costs associated with it, such as taxes and insurance. These can vary dramatically in different areas.

5. Know what you want and don’t want in a home and what you can live without.
Seeing homes in the proper price range and areas gives you a better feel for the market, and educates you while you look. Your area has a variety of neighborhoods and property types. Make sure that you see what you need to be comfortable with your decision. These statements are not contradictory; you should see all that fits you without wasting time on homes that won’t.

6. Preview schools, shopping, and other neighborhood amenities.
Take the time to know the convenience of your area, and whether the schools, shopping and amenities will help you attract the next buyer.

7. Require proper inspections.
It is money well spent, and paying attention to the results will let you know the condition of the home that you plan to make yours. In addition, making sure that a home warranty is in place can save you unexpected expenses.

If you have any questions on the above information or would like to begin the pre-approval process please visit the mortgage link section on my website or call.

Basic things to remember as you shop interest rates

1. Less is more
If you’re new to investing or real estate, here is a good tip: the higher the interest rate, the more expensive it’s going to be. High interest rates mean you will have to pay back more on the money you borrow. Another good rule of thumb is that affordability increases if you use an adjustable rate mortgage (it’s easier to qualify this way). Of course, there will be a wide range of prices that you can choose from, depending on what kind of financing you choose.

2. Not even the Fed knows for sure
The Fed holds a considerable amount of power, but they can’t control everything. Mortgage interest rates are affected by many unpredictable political, economic and social events. So there is no guarantee what direction interest rates will go. Therefore, make your financial decision based on where things are today including your budget, your needs and your future plans.

3. Locking in rates assures your lowest interest
If you decide you want to lock in at a certain interest rate, you will need to complete a loan application and send it to your lender as soon as possible. This must be done so that your commitment doesn’t runout before your loan is approved. Follow up and be sure that the lender is receiving all of the necessary documentation. Get a property appraisal, which usually costs about $300, through your loan agent as soon as possible.

4. Don’t obsess and miss a good real estate deal
Although rising interest rates can create more problems for home buyers, waiting and hoping for low rate is not necessarily a smart move. You may end up paying a higher price. Refinancing is always an option in the event that interest rates come down.

Once you’ve found your home

There is no way to guarantee a smooth path from an approved contract to the settlement table, but doing your part is at least half the job. Expect minor problems and delays along the way. On the seller’s side, title problems are a common cause of postponed settlements. On your side, bureaucratic snags such as extensive credit checks and slow appraisals can bog things down. In many cases, there isn’t much you or the seller can do but wait.

While you’re waiting for completion of all the processes, you should:

1. Apply for homeowners insurance on your new home.
Your lender will require you to take out a homeowners insurance policy, something you would want to do anyway. The lender wants to cover the amount of its mortgage loan so it can recover the money in the event of a loss. However, it’s up to you to see that your insurance coverage remains adequate by getting property protection, liability insurance and/or any additional coverage you think is necessary.

2. Get an exact accounting settlement cost, and make sure the money and necessary documents will be there at closing.
Make sure your agent provides you with a complete cost estimate based on the specific home contracted for, not just an estimate done at loan application. Each home has specific costs associated with it, such as taxes and insurance. These can vary dramatically in different areas.

3. Select a date for the final walk-through of the house.
The house you’re buying must be handed over to you in the condition specified in the contract. To verify this, schedule a walk-through of the house shortly before settlement, several days in advance is best, to allow time for the seller to correct any last-minute problems.

Take along a simple device, such as a plug-in nightlight, to test all electrical outlets. Turn on the furnace and air conditioning, flush toilets and turn on faucets, put the washing machine and dryer through a cycle. In short, put the house through its paces.

If anything needs fixing or further cleaning, tell the seller immediately. Neither you nor the seller wants to postpone the settlement, but make it clear you won’t go to closing until a second walk-through is satisfactory.

4. Contact utility companies about starting service in your name.

The closing

The closing is where ownership of the home is officially transferred from the seller to you. Your closing officer works for the title company and coordinates the document signing and the collection and disbursement of funds. Your main role at the closing is to review and sign the documents related to the mortgage loan and to pay the closing costs.

Most parties involved with the purchase of your new home will attend your closing. The closing is a formal meeting typically attended by the buyer(s) and the seller(s) (and their attorneys if they have one), both real estate sales professionals, and the closing officer. The meeting is typically held at the title company’s office.

What to bring to closing
For things to go smoothly, each party should bring certain documents and be prepared to pay the necessary fees. Although many closing costs can be paid by personal check, ask the closing attorney or closing officer. A certified or cashier’s check may be required. Verify who the check(s) should be made payable to.

Make sure you have adequate funds for the down payment and other settlement costs, arrange for your attorney to represent your interests at the meeting, bring the loan commitment, inform the lender of the meeting time and place and have your driver’s license ready as proof of identity. Finally, it’s a good idea to bring a copy of the purchase contract to refresh your memory.


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