Tired of Renting...?

Here are some tips on buying a home:

 
A home is the most expensive single item most people will ever buy. You are the only one who can decide on the type of home & neighborhood you want to live in.  A lot of the time, mortgage payments are the same or less than rent payments & you don't have the fear of your landlord raising the rent!

First, you need to know what your affordable price range is. You can go to your lender & at no cost ask for pre-approval for a mortgage loan. Most banks can give you an actual certificate of financing & establish a mortgage amount that you likely can borrow.

Once you make those decisions & start looking for a home, it is important to have some basic information about legal matters before you sign any contracts or pay out any money. (If you are purchasing your first home, first time home buyer counseling is available by contacting HUD to find a counselor near you. You can call 1-800-569-4287 or go to HUD's web site.

As a buyer, you need to have your own real estate agent who is working for you. Your own real estate agent will not cost you anything because they are paid out of the sales price of the house you are going to purchase.

Let your real estate agent know your price range. When looking at several homes, make notes & keep a checklist of your requirements handy so you can remember the important information about each house & how well it fits your needs.

The basics of a NC Real Estate Purchase:

Application

Make sure there is no false information on your application. Sometimes you do not see the written application until the day you close on your loan, but do not be afraid to point out wrong information, which may concern your salary, your savings, the worth of the house or who is borrowing the money.

Title Insurance

The cost will be charged to you as part of the loan fees. Most lenders require title insurance to protect their security interest in the property. Problems with title are not common, but if one does arise it can be expensive to resolve. The title insurance coverage will provide legal representation & pay any expenses required to settle the issue. The title insurance ensures that you are receiving a "clear" title from the seller. This means that there are no existing liens on the property & no defects in the title. "Liens" are legal claims by a creditor of the seller. Liens are the result of the unpaid balance of a mortgage or other loan to the owner. Liens result from judgments issued against the owner by a court or from governmental bodies for unpaid taxes or utility assessments. A lien stays with the property. A lien must be formally recorded in the public records of the courts where deeds are registered, in the county where the property is located.

Earnest Money

When you find a home to purchase, you & the seller will sign an agreement of sale. This means you, as the buyer, will pay a deposit, often called "earnest" money to secure the deal by showing that you intend to follow through with the purchase. In return for your deposit, the seller cannot accept an offer from another buyer. The agreement of sale is critical to the entire transaction. Every detail should be included. Is it refundable under certain circumstances. The amount of the deposit can vary widely depending on the price of the home & will be credited to you at the loan closing.

Appraisals

The appraisal is a professional assessment of how much the home is worth. It is based on the size of the home, condition of the home, size of the property & recent prices of nearby comparable homes.

Residential Property Disclosure

NC law requires that most sellers furnish a residential property disclosure that describes the condition of all systems in the home.

Good Faith Estimate

Before you get to your loan closing your lender should give you a form, which is called a "Good Faith Estimate." This form will tell you what the costs will be when you get to the loan closing. It will also show you the rate of interest you will be paying, an estimate of your monthly mortgage payment, how long you have to pay the loan, closing costs & other costs & fees, such as broker fees. The lender must either give you this estimate at the time you apply for a loan or mail to you within the next three business days. If you don't understand something on the Good Faith Estimate, or it doesn't look right - seek help.

Down Payment

The down payment is the money you must come up with on your own to get a mortgage from your lender. The amount of down payment can vary depending on the price of the home & the amount of mortgage for which you are pre-qualified.

Truth-in-Lending Disclosure

You will be given a Truth-in-Lending Disclosure statement. This document tells you the exact amount of the loan; the annual percentage rate (APR) or the cost of the loan over the term of the loan; the number of payments; how much each payment will be; whether the loan is a fixed or variable rate & any other costs. This is an important document that you will need to read carefully before signing.

HUD-1 Settlement Statement

Closing the deal! The closing is the formal proceeding where the transaction is made final. The buyer, seller, realtor & lender meet to exchange the deed for the money. A settlement statement - a financial document detailing the transaction - is prepared at the closing. It details all the costs & credits to buyer, seller, realtor, deed recording, taxes, and utilities involved in finalizing the sale. The HUD-1 Settlement Statement should not be significantly different from the Good Faith Estimate. Remember do not sign any blank documents or any documents you have not read or understand & keep copies of all your loan documents.

For the Buyer, step by step:

1. Buyer makes offer, seller accepts (that sure sounds easier than it actually is!)
2. Earnest money is placed in the listing agency's trust fund
3. Lender orders appraisal
4. Inspections are ordered
5. Repairs are negotiated with seller & performed by qualified contractors
6. Termite inspection is ordered within 30 days of closing
7. Surveys are ordered after a successful appraisal & inspections (if being done/paid for)
8. Buyer applies for hazard insurance,ý information goes to the lender/closing attorney
9. Nearing closing date, buyer arranges for utilities to be switched turned on
10. Closing takes place at buyers attorney's office. The seller's attorney has forwarded signed deeds to the closing attorney
11. Buyer gives attorney certified funds for closing & signs loan papers/other required documents
12. Attorney records new deed at the courthouse & disperses funds due to all parties

What are the buyers expenses?

1. Home inspections
2. Surveys (if applicable)
3. Buyers share of yearly property taxes, property association dues & other similar fees (prorated for date of closing)
4. Fees for a title search & duties performed by their attorney, title insurance policies, hazard insurance for a year, downpayment & lender fees, flood zone certification fees (if applicable)
5. Cost to record the new deed
6. Association dues (if applicable)

Ginny Reed

REALTOR
910-578-5416 Direct
 
Specializing in Military Moves & 1st Time Homebuyers