Home Buyer’s Guide
How to get started in buying a home.
How Much House?
House hunting begins at home—with planning. Before you grab the road maps and hit the streets, you need to do some planning. Pre-qualifying is talking to a lender and determining how much house you can afford to buy. Knowing your affordable price range will bring your house-hunting into focus. Many lenders will send out all required verification and pre-approve you for a mortgage after reviewing your personal financial information so you will have it ready when it is time to make an offer. How much house you can afford to buy depends on two factors: how much you can afford for the monthly housing payment, and how much you can invest in the down payment. Monthly payments include principal and interest on the mortgage loan, and property taxes and insurance against fire and other hazards. These four costs are often abbreviated “P.I.T.I.”. For some buyers and lenders, monthly housing costs may also include homeowners association dues, condominium fees, and mortgage insurance.
What To Look For
Choosing a place to live can be one of the most exhilarating experiences of a lifetime. We’ve learned through working with home seekers over the years that the best approach is to be prepared. Literally, to do some homework. What do you like or dislike about where you currently live? In your “laundry list” of wants, what is most important? Are you downsizing? Looking in a particular school district? Is one style of house your dream?
House Hunting Begins At Home
The search can begin in your present home so we’ve developed some questions to stimulate your thinking and help you identify your needs and preferences. Once you’ve clarified what you like and don’t like in your present community, you will have a better idea of what you want to find.
“The time to think about selling your home is when you’re buying it.” In other words, what appeals to you as a buyer today will probably also appeal (or what turns you off will be a turn off) to buyers tomorrow. A careful house hunter will benefit years from now when it’s time to sell to an equally value-conscious buyer.
Negotiating The Purchase
You’ve found it – your “dream house”! You want to buy it. Now what? We will help you prepare an offer to purchase with the type of financing you desire. We will submit the offer, your pre-qualification letter and a deposit check to the sellers’ agent. This will be the sales contract once the seller accepts. When you and the seller sign, you are agreeing to the contract conditions. Before you sign it, read it carefully and make sure you understand every detail. Ask questions. Verbal agreements should be written into the contract. This is where we or an attorney, if you desire one can give you the assistance you need.
Locating The Right Loan
You have the option of shopping around for the best terms you can obtain. It is important that you find a lender that is a seasoned professional and that you are comfortable with. Generally, a mortgage acceptance requires 15-30 days for conventional, 30-45 days for VA and FHA from application to approval. In some cases, loans may be approved more quickly.
Fire And Hazard Insurance
Most lenders require a home buyer to provide at settlement a one-year paid receipt for a fire and hazard insurance policy, often called homeowner’s insurance. These policies are available from several leading insurance companies through Long & Foster’s Insurance Agency, Inc., or the insurance company of your choice. Fire and hazard insurance provides protection for fire and other perils to your home and its contents.
AS part of the contract, most buyers will write in the ability to have a home inspection. The purpose of this inspection is to make sure the house and its systems are in acceptable and proper condition. Depending on the property, additional inspections and tests involving radon, chimneys, well yield, water quality and septic systems, for instance are desired. All inspections and tests have contractual deadlines that keep the process moving forward in fairness to both parties.
Tonight you can pop open the champagne, but today there will be a lot of paper signing and a poignant passing of the keys (don’t forget the garage keys and electric door opener, too).
At the settlement will be an attorney or title company representative (chosen by the buyers), all buyers, listing and selling brokers, and all owners. The home seller should bring all warranties on equipment and any instructions on equipment maintenance or operation.
The attorney will have searched the title, provided title insurance, and obtained old and new lender instructions. First, all unresolved walk-through deficiencies, if any are resolved.
With the buyer, the attorney explains the deed of trust or mortgage; the deed of trust note or mortgage note; VA, FHA, or lender forms; and settlement sheets. Buyer signs all these and pays the balance of the down payment and buyer’s closing costs, typically with wired funds.
Different Mortgage Strategies
When it comes to paying for a home, buyers today have an almost unlimited number of financing options from which to choose.
Here’s a run-down on the main types of financing every home buyer should know today. Interest rates are intended for illustration only; ask your Long & Foster Sales Associate for current market rates.
Ask your Long & Foster Sales Associate for a copy of the “Understanding the Role of the Real Estate Agent” (LF1192, for use in the state of Maryland only);”A REALTORS® ROLE” (LF1193, for use in the state of Virginia only); or “The Agency Disclosure Brochure” (LF1195, for use in the District of Columbia only).