BUYERS

Decide What You Want

Before you start looking, make a list of what you want and assign each item a priority. Some areas to consider are the location,type of home, and age of the home.


Find Your Realtor®

FInd a professional Realtor® who listens to you, answers your questions, and works to find just the right home for you.  Your Real estate agent should help you navigate the whole process, keep you informed, and go to bat for you to make sure you get the


Know What You Can Afford

  • Most loans require a downpayment. The amount varies, but 20% of the purchase price is typical. If you’re a first-time buyer or fall below certain income thresholds, you may qualify for affordable housing programs. Generally, a higher down payment means better loan terms and a lower interest expense on the mortgage.
  • Qualifying for a loan: A lender will determine how much he thinks you can afford based on your income, employment history, education, assets (e.g., bank account balances, other property, insurance policies, pension funds), and debt.  Check your credit report before the lender does to clear up any problems.

Secure Financing

Unless you’re paying cash for the home, you’ll need a loan. Keep in mind the true price of financing goes beyond the interest rate alone. Consider items such as points, total lender fees, term of the loan, and penalties for early payment. The lender will likely require an appraisal to verify that the home is worth the cost of the loan as well as a physical survey.  Repairs may be required.  Insurance must be purchased. All these conditions and others must be satisfied before a transaction can close.



Make an Offer

You’ve figured out your home-search criteria and what you can afford. Now find a house and make an offer. Your REALTOR® is an invaluable part of this process. She will help you prepare a contract, negotiate, juggle inspections and option periods, and more.

  • Earnest Money
  • Option Fee Money


Close the Deal

After weeks or even months of research and decision-making, you close the transaction, usually at the title company’s office. You will receive notice of everything you will need at closing. The title agent ask you to sign many, many documents and will explain each one. You’ll present a cashier’s check to the seller, sign another document that itemizes closing costs and pay your share of the closing costs. In return, you will receive a deed, transferring ownership rights to you.


Home Loans

THE 4 BASIC HOME LOANS


FHA


  • 96.5% financing
  • Minimum Credit Score 600
  • Maximum Seller Contribution is 6% of Sales Price
  • 25-30 day standard loan processing turnaround 21 days or less if borrower is pre-qualified


Conventional


  • 95% Financing
  • 90%-75% financing allows up to a 6% seller contribution
  • Less than 75% financing allows up to a 9% seller contribution
  • Investor Purchase = Limited to 2% Seller Contribution
  • Minimum Credit Score: 620
  • 25 – 30 day standard loan processing turn times, 21 days or less if borrower is already pre-qualified


USDA


  • 100% Financing
  • Subject to Income and Property Requirements
  • USDA Propertycheck.com
  • Longer processing and underwriting turn times: 35-45 days
  • USDA Status Hotline Number: 254-742-9781


VA


  • 100% Financing
  • Seller must pay $1800 in closing costs for fees that the veteran is not allowed to pay. Seller may pay an additional 4% in seller contributions over and above the $1800
  • Minimum credit score 620
  • Requires Termite Inspection
  • VA Funding Fee is financed into the loan (unless disabled)

EST MONTHLY PAYMENTS

UNDERSTANDING ESTIMATED MONTHLY PAYMENTS\

(PITI) Payment, Interest, Taxes, Insurance


Principal and Interest – The monthly mortgage payment which includes the interest accrued during the prior month plus the scheduled principal.


Generally, mortgage interest paid is a federal income tax deduction. (Check with a CPA). A savings at tax time!


Property Taxes – Are specific to the subject property. We have estimated property taxes based on your target purchase location. Once you have a specific home we can update the numbers to the exact property taxes.


Tax rates vary depending on the city, county, and school district. ALSO: Generally, property taxes are a federal income tax deduction. (Check with a CPA). A savings at tax time!


Homeowners Insurance – Also referred to as Hazard Insurance. This insurance protects you. The property owner, against damage to your home.


The final cost of the insurance policy is determined by the insurance company selected. Some factors that affect the costs are age of the home, claims history (on the subject home and on the applicant), age of the roof, property location, and the applicant’s credit history.


Mortgage Insurance (M .I.) – M.1. or PMI is an insurance policy to protect the lender in the event that a borrower does not make their loan payments and defaults on the loan.


The cost of Mortgage Insurance decreases as your down payment increases. If you put down 20% of the purchase price (or more), you don’t have to pay mortgage insurance.


Options include monthly insurance , one time paid at closing, or selecting a slightly higher interest rate in return for no monthly Ml, among others.


FHA loans require mortgage insurance, regardless of down payment in most cases; VA loans do not ever require mortgage insurance.


Home Owners Association Dues (HOA Dues) – A charge from the community the home is located in. These funds are used for everything from maintenance of the community common areas to managing the neighborhood.


These fees are paid separate from your mortgage but must be included in your debt to income ratio for qualification.