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Buyers
Buying your new home is a serious venture. It can be an absolute pleasure or a massive headache.
Your house is not just your home, it is a serious investment in the dwelling, the area
and your future.
When buying a home - you're bound to have many questions.
For example, "In what area can I find a home that suits my needs?",
"How much money will I need to afford the monthly payments?" and
"How long will the home buying process take?"
Below are some articles that you might find useful in the home buying process.
Please feel free to click on one of the links below to read more.
Buyer Articles
When you are an informed buyer or seller, you'll make the best decisions for
the most important purchase or sale in your lifetime. That's why our goal is to keep you
informed on trends in the marketplace using the latest statistics in your local area.
With property values continuing to rise, real estate is a sound investment for now and
for the future.
Is Home Ownership Right for you?
Buying a home is the largest purchase most people will ever make. Homeownership has great benefits.
Homeownership also comes with certain responsibilities.
You are ready to own a home if
- You have a continuing and reliable source of income prior to applying for the loan.
- You have a credit history that shows you're ready for homeownership.
- Your total debt is manageable and you can afford to take on the costs associated with homeownership.
- You have money saved for a down payment and closing costs.
Before making the decision, its better to know the
advantages and
disadvantages of homeownership
Advantages
- Tax benefits
- Equity
- Freedom and happiness of owning a home
Disadvantages
- Obligations such as repairs to lawn care
- cannot move quickly from one place to another
Selecting a Mortgage
Mortgage lenders recommend that your monthly mortgage payment should be less than or equal
to a quarter of your monthly gross income. This percentage can change based on the type of
mortgage you choose and sometimes the area in which you're looking to buy.
You need to factor your other debts into determining an affordable monthly mortgage payment.
Mortgage lenders look at whether your total debt is larger than 30-40% of your monthly gross
income. Remember, debt is not just credit cards and student loans. It can also include
alimony, child support, car loans, and housing expenses.
You have to choose the mortgage plan that suits you best
- Fixed rate mortgage:
Provides inflation protection, ow risk and long term.
Mortgage interest will not go down , even if interest rates drop, unless you refinance your mortgage
Your total monthly payment can occasionally increase based on changes to your taxes and insurance
- Adjustable rate mortgage (ARM):
ARMs have adjustment periods that determine when and how often the interest rate
can change. There is an initial fixed-rate period during which the interest rate
doesn't change - this period can range from as little as 1 month to as long as 10 years.
After the initial period, the interest rate will often adjust each year.
At the end of the initial period and at every adjustment period, the interest can change based on
two factors: the "index" and the margin. Interest rate adjustments are based on a published index.
- Balloon mortgages
Balloon/reset mortgages have monthly mortgage payments based on a 30-year amortization schedule, and you have a choice at the end of the 5- or 7-year term to either pay off the remaining balance or reset the mortgage. So you have the advantage of a low monthly payment, like someone with a 30-year loan, but you must pay off the loan at the end of the specified term.
Purchasing a Home
Once you know the price range, its time to start house hunting. Even if you know exactly
what you're looking for, the house hunting process can be overwhelming. It takes time.
Tips:
- Bring somebody with you like a spouse or friend.
- Make sure the house fits into your budget.
- Ask about utility and maintenance costs.
- Think of commuting time and costs.
List your needs and decide on the neighborhood which will help you decide on the correct home.
Getting the Best Mortgage Rates Online
Naturally, you want to get the best deal for the least amount of money. This holds true
for mortgage rates as well.
A lower interest rate means a lower monthly mortgage payment, which can save you money in the long run.
Also, it is easier to qualify for a lower payment than a higher one.
You basically have two routes to finding the best rate. The first is to do all the research
on your own. The second is to use a mortgage broker.
Do-It-Yourself
Once you have educated yourself sufficiently about real estate loans, You can browse
through online resources to find the information you need.
Rates change quickly. That great rate you find today might not be there tomorrow.
Once you find the rate you are looking for, submit a loan application and lock in that rate.
When comparing loans, make sure that you're comparing loans of the same type.
Ask the lender for a statement detailing all fees associated with the loan.
Factors such as "points" (loan fee), interest rate and extra fees can vary greatly from one lender to another.
Mortgage Broker
You'll want to find a broker who is energetic, flexible and knowledgeable about
finance and loans and someone who has your best interests in mind.
The best choice is to contact Usha in TFR Team. Usha is a qualified mortgage broker
who will assist in finding the right mortgage for you.
Service Providers,Escrow, Title Insurance...
Buying a home does not occur in a vacuum, involving only you and the seller.
There are all kinds of people and services involved behind the scenes to make it happen.
Since some of these services affect both you and the seller, there will have to be an
agreement on which companies you will use for them. When you make your offer,
you should request your favorites for these services.
If you are unfamiliar with these service providers, you can get recommendations from your agent.
Escrow and Settlement
Buying or selling a home (or other piece of real property) usually involves the transfer of
large sums of money. It is imperative that the transfer of these funds and related documents
from one party to another be handled in a neutral, secure and knowledgeable manner. For the
protection of buyer, seller and lender, the escrow process was developed
Simply stated, the escrow holder impartially carries out the written instructions given
by the principals. This includes receiving funds and documents necessary to comply with
those instructions, completing or obtaining required forms and handling final delivery of
all items to the proper parties upon the successful completion of the escrow.
The escrow must be provided with the necessary information to close the transaction.
This may include loan documents, tax statements, fire and other insurance policies,
title insurance policies, terms of sale and any seller-assisted financing, and requests
for payment for various services to be paid out of escrow funds.
If the transaction is dependent on arranging new financing, it is the buyer's or the buyer's
agent's responsibility to make the necessary arrangements. Documentation of the new loan
agreement must be in the hands of the escrow holder before the transfer of property can
take place. A real estate agent can help identify appropriate lending institutions.
When all the instructions in the escrow have been carried out, the closing can take place.
At this time, all outstanding funds are collected and fees-such as title insurance
premiums, real estate commissions, termite inspection charges-are paid. Title to the
property is then transferred under the terms of the escrow instructions and appropriate
title insurance is issued.
Title Insurance
Title Insurers, unlike property or casualty insurance companies, operate under the theory
of risk elimination. Title companies spend a high percentage of their operating income each
year collecting, storing, maintaining and analyzing official records for information that
affects title to real property. Their technical experts are trained to identify the rights
others may have in your property, such as recorded liens, legal actions, disputed interests,
rights of way or other encumbrances on your title. Before closing your transaction,
the title company will proceed to "clear" those encumbrances which you do not wish to assume.
Title insurance premiums are paid to identify and eliminate potential risks and claims
before they happen. Furthermore, title insurance involves a one-time premium, paid
when you close the real estate transaction.
The goal of title companies is to conduct such a thorough search and evaluation of public
records that no claims will ever arise. When claims arise, professional claims personnel
are assigned to handle them according to the terms of the title insurance policy.
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