1.
Planning For The Future
When planning to buy a home, you should analyze your current
needs and projected
needs in the future as well. For example, a newly married
couple who is planning to have
children should look for a home that will accommodate their
needs in the future in terms
of the size, amenities, number of bedrooms & baths,
school districts etc. because as
their family grows, a smaller home with fewer amenities
may not be very accommodating
for them and their children in years to come. It will be
more cost-effective to buy a home
that should accommodate their needs in the future rather
than to purchase another home
at a later date and possibly incur additional expenses.
2.
Mortgage Loan Pre-qualification Or Pre-approval
It is important to contact a mortgage lender to be pre-qualified
or pre-approved before
starting your house hunting adventure. There are good reasons
for obtaining mortgage loan
pre-qualification or loan pre-approval prior to shopping
for a home. Being pre-qualified will
make you aware of how much you are qualified to pay for
a home and what type of mortgage
loan is best for you. During the pre qualification process
you'll learn just how much your
monthly mortgage payment will be for a certain price home,
the amount of down payment
required if any, interest rates, closing costs and any other
expenses that you may incur
during the home buying process. Also, a person who is selling
a home is more likely to
accept your offer if he or she knows that you have been
pre-qualified for at least the
amount of your offer. Click
here to find a Mortgage Lender
3.
Maintaining A Good Credit Report
It is especially important to maintain a good credit history
because most all types of
mortgage loans have a required credit score or credit qualification.
Simple actions such as
paying automobile and credit card accounts in a timely manner
will help maintain a good
credit report. Never borrow or spend more than you can afford.
You will damage your credit
report by paying bills late or not at all. Having no credit
at all is better than having bad credit.
If you have no credit a mortgage lender may sometimes use
a reference from a previous
landlord or the payment history from a phone, utility, gas
or water company that you have
previously had an account with.
You can obtain a copy of your credit report from any of
the following three credit reporting
bureaus: Experian, TransUnion and Equifax. Equifax's web
site address is www.equifax.com;
TransUnion is www.transunion.com;
and Experian is www.experian.com.
4.
Information Your Mortgage Lender Will Require
Mortgage Lenders normally require you to provide the following
information for mortgage
loan pre-qualification or pre-approval:
Proof of income (a pay slip for one month)
Any 401K, retirement income or other sources of income
Your last two months bank statements
W-2 forms for the last two years
If you are self employed bring your last two years
Federal Tax Returns
Make sure all
of the documentation required by your mortgage lender is
in order and that
the information is correct. This will assist in ensuring
there are no unnecessary delays in
the approval process.
5.
Questions To Ask And Things To Do
1. When you first make contact with a Realtor ask about
Buyer Agency. Having a Buyer's
Agent can be an asset to you during the home buying process.
A Buyer's Agent can
represent you and look out for your best interest. Note:
Steve is an ABR (Accredited Buyers
Representative) Click here to learn
more about an Accredited Buyers Representative.
2. Ask your agent to perform a CMA (Comparative Market Analysis)
on the home you have
in mind. The CMA is an analysis of the property values within
the area of the home you are
considering, this will help make you aware of the value
of the home prior to making an offer.
3. Ask how long the home has been for sale. Knowing how
long a home has been for sale
could give you an opportunity to buy the home for less money
if the seller is motivated to sell.
4. Try and find out why the owner is selling. This could
help determine motivation.
5. Ask approximately how much the annual property taxes
will be.
6. Ask if there are any known defects or problems with the
home.
7. Make your offer contingent upon a satisfactory home inspection.
8. Hire a professional home inspector to inspect the home.
Home Inspections usually
pertain to heating, cooling, electrical, plumbing, structure,
health and safety issues.
Click here to find
a Home Inspector
9. Find out if the home is in a flood zone and if the home
will require flood insurance.
10. If you need to sell your current home before buying
another home be sure to make
your offer contingent upon the sale of your current home.
6.
About The Sales Contract/Offer To Purchase
When you make a written offer on a property, you are required
to sign a sales contract. It is
the seller’s decision to either accept, counter or
reject your offer. Upon acceptance, your
offer becomes a legally binding contract and the earnest
money will be deposited normally
in the listing brokers non interest earning account. Your
earnest money is applied towards
your down payment or any expenses you may have in the transaction.
Pay attention to some important parts of the offer to purchase
such as:
The “Voetstoots”
or “As Is” Clause - This clause provides that
you are purchasing the
property in "As Is" condition with all defects as
they exist with the seller making no repairs.
The Possession Date - Possession in the Huntsville,
AL area is usually given at closing
but is sometimes given before or after closing depending
upon what is agreed on.
The Closing Date - The closing date is negotiable
between the buyer and seller and
usually occurs within 30 or so days of acceptance and is
often scheduled at the end the
month. The closing date can be much sooner or much later
than 30 days depending on
whether or not the purchaser is paying cash or is pre-approved
with their mortgage lender
and if any repairs resulting from a home inspection or appraisal
have been finished in time
for closing.
Purchasers Closing Costs - The majority of the purchasers
closing costs are negotiable
between the purchaser and the seller. If you are planning
to pay your loan closing costs or if
you're planning to ask the seller to pay these costs it
is important to obtain a good faith
estimate from your mortgage lender so you'll know just how
much the loan closing costs will
be prior to making your offer.
Home Inspections - As the purchaser you have the
option to make your offer contingent
upon a satisfactory home inspection however, home inspections
are not optional when using
some types of mortgage loans they are sometimes required
to be performed by an approved
home inspector as a condition for obtaining the loan. If
you are planning to do a home
inspection be sure it is clearly stated in your offer to
purchase. Home inspections are
normally performed within a specified period of time after
your offer has been accepted. |
