The 9 Steps to Home Ownership 😀
|Step – 1 Make the Decision to Buy|
|It seems obvious, but it’s good to note that the first step to buying a house is making the decision to buy. Consider the reasons you want a new house and write them down. Determine how long you want to live in the new house – does buying still make good financial sense? Can you afford a house that will meet your list of requirements? A good rule of thumb is your mortgage payment should not exceed 1/3 of your net monthly income.|
|Step 2 – Seek Professional Guidance|
|We would like to schedule a time to meet with you to hear the reasons you want to buy a house and your plans for the future. We’ll talk about neighborhoods, schools, economic factors liable to affect the market today and tomorrow, as well as how you would like your house and neighborhood to grow with you. At this time, we will also help you get pre-approved for a mortgage loan. Pre-approval is a written statement from a loan officer indicating his or her opinion that you will be approved for a mortgage loan up to a certain amount with a couple of conditions that will have to be met prior to closing on your home. The fact that you are Pre-approved will help us when we are negotiating the deal, we would like to make You will need to contact Everett Nordby @ newamerican FUNDING or press APPLY NOW to get started. Office: 1-719-344-2964 or Cell 1-719-337-1843 to see what you are comfortable with payment on a home. A good lender will work with you and keep you posted on your loan, with today’s loan guidelines and mnay changes that are occurring daily it’s not as easy to qualify as it was a few years back. We would recommend to get that our of the way first then go out looking for a home of your dreams.
|Step 3 – Begin the Hunt|
|After our initial meeting, we will search all my resources for houses on the market that fit your criteria. We will preview these houses to eliminate the duds. Then, we will schedule appointments to tour the houses at times convenient to you. As we tour houses, we will point out positive features and negative features. We will ask you to tell me what you like and what you don’t like. You’ll probably amend your “wish list” as we tour houses, some things will become more important and others less important. With this new information, we will refine our search criteria to narrow in on the house of your dreams.|
|Step 4 – Know the Market|
|Our knowledge of the local market is an essential factor in the house search. We will let you know when the market in a particular neighborhood is “hot” and requires immediate action or when the market is “cool” and allows for thoughtful consideration. As we tour houses, we will let you know when the asking price has negotiating room and when the house is “priced to sell”. Our unique market knowledge will keep you a step ahead of the “house hunting competition”. In a “seller’s market”, it is not unusual to see multiple offers on a property, full-price offers and even above-price offers. On the flip side, during a “buyer’s market” there are more houses for sale than buyers. This gives us more negotiating room as houses are taking longer to sell.|
|Step 5 – Find Your Dream House|
|We are confident we’ll find your dream house. When we do, we will put together the purchase offer tailored for your needs including appropriate contingencies (such as obtaining financing, favorable home inspection, clear title, etc.). The offer is normally presented with “earnest money”. This is a cash deposit made to a home seller to secure an offer to buy the property. The amount is applied to closing costs. If the seller accepts the offer, generally closing is held 30 to 60 days from the offer date (generally dependent on the turn around time of your mortgage financing).|
|Step 6 – Negotiate the Deal|
|It is not uncommon to receive a counter offer when the initial purchase offer is submitted. Don’t let this discourage you. We will discuss the counter offer and decide whether or not to accept the counter offer, submit our own counter offer, or reject the counter offer and move on. Market conditions will play a role in how aggressively we negotiate the deal. We will also work within your limits. Emotions can lead to buyer’s remorse. It is better to set limits prior to negotiating an offer and stick to these limits.|
|Step 7 – Get a Loan|
|During the closing period, you will be working with your mortgage lender to close the loan: Newamerican FUNDING – Everett Nordby Office: 1-719-344-2964 or Cell 1-719-337-1843.Since you pre-qualified for the loan before starting your home search, you will be that much closer to the end. We will gather the necessary property information your lender will need to close the loan.
|Step 8 – Close the Deal|
|You will receive a “Good Faith Estimate” of closing costs at the time the loan application is submitted to the lender. The estimate is based on the loan officer’s past experience and may not include all the closing costs. We will be glad to review the “Good Faith Estimate,” answering questions and highlighting missing costs and estimates we believe to be low.|
|Step 9 – Move In|
|Congratulations! It’s time to move into your new house and make it your home. Enjoy this exciting time. We will give you a checklist to help you remember the numerous details that will make your moving day a pleasure.|
Writing the Offer – Financial Considerations
It is standard practice to make a purchase offer contingent upon obtaining a mortgage. Because of this contingency, the seller will want the details of your financing plan included in the offer.
In the purchase offer, we will include the down payment amount you will apply toward the purchase. This will give the seller further evidence of your qualifications to secure a mortgage. Interest Rate
Within the purchase offer, we will provide a safeguard against any dramatic change in interest rates between when the offer is made and when the loan is closed. The offer will not only be contingent upon qualifying for a mortgage, it will also be contingent upon an interest rate within a certain range. Seller Assistance
If the house you select is at the top-end of your budget range, we may want to include a request for seller assistance to pay a portion of the closing costs traditionally paid by the buyer or to help “buy-down” your interest rate. Other seller assistance may include having the seller “carry back” a second mortgage to cover your down payment or even 100% seller financing.With any of these seller assistance options, you can expect to pay a higher purchase price than if you had handled the financing through a traditional mortgage lender.
Earnest money shows you’re serious and good faith
Typically when an offer to purchase a house is made, you, as the buyer, will also pay an “earnest money” deposit. This deposit shows the seller that you’re serious about the offer to purchase the property.
The amount of earnest money deposit varies based on the type of property being purchased and local market conditions. As your real estate professional, we will help you determine the appropriate amount to pay as an earnest money deposit.
The sales contract will dictate who holds the earnest money. Usually the seller’s real estate agent will deposit the earnest money in a trust or escrow account until closing. At closing, the earnest money is applied to the purchase price.
In the event the sale does not close, the sales agreement generally spells out the conditions under which you would forfeit the earnest money. Generally if the seller meets all the terms of the contract, the seller will keep the earnest money. If the seller does not meet the terms of the contract, you, as the buyer, may receive a total or partial refund of the earnest money.
The Down Payment
The amount you have available for a down payment will affect what types of loans for which you can qualify. Down payments typically range from 3 to 20 percent of the sales price for the property.
Tips for Accumulating a Down Payment
o FHA Loans
o The primary mission of Housing Finance Agencies is to boost home ownership in targeted areas, among first-time buyers and those with little money for down payments. Most of these non-profit agencies were funded with state government seed money and now operate independently.
Documenting that the down payment comes from your savings and that you will have savings and/or assets over and above the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.
Take extra care to document the sources for any monies to be used for the down payment or closing costs.
Acceptable Down Payment & Closing Costs Sources
There are certain standard costs associated with closing the sale of a house. These fees are split between the buyer and the seller, as spelled out in the sales contract.
As we negotiate the sales contract for you, we will not only work to get the sales price you want, we will also work to limit the number of closing costs for which you will be responsible.
We will walk you through the closing costs, answering any questions you may have explaining which costs are decreed by law to be yours and which are negotiable.
Good Faith Estimate
Buyers will receive a “Good Faith Estimate” of closing costs at the time the loan application is submitted to the lender. The estimate is based on the loan officer’s past experience and may not include all the closing costs. We will will be glad to review the “Good Faith Estimate,” answering questions and highlighting missing costs and estimates we believe to be low.
|Standard Closing Costs
Tax Closing Costs
This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the buyer occupied the property.
Transfer Taxes and Recording Fees
This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.
|Loan-Related Closing Costs Loan Origination Fee
This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount.Points (optional)
An option for the home buyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500.