What every buyer should know

 As your Realtor, I will assist  you in every stage of the buying process. My goal is to find the right home, at the right price, with the lease amount of stress. 

I will: 

• Help you find the right home
• Help with negotiating term
• Help with negotiating price
• Help with Comps

You can trust me to:

•  Explain all the steps involved before they happen  
•  Return your calls and texts promptly 
•  Act as your connection to all relevant services 
•  Provide immediate feedback and information as situations change or arise
•  Fully represent your point-of-view and best interests in all negotiations  
•  Make your buying experience as simple, smooth and stress-free as I possibly can 

Where to start 

It's never to early to start working with a lender. DON’T waste time and money trying to raise your credit score or save for a huge down payment. With the help of my lenders, we will assist you every step of the way. If you’re dreaming of owning a home, give me a call.

Your Credit

My lenders will design a plan and guide you through the steps needed to improve your credit score. They will inform you of which debts to pay off  and which accounts to increase.  There are no fees for this service. 

Down Payment and Closing Cost

You will need to have some money to assist with down payment and closing cost, but with the  assistance programs, and help from the seller,  you may not as much as you think.  This is determined by your loan. 

If you haven't already.. GIVE ME A CALL..and let's open a door to a new beginning.

Conventional

Conventional mortgage loans are also known as Fannie Mae or Freddie Mac loans. The guidelines and credit requirements are established by either Fannie Mae or Freddie Mac. Generally, the credit requirements for this program type are a bit more stringent than a government loan.

FHA

FHA, or Federal Housing Administration, is a mortgage loan that is insured by FHA. FHA and/or HUD (Department of Housing and Urban Development) set the regulations and requirements to qualify for this type of loan. Some benefits of FHA Mortgage Loans are:

• Lower down payment
• Less stringent credit rating

VA

VA, or Veterans Administration, is a mortgage loan that is insured by the Veterans Administration. This program is only available to Veterans or the eligible dependents of Veterans. VA sets the service requirements to qualify for a VA backed mortgage loan. A certificate issued by the VA will document your eligibility for a VA insured loan. Some benefits of a VA Mortgage Loans are:

• No down payment required
• No monthly Mortgage Insurance

USDA/RD

USDA/RD, or United States Department of Agriculture/Rural Development, is a mortgage loan that is insured by the USDA. The mortgage program has less stringent credit requirements then a conventional loan and can only be used on homes in qualified areas set by the USDA Rural Development. Some benefits of a USDA/RD Mortgage Loans are:

• No down payment
• Low monthly Mortgage Insurance

Bond Programs

Bond Programs are community based mortgage loan programs.  Typically, the Bond programs are designed to help meet the housing needs of low-to-moderate income applicants. The programs are typically designed for first time homebuyers with rates that are usually below the current market. Some benefits of a Bond Programs are:

• Down payment assistance is often available to qualified applicants
• Lower interest rate
• Generally less stringent credit requirements
• Closing costs assistance may be available

FHA 203k

FHA 203k mortgages loans are also known as FHA Renovation Loans. These loans are for homes needing repairs or renovations. Normal FHA credit qualifications will still have to be met.

Construction

Construction Loans are loans which offer the ability to either construct a residence from the ground up or renovate an existing property. Gulf Coast Bank and Trust Company offers both a single close construction loan, as well as a two time construction loan. Differences in the two programs can be discussed with your mortgage loan originator.

Reverse

Reverse Mortgage program or The Home Equity Conversion Mortgage (HECM) is a mortgage loan that enables borrowers to borrow against the equity in their home. These loans are designed for senior homeowners who are the age of 62 or older.

1. Copy of driver’s license for applicant and co-applicant(s);
2. Copies of your past two years’ tax returns;
3. Copy of Social Security Card for each applicant and co-applicant(s).
4. Copies of W-2s for the past two years;
5. Copies of the two most recent consecutive pay stubs showing year-to-date earnings;
6. Copies of checking and saving account statements for past three months (all pages);
7. Copies of quarterly or semi-annual statements for checking, savings, IRAs, CDs, money market funds, stocks, 401k, profit sharing, etc.;
8. Documentation of any assets used for down payment, closing costs and cash reserves.
9. Employment history for the previous two years (include explanations for any gaps in employment).
10. Residency history during the past two years, with name, phone number, address and account number of land or mortgage company; for rental property, copies of leases;
11. Copy of sales contract when ratified;
12. Canceled earnest money check when it clears or corresponding bank statement, if applicable;
13. A check to pay for your appraisal and credit report if required

Once you find the home you want to buy, the next step is to write an offer – which is not as easy as it sounds. Your offer is the first step toward negotiating a sales contract with the seller.

The offer is much more complicated than simply coming up with a price. It's a contract binding for both you and the seller.  There are  protections and contingencies built in to protect your investment and limit your risk.

In an offer to purchase real estate, you include not only the price you are willing to pay, but other details such as: how you intend to finance the home, who pays what closing costs, what inspections and repairs are performed, timetables, whether personal property is included in the purchase, terms of cancellation, and how to settle disputes should they occur.

Earnest Money Deposit
After you have come up with an offer price, the next step is to determine how large a deposit you want to make with your offer. You want the "earnest money deposit" to be large enough to show the seller you are serious, but not so large you are placing significant funds at risk. I will assist you in determining a fair deposit.

The Closing Date
You will need to include a closing date as part of your offer (typically 30 to 45 days depends on the lender).  You will need to be flexible because this date can change for several reasons. Have a backup plan ready just in case.

Contingencies in a Purchase Offer
In most purchase transactions there may be a slight challenge or two, but most things will go quite smoothly. However, you want to anticipate potential problems so that if something does go wrong, you can cancel the contract without penalty. These are called "contingencies," and you must be sure to include them when you offer to buy a home.

Since you probably need a mortgage to buy the home, a condition of your offer should be that you successfully obtain suitable financing. Another condition should be that the property appraises for at least what you agreed to pay for it. During the escrow period, you are likely to require certain inspections. Another contingency should be that it pass those inspections.

Basically, contingencies protect you in case you cannot perform or choose not to perform on a promise to buy a home. If you cancel a contract without having built-in conditions and contingencies, you could find yourself forfeiting your earnest money deposit, or worse.

Important Dates that are stated in the purchase agreement (failing to meet deadlines can allow the seller to void your contract)
The expiration date of offer
When to deliver the deposit
A certain number of days to complete inspection
A certain number of days to authorize lender to proceed with loan
A certain number of days to provide the seller a copy of the appraisal (if value is less then offer)
A certain number of days to complete final walk through

Closing costs are fees that are paid at the closing of a real estate transaction. The closing is the point in time when the title of the property is transferred from the seller to the buyer.  Both the buyer and the seller will have fees to pay at closing. Closing costs are determined by the location of the property and the type of loan you select and the lender fees.  Closing cost can range between 2 to 5 percent of the purchase price.  So, if you home cost is $150,000, you might pay between $3,000 to $7,500. 

Here is a list of fees that could be included in closing.

• Application Fee: This fee covers the cost for the lender to process your loan application.
• Appraisal: This is fee is usually paid  by the buyer prior to the closing. If paid in advanced you will see a credit for the appraisal on your closing documents
• Closing Fee or Escrow Fee: This is paid to the title company  for conducting the closing. The title company oversees the closing as an independent party in your home purchase.
• Courier Fee: This covers the cost of transporting documents to complete the loan transaction as quickly as possible.
• Credit Report:  This is the cost the bank was changed to obtain your credit report.
• Escrow Deposit for Property Taxes & Mortgage Insurance:  Most loans will require to you pay in advance three months of property tax and mortgage insurance payments at closing.
• FHA Up-Front Mortgage Insurance Premium (UPMIP): If you have an FHA loan, you’ll be required to pay the UPMIP of 1.75% of the base loan amount. You are also able to roll this into the cost of the loan you prefer.
• Flood Determination or Life of Loan Coverage: This is paid to a third party to determine if the property is located in a flood zone. If the property is found to be located within a flood zone, you will need to buy flood insurance. The insurance, of course, is paid separately..
• Home Owners Association Transfer Fees:  The fee will be assessed for the year and then split between the buyer and the seller. The seller will pay the portion prior to the closing and the buyer will pay the portion following the closing.
• Homeowners’ Insurance: The buyer will pay the first year's premium at the closing.
• Lender’s Policy Title Insurance: This is insurance to assure the lender that you own the home and the lender’s mortgage is a valid lien, and it protects the lender if there is a problem with the title. Similar to the title search, but always a separate line item..
• Owner’s Policy Title Insurance: This is an insurance policy that protects you in the event someone challenges your ownership of the home. It is usually optional.
• Loan Discount Points:“Points” are prepaid interest. One point is one percent of your loan amount. This is a lump sum payment that lowers your monthly payment for the life of your loan
• Origination Fee: This covers the lender’s administrative costs. It’s usually about 1 percent of the total loan.
• Prepaid Interest:Most lenders will ask you to prepay any interest that will accrue between closing and the date of your first mortgage payment.
• Private Mortgage Insurance (PMI): If you’re making a down payment that’s less than 20% of the home’s purchase price, chances are you’ll be required to pay PMI. If so, you may need to pay the first month’s PMI payment at closing.
• Property Tax: Typically, lenders will want any taxes due within 60 days of purchase by the loan servicer to be paid at closing.
• Recording Fees: A fee charged by your local recording office, usually city or county, for the recording of public land records.
• Survey Fee: This fee goes to a survey company to verify all property lines and things like shared fences on the property.  This is not required in all states.
• Title Company Title Search or Exam Fee: This fee is paid to the title company for doing a thorough search of the property’s records. The title company researches the deed to your new home, ensuring that no one else has a claim to the property.
• Transfer Taxes: This is the tax paid when the title passes from seller to buyer.
• Underwriting Fee: This also goes to your lender, covering the cost of researching whether or not to approve you for the loan.
• VA Funding Fee: If you have a VA loan, you may be required to pay a VA funding fee at closing (or you can roll this fee into the cost of the loan if you prefer). This is a percentage of the loan amount that the VA assesses to fund the VA home loan program, however some borrowers are exempt from this fee. The percentage depends on your type of service and the amount of your down payment.

If you have been approved for a mortgage, you may think you're all done, but you must maintain the same credit profile that led to your approval because the lender will recheck your credit just prior to the closing and will also verify employment to make sure nothing has changed.

Below are mistakes that are commonly made before closing.

1. Don’t apply for new credit: It may seem natural to apply for a credit card at a home improvement store or a furniture store when you are about to become a homeowner, but applying for credit can lower your credit score.
2. Don’t close any credit accounts: Older credit cards with low activity may have a positive impact your credit score.
3. Don’t move your money between accounts without a paper trail: If possible, it’s best to move the cash you will need for your home purchase into one account before you apply for a mortgage. If not, make sure you have complete and accurate records readily available.
4. Don’t make a new loan and shop with existing credit cards: In addition to your credit score, your debt-to-income ratio is extremely important to a loan approval. If you take on more debt you could be in danger of going above the maximum acceptable debt-to-income ratio.
5. Don’t skip a payment or make a late payment: One of the most important elements of your credit score is your history of on-time, in-full payments, so don’t get so caught up in your move that you forget to keep up with paying basic bills.
6. Don’t buy a car: You may be feeling that a new car would be a nice addition to the driveway of your new home. Resist that feeling. Even if you can easily afford a new car, the depletion of your savings or the addition of a new car loan could derail your mortgage application. Wait until after closing
7. Don’t change jobs if you can help it: While a job change could mean a raise or a path to a better future, it could also delay your settlement. Your lender needs to verify employment and will need paystubs to prove your new income before your loan can go to settlement.
8. Don’t spend your savings: You’ll need cash on hand at the settlement for your down payment and closing costs and your lender may even verify your cash reserves one more time, so make sure the funds stay in place.