SO WHAT WILL MY MORTGAGE COVER?
- Answer: Most loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in principal - sometimes two or three times more! Because of the way loans are structured, in the first years you'll be paying mostly interest in your monthly payments. In the final years, you'll be paying mostly principal.
WHAT DO I NEED TO TAKE WITH ME WHEN I APPLY FOR A MORTGAGE?
- Answer: Good question! If you have everything with you when you visit your lender, you'll save a good deal of time. You should have: 1) social security numbers for both your and your spouse, if both of you are applying for the loan; 2) copies of your checking and savings account statements for the past 6 months; 3) evidence of any other assets like bonds or stocks; 4) a recent paycheck stub detailing your earnings; 5) a list of all credit card accounts and the approximate monthly amounts owed on each; 6) a list of account numbers and balances due on outstanding loans, such as car loans; 7) copies of your last 2 years' income tax statements; and 8) the name and address of someone who can verify your employment. Depending on your lender, you may be asked for other information.
HOW CAN I FIND OUT HOW MUCH HOMES ARE SELLING FOR IN CERTAIN COMMUNITIES AND NEIGHBORHOODS?
- Answer: I can give you a ballpark figure by showing you comparable listings. I have access to comparable sales maintained on an MLS database.
HOW MANY HOMES WILL I SEE?
Answer: Studies show that your memory dramatically improves after
consumption of carbs and slows upon consuming sugar. So, layoff the soft
drinks and have a hearty meal of carbs before venturing out to tour homes.
The average number of homes that I show to a buyer in one day is four. Any
more than that, and the brain is on overload. Therefore, don't expect to see
20 or 30 homes; although it's physically possible to do so, you probably will
not remember specific details about any of them.
The "Red Shoes" Experience
Women will relate to this. Say, you need a new pair of red shoes. You go to
the mall. At the first shoe store, you find a fabulous pair of red shoes. You
try them on. They fit perfectly. They are glamorous. Priced right, too. Do you
buy them? Of course not! You go to every other store in the mall trying on
red shoes until you are ready to drop from exhaustion. Then you return to
the first store and buy those red shoes. Do not shop for a home this way.
When you find the perfect home, buy it.
How to Rate Inventory
- Bring a digital camera and begin each series of photos with a close-up of the house number to identify where each group of home photos start and end.
- Take notes of unusual features, colors and design elements.
- Pay attention to the home's surroundings. What is next door? Do 2-story homes tower over your single story?
- Do you like the location? Is it near a park or a power plant?
- Immediately after leaving, rate each home on a scale of 1 to 10, with 10 being the highest.
View Top Choices a Second Time
After touring homes for a few days, you will probably instinctively know which
one or two homes you would like to buy. Ask to see them again. You will see
them with different eyes and notice elements that were overlooked the first
go-around.
At this point, I will call the listing agents to find out more about
the sellers' motivation and to double-check that an offer hasn't come in,
making sure these homes are still available to purchase.
Making the Selection
I'll let you in on a little secret. I generally know which home a buyer is going to
choose, and I suspect most other agents operate the same way. It's an
intuition. But I make it a practice not to steer buyers, and I insist that buyers
choose the home without interference from me. It's not my choice to make.
Real estate agents are required, however, to point out defects and should help
buyers feel confident that the home selected meets the buyer's search
parameters.
WHAT QUESTIONS SHOULD I ASK WHEN LOOKING AT HOMES?
Answer: Many of your questions should focus on potential problems and
maintenance issues. Does anything need to be replaced? What things require
ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)? Also ask
about the house and neighborhood, focusing on quality of life issues. I will dp
my best to provide information and answers to help you understand all of the
information you have gathered. Making a list of questions ahead of time will
help you organize your thoughts and arrange all of the information you receive.
WHEN I FIND THE HOME I WANT, HOW MUCH SHOULD I OFFER?
Answer: Again, as your REALTOR and your Buyers Agent I can help you here.
But there are several things you should consider: 1) is the asking price in line
with prices of similar homes in the area? 2) Is the home in good condition or
will you have to spend a substantial amount of money making it the way you
want it? You probably want to get a professional home inspection before
you make your offer. I can help you arrange one. 3) How long has the
home been on the market? If it's been for sale for awhile, the seller may be
more eager to accept a lower offer. 4) How much mortgage will be required?
Make sure you really can afford whatever offer you make. 5) How much do you
really want the home? The closer you are to the asking price, the more likely
your offer will be accepted. In some cases, you may even want to offer more
than the asking price, if you know you are competing with others for the
house.
What if my offer is rejected?
Answer: They often are! But don't let that stop you. Now you begin
negotiating. I am an expert negotiator and I will help you. You may have to
offer more money, but you may ask the seller to cover some or all of your
closing costs or to make repairs that wouldn't normally be expected. Often,
negotiations on a price go back and forth several times before a deal is made.
Just remember - don't get so caught up in negotiations that you lose sight of
what you really want and can afford!
WHAT DOES A HOME INSPECTOR DO, AND HOW DOES AN INSPECTION FIGURE IN THE PURCHASE OF A HOME?
Answer: An inspector checks the safety of your potential new home. Home
Inspectors focus especially on the structure, construction, and mechanical
systems of the house and will make you aware of only repairs,that are needed.
The Inspector does not evaluate whether or not you're getting good value for
your money. Generally, an inspector checks (and gives prices for repairs on):
the electrical system, plumbing and waste disposal, the water heater,
insulation and Ventilation, the HVAC system, water source and quality, the
potential presence of pests, the foundation, doors, windows, ceilings, walls,
floors, and roof. Be sure to hire a home inspector that is qualified and
experienced.
It's a good idea to have an inspection before you sign a written offer since,
once the deal is closed, you've bought the house as is." Or, you may want to
include an inspection clause in the offer when negotiating for a home. An
inspection clause gives you an 'out" on buying the house if serious problems
are found, or gives you the ability to renegotiate the purchase price if repairs
are needed. An inspection clause can also specify that the seller must fix the
problem(s) before you purchase the house.
WHAT ARE "HOME WARRANTIES", AND SHOULD I CONSIDER THEM?
Answer: Home warranties offer you protection for a specific period of time
(e.g., one year) against potentially costly problems, like unexpected repairs on
appliances or home systems, which are not covered by homeowner's
insurance. Warranties are becoming more popular because they offer
protection during the time immediately following the purchase of a home, a
time when many people find themselves cash-strapped.
WHAT WILL HAPPEN AT CLOSING?
Answer: Basically, you'll sit at a table with a closing agent. The closing agent
will have a stack of papers for you and the seller to sign. While he or she will
give you a basic explanation of each paper, you may want to take the time to
read each one to make sure you know exactly what you're signing. After all,
this is a large amount of money you're committing to pay for a lot of years!
Don't hesitate to ask questions.
It sound pretty intimidating but I will be with you every step of the way. I will be your advisor. I will use my knowlege and experience to make sure everything goes smoothly for you and that you are comfortable with your decisions. Contact me today for the simple way to become a homeowner.
Denise Evans, ABR
Accredited Buyer Representative
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