|
Click on an item below to find out more.
A Home Buyers Guide
We Want to Help
Home ownership, in addition to fulfilling the “great American dream,” is probably the largest investment many of us will make in our lifetime. Thorough planning is required to attain your goal for owning the home of your dreams.
First State Realty presents this information to assist you in the purchase of your home. In addition, your qualified Agent is always available to provide expert advice or answer your questions without cost or obligation to you.
Plan to Buy Your Home
Once you have decided that you want a home and the independence, privacy and stability it provides, you can begin the shopping process.
When?
Your family's needs and financial capabilities should determine the timing for buying your home. Market timing, a guessing game with house prices rising or falling, rarely works and usually will end up costing you more. The rent you pay while you are waiting translates to that much less equity in your new home. History has shown that housing costs continue to rise even in times of low inflation.
Locating Your New Home
Do Your Homework
The best place to start looking for your new home is at home! Take some time to think about what you like about the house you're presently in. What are the things you don't like? By listing these qualities you are narrowing down the number of homes you would be interested in. Plus, you are assuring yourself that your new home will be just what you need and want.
Questions You Should Answer
- What style of home do you prefer?
Split level, split foyer, ranch, two story or condominium?
- Do you prefer a new or resale home?
- How many people will be living in the house?
- How many rooms do you need? Bedrooms, bathrooms?
- Do you feel strongly about certain features?
Formal living room, formal dining room, great room, fireplace, family room, laundry on first floor, central air, master bath suite, multiple car garage, landscaping, etc.
Now That You've Started Looking. . .
More Questions
- Age of the house?
- Structural condition?
- Are there any repairs or improvements you would want to make?
- What type of heating or cooling system?
- What is the annual utility expense?
- Are the plumbing and electrical systems in good shape?
- Do appliances come with the house?
- How much are the property taxes?
- Location of schools, churches, recreational facilities, etc.
How Much Can I Afford?
A Financial Review
You will want to review your financial situation before you begin shopping for a home. You should consider your family's goals and available resources and do some “pre-qualifying”. This is a good method to use to determine the affordable price range of homes that meet your requirements.
The house you can afford depends on the amount of the down payment you can pay and the amount of monthly payments you can make within your budget.
Budget Calculations
Monthly payments include principal and interest on the mortgage loan and often includes property taxes and home owners insurance. These four costs are often abbreviated “PITI”. By adding the monthly costs for Principal, Interest, Taxes and Insurance together you will arrive at your total monthly payment.
It is common for most lenders to use two formulas to calculate a home buyer's affordable housing budget:
1) Multiply your gross monthly income by 28% to determine the maximum house payment which includes Principal, Interest, Taxes and Insurance.
2) Multiply your gross monthly income by 36% and compare to “PITI” plus your other combined recurring monthly debts to determine your maximum payment.
Your First State Realtyagent is available to assist with specific budget calculations.
About Your Down Payment
Sources
People normally use their savings or the proceeds from the sale of their previous home to make a down payment for a new home. Other sources may include a gift from relatives, cash value from life insurance, sales of stock or bonds and proceeds from company profit sharing or savings plans. Review these options carefully and seek the advice of professionals if you have questions.
A larger down payment means you will have to borrow less money and can make a lower monthly payment. You should consider other costs before making this decision. Funds will be required for closing costs, moving expenses and possibly appliances, furniture, carpet or other costs associated with your new home.
You've Found The Perfect House
The following remarks are not intended to be inclusive or legal counsel.
Make An Offer
An offer is made by signing a Real Estate Offer To Purchase. You will also submit a deposit, called “earnest money", to show that you are serious about your desire to purchase the home. Once you and the seller have signed the offer, it becomes a legal contract; therefore, be sure any verbal commitments made by either party have been written down.
Light fixtures, drapery rods, chandeliers, washers, dryers, refrigerators, and any other items that are not permanently attached should be specified in writing if they are part of the agreement.
Unless you agree otherwise, the seller is responsible for plumbing, heating, mechanical and electrical systems being in working order at the time of settlement.
All parties will determine a mutually agreeable closing and possession date.
Closing Day
Costs
The home buyer is furnished an estimate of closing costs by the lender prior to closing under the Real Estate Settlement Procedures Act.
Conventional loans usually reflect a 1% origination fee plus an appraisal and credit report charge up front called a loan application fee. You may also be required to provide deposits to be held in escrow for real estate property taxes and insurance. The lender collects a portion of these every month and pays the insurance or taxes when they are due. Make sure to check with your lender to see which fees may be involved with your specific loan.
Signing On The Dotted Line
Prior to closing, professional services should have been utilized to research and resolve any ownership issues. The lender will explain the mortgage documents and settlement forms. You as the buyer will be required to sign and pay the balance of the down payment and closing costs. Seller, buyer and brokers are supplied a copy of settlement statements for their records.
The house keys are yours. You are now the proud owner of your dream house!
Moving Day
- Request change of address cards from your postman and send your forwarding address to the local post office. Also send change of address cards to: friends, merchants, insurance companies, magazines and others with whom you do business.
- Request termination of the following services and give the date you wish services terminated: Gas, Electricity, Water, Telephone, Cable TV, Refuse Service & Newspaper Delivery.
- Apply for a property tax Homestead Exemption at the County Assessors Office.
- Leave keys for your property with the real estate agent or neighbors.
- Leave your new address with the real estate agent.
- Contact the utility companies in the city to which you are moving and inquire about the necessary fees or deposits required for installation of services.
- Notify your place of worship that you are leaving.
- Transfer your insurance on household goods and personal possessions so that they are properly covered enroute and at your new home.
- Notify the principal of your children's school about your intended move. Request a letter describing the status of your children in school.
- Obtain all medical and dental records and eyeglass prescriptions.
- Arrange sufficient cash or traveler's checks to cover the cost of moving services and expenses until you make banking connections in the city to which you are moving.
- Obtain birth and baptismal records for your children.
- Request shot records for your pets from your veterinarian.
- Arrange for transfer of your stock brokerage accounts.
|
