Buying a home? Call ME your REALTOR®
Your REALTOR® can help you determine your buying power — that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders — banks and mortgage companies — offer limited choices.
- Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
- Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you’ll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
- Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
- Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
- Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
- Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
Tips for Buying Your Home
10 Steps to Homeownership
- Step 1: Are You Ready?
- Step 2: Get a REALTOR®
- Step 3: Get Loan Pre-approval
- Step 4: Look at Homes
- Step 5: Choose a Home
- Step 6: Get Funding
- Step 7: Make an Offer
- Step 8: Get Insurance
- Step 9: Closing
- Step 10: What’s Next?
- A Short Guide to Real Estate Lingo and Acronyms
- Calculate Your Income vs. Debt
- Costs Associated with a Home Loan
- Don’t Forget Your Pre-Approval Letter
- Goodbye Inspection, Hello Trouble
- Health Tips for New Florida Residents
- Hiring a Home Inspector
- Home Buying for Young People: Plan Ahead
- Home Sweet Home: Shelter from Taxes
- House-Hunting Tips
- How a REALTOR Can Help
- How Much Do I Have to Save to Buy a Home?
- How to Choose a Home
- How to Choose a Neighborhood
- How to Choose a REALTOR®
- How to Get a Mortgage
- How to Win the Bidding Wars
- Making the Transition from Renting to Buying
- Mortgage Basics
- Negotiating to Yes
- Ready to Buy Your First Home?
- Take Charge When Buying a Home
- Tax Benefits of Home Ownership Are Almost Too Good to Be True
- Terms and Conditions
- The Basics of Making an Offer
- The Bottom Line on Contract Negotiation
- Understand Your Credit
- Wait! Are You Buying the Right House?
- What a REALTOR® Can Do for You
- What Are My Mortgage Options?
- What Is Escrow?
- Why Use a REALTOR®?
5 ways buying a house just changed
WASHINGTON – Jan. 22, 2014 – New mortgage regulations mandated by the Consumer Financial Protection Bureau went into effect this month. The rules are meant to hold lenders liable for bad loans and protect borrowers from loans they can’t afford.
Here are five ways the rules affect a home purchase:
- New servicing standards: Existing homeowners will either get a monthly statement or a coupon book from their lender showing the current loan balance, payment amount and next due date. While some borrowers already receive monthly statements, all mortgage lenders are now required to provide them.
Underwriting criteria: Lenders will require more documentation of ability to repay from new homebuyers applying for a loan. At a minimum, creditors generally must consider eight underwriting factors:
• current or reasonably expected income or assets
• current employment status
• the monthly payment on the covered transaction
• the monthly payment on any simultaneous loan
• the monthly payment for mortgage-related obligations
• current debt obligations, alimony, and child support
• the monthly debt-to-income ratio or residual income
• credit history
3. Debt ratio: The Consumer Financial Protection Bureau set a number for determining if a buyer can afford their mortgage payments. The number – the debt ratio, or what percentage of monthly income is used to pay debt – is 43 percent. Debt includes payments on student and auto loans, credit cards, alimony and child support.
A loan to a borrower with a higher than 43 percent debt ratio is considered high risk and might not get approved. Before, consideration of debt to income was at the discretion of the lender.
Lenders can still make loans that don’t meet the 43 percent debt ratio standard, but might not be able to sell these loans, which creates more risk for the lender.
- Struggling borrowers: Lenders now have certain obligations to meet with people having trouble paying their mortgages. For example, a foreclosure cannot be initiated before 120 days of default. During that time, lenders are to work with homeowners on loan modifications or refinances to keep them in their home.
Timeliness: Other rules require lenders to fix issues quickly and credit payments quickly. Mortgage servicers will now have to call or contact most borrowers by the time they are 36 days late on their mortgage.
One thing that hasn’t changed: Past payment history is still a big deal, including your credit score, for obtaining a home loan.
Sources: Consumer Financial Protection Bureau; and Tim Mislanky, senior vice president and chief lending officer of Wright-Patt Credit Union Inc.
FEILD GUIDE TO DUE DILLIGENCE FOR HOME BUYERS
Purchasing a home is a huge endeavor, and buyers need to be more educated than ever—before they begin the process. This field guide provides links to practical resources on most every aspect of home buying, from establishing credit to negotiating the final contract.
Considerations and Step-by-Step Guides
Home Buying Process Resources, (CreditLoan.com)
First-time Home Buying, (Money Under 30).
The Millennial Home Buying Guide, (SmartAsset blog, May 22, 2013).
Considering a Home, (Freddie Mac)
A Short Guide to real Estate Lingo and Acronyms, (realtor.com®).
Money 101: Buying a Home, (CNN Money).
10 Ways to Prepare for Homeownership, (REALTOR® Magazine).
Establishing or Cleaning Up Credit
Credit Score Needed to Buy a House in 2013, (Home Buying Institute, 2013).
How Credit Scores Affect the Price of Credit and Insurance, (Federal Trade Commission).
Credit Bureaus and Credit Scoring, (USA.gov).
FHA Requirements: Credit Guidelines, (FHA.com).
The Importance of Good Credit, (Freddie Mac)
5 Factors that Decide Your Credit Score, (REALTOR® Magazine).
How much house can you afford? (Interest.com, May 17, 2013).
How Much You Should Spend on a Home, (Wall Street Journal, 2011)
How Much House and Home Mortgage Can I Afford? (SmartMoney, June 28, 2011)
Preparing for Homeownership: Calculators, (Freddie Mac).
How Much Do I Have to Save to Buy a Home?, (realtor.com®).
Calculate Your Income vs. Debt, (realtor.com®).
Hiring a Real Estate Agent
Questions to Ask When Choosing a REALTOR®, (REALTOR® Magazine)
Why You Should Work With a REALTOR®, (REALTOR® Magazine)
Why Use a REALTOR®? (realtor.com®)
Frequently Asked Questions on Home Inspections, (American Society of Home Inspectors).
Hiring a Home Inspector, (realtor.com®).
Goodbye Inspection, Hello Trouble, (realtor.com®).
10 Questions to Ask Home Inspectors, (REALTOR® Magazine)
Making an Offer and Negotiating
The Bottom Line on Contract Negotiation, (realtor.com®).
The Basics of Making an Offer, (realtor.com®).
Negotiating to Yes, (realtor.com®).
Closing Documents You Should Keep, (REALTOR® Magazine)
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
The Complete Book of Home Inspection, (Adobe eBook)
The Complete Idiot’s Guide to Buying a Home, (Adobe eBook)
Financing Your Condo, Co-Op, or Townhouse, (Adobe eBook)
Home Buyer’s Checklist, (Adobe eBook)
Home Buying for Dummies, (Adobe eBook)
Home Buying without the BS!, (Adobe eBook)
How to Get the Best Home Loan, (Adobe eBook)
The Mortgage Answer Book, (Adobe eBook)
Mortgage Myths, (Adobe eBook)
The Real Estate Process, (Adobe eBook)
A Survival Guide for Buying a Home, (Adobe eBook)
Tips & Traps When Buying a Home, (Adobe eBook)
The Unofficial Guide to Buying a Home, (Adobe eBook)