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Buyers Tips

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					                          Buyers Tips!


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?"

Advice for First-Time Buyers

  Pre-Qualification: Meet with a mortgage broker and find out how
      much you can afford to pay for a home.
  Pre-Approval: While knowing how much you can afford is the first
      step, sellers will be much more receptive to potential buyers who
      have been pre-approved. You'll also avoid being disappointed
      when going after homes that are out of your price range. With
      Pre-Approval, the buyer actually applies for a mortgage and
      receives a commitment in writing from a lender. This way,
      assuming the home you're interested in is at or under the
      amount you are pre-qualified for, the seller knows immediately
      that you are a serious buyer for that property. Costs for pre-
      approval are generally nominal and lenders will usually permit
      you to pay them when you close your loan.
  List of Needs & Wants: Make 2 lists. The first should include items
      you must have (i.e., the number of bedrooms you need for the
      size of your family, a one-story house if accessibility is a factor,
      etc.). The second list is your wishes, things you would like to
      have (pool, den, etc.) but that are not absolutely necessary.
      Realistically for first-time buyers, you probably will not get
      everything on your wish list, but it will keep you on track for
      what you are looking for.
Representation by a Professional: Consider hiring your own real
estate agent, one who is working for you, the buyer, not the seller.
Focus & Organization: In a convenient location, keep handy the
items that will assist you in maximizing your home search efforts.
Such items may include:
One or more detailed maps with your areas of interest highlighted.
  •   A file of the properties that your agent has shown to you, along
      with ads you have cut out from the newspaper.
  •   Paper and pen, for taking notes as you search.
  •   Instant or video camera to help refresh your memory on
      individual properties, especially if you are attending a series of
      showings.        Location: Look at a potential property as if you
      are the seller. Would a prospective buyer find it attractive based
      on school district, crime rate, proximity to positive (shopping,
      parks, freeway access) and negative (abandoned properties,
      garbage dump, source of noise) features of the area?

Visualize the house empty & with your decor: Are the rooms laid
out to fit your needs? Is there enough light?

Be Objective: Instead of thinking with your heart when you find a
home, think with your head. Does this home really meet your needs?
There are many houses on the market, so don't make a hurried
decision that you may regret later.

Be Thorough: A few extra dollars well spent now may save you big
expenses in the long run. Don't forget such essentials as:

  •   Include inspection & mortgage contingencies in your written
      offer.
  •   Have the property inspected by a professional inspector.

  •   Request a second walk-through to take place within 24 hours of
      closing.
  •   You want to check to see that no changes have been made that
      were not agreed on (i.e., a nice chandelier that you assumed
      came with the sale having been replaced by a cheap ceiling
      light).

Getting the Best Rates for Your Mortgage

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

With the advent of the Internet, much of this information is
readily available online. Once you have educated yourself
sufficiently about real estate loans, all it takes is the time and
energy to sift 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.

             E-Loan (http://www.eloan.com)
When comparing loans, make sure that you're comparing loans
of the same type. For example, you find that "Loan A" for a 30-
year loan has a much lower interest rate than "Loan B" (also for
30 years). Upon further inspection, you find that "Loan A" is
technically an adjustable rate mortgage. Its payment is based on
a 30-year amortization, but becomes due through either
payment or refinancing at the end of 5 or 7 years. These are
frequently referred to as a 5-year or 7-year fixed-rate mortgage.
While both said "30-year", they are not the same type of loan.

Ask the lender for a statement detailing all fees associated with
the loan. Factors such as "points" (loan fee), interest rate and
"garbage fees" (extra fees which some lenders charge) can vary
greatly from one lender to another.

Mortgage Broker

If you do not have the time or experience to "do it yourself," look
for a qualified mortgage broker that can assist in finding the right
mortgage for you. Ask friends and associates who have
refinanced or purchased recently if they have a broker they can
recommend. 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.
You've Opened Escrow, Now What?

Congratulations, you are on your way to owning your very own
home! Follow these suggestions (and your realtor's advice) so
that escrow and settlement with go as smooth as possible.

You will be asked for a down payment on the home you are
purchasing. You can choose to put down as much or as little as
you want (depending on your mortgage), but remember, the
more you put down toward the total price of your home, the less
time it will take you to pay off and the less your mortgage
payments will be every month.

During this period of purchasing your home, you are going to
need an escrow or settlement company to act as an independent
third party so that you know when and who to give your money
to get the deed to your new home. The escrow or settlement
company will hold your deposit and coordinate much of the
activity that goes on during the escrow period. This deposit
check may also be held by an attorney or in the broker's trust
account. Make sure that there are sufficient funds in your
account to cover this check.

The deposit check will be cashed. Assuming the sale goes
through, this money will be applied to the purchase price of the
home. If for any reason the sale is not consummated, you may
be entitled to receive all of your deposit back, less standard
cancellation fees. In certain instances, the seller may be able to
retain this money as liquidated damages. Prior to executing a
purchase contract, it would be wise to speak with your counsel
regarding whether or not it is your best interest to have a
liquidated damages clause as part of the contract.

The period that you are "in escrow" is often 30 days, but may be
longer or shorter. During this time, each item specified in the
contract must be completed satisfactorily. By the time you have
opened escrow, you have come to an agreement with the seller
on the closing date and the contingencies. Each contract is
different, but most include the following:

 Inspection contingency: this should be completed as soon as
     possible after the contract to purchase is signed as
     unsatisfactory results of the inspection may mean that you
     will want to cancel the contract.

 Financing contingency: once the contract is signed, you have
    a period of time to secure funding. If, for any reason, you
    are unable to secure funding during the period of time
    granted to you by the contract (and the seller will not
    provide a written extension of time), you must decide
    whether you want to remove the contingency and take your
    chances on getting a loan. You may choose to cancel the
    purchase contract.

  A requirement that the seller must provide marketable title.
With an attorney or title officer, review the title report. The title
must be "clear" to ensure that you do not have legal issues
regarding your ownership.
Check into local and state ordinances regarding property transfer
and make sure that you and/or the seller have complied with
them.
Secure homeowner's insurance. This will probably be required
before you can close the sale. Due to such requirements as
special fire and earthquake insurance, obtaining this insurance
may require a lengthy period of time. It would be in your best
interest to apply for insurance as soon as possible after the
contract is signed.
Contact local utility companies to schedule to have service turned
on when you close escrow.
Schedule the final walk-through inspection. At this time, you
should make sure that the property is exactly as the contract
says it should be. What you thought to be a "permanently
attached" chandelier that would come with the property might
have been removed by the seller and replaced with a different
fixture entirely.
You've made it! Once the sale has closed, you're the proud owner
of a new home. Congratulations!

				
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posted:2/24/2010
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