A Buyers Guide to Buying a Home - Making an Offer

Congratulations! You've found the home of your dreams! Before you make a formal offer, you need to make sure the home is priced correctly. You don't want to overpay. Typically used when selling a home, a comparable market analysis (CMA) lists the recent sale information of nearby homes, including how long each home stayed on the market, how close the asking price was to the actual sales price, etc. It then compares the information regarding these houses with the one in question. If you're using an agent, they will do this for you to help you determine a realistic price. There are several online appraisal services that can provide you the same information

as a CMA.  To order an Electronic CMA  visit http://www.Own Realty Group/contact-us 

As you go through this buying process, remember that everything is negotiable, and everything should be in writing. You should be very specific when you prepare your purchase offer, and the seller should be equally specific when they issue their counter offer. Don't forget to think ahead in terms of the top price you're willing to pay. It's a very emotional time and making some decisions early on is a good idea. Other tips include…

• Don't make a verbal offer.
• Don't offer full price unless the home is a real steal. You need room to negotiate.
• Include home inspections. Make sure you have an "out" written into the contract if the inspection turns up major repair problems that cannot be resolved with the seller.
• Make sure the contract includes an "out" in the event you cannot secure financing.
• If you're not using an agent, make sure you consult with a real estate attorney.

Earnest money proves to house sellers that you're serious. After all, they're going to take their home off the market on your behalf. Earnest money is typically between 1-5% of the purchase price, but less is possible. The money should be held by a title company in escrow. Never give the money directly to the house seller. Such a deposit does not mean you're bound to the contract. Your full deposit is credited toward the down payment and closing costs.

Once your offer is accepted, it becomes a binding contract, so be sure to include the necessary contingencies.  Contingencies are clauses that, if not met, will render the contract null and void. Common contingencies are the sale being subject to approved financing, the sale of an existing home and/or a satisfactory home inspection.

A Buyers Guide to Buying a Home - Searching for a Home

OK, this is where the fun begins! Actually looking at homes for sale.  Note: If you choose to retain a Own Realty Group Consultant the home seller may reduce the price by the 2-3% which would have been paid to a buyer's agent.

Beginning your home search

Become familiar with the area where you're considering buying in order to determine if it meets your needs (e.g. near a park, shopping, public transportation, etc.) Drive around. Attend open houses. Talk to friends and colleagues. You may want to select two or three neighborhoods to broaden your options.  It may also be helpful to take photos of each of the home's you're interested in. Make personal notes on the back.

This will help you stay organized and remember what you've seen.

You may also want to create a profile of the home you're looking for in your next home.

• Goals - why are you buying a home?
• Features - what you need vs. what you want?
• Location - is it close to work, in a particular school district, near shopping, etc.?
• Style - what type of home fits your needs, lifestyle and taste?
• Lot - what is the size? What does it feature (wooded, fenced in, etc.)?
• General condition - is it in good shape?
• Neighbors - try to get an idea of what kind of neighbors you will have.
• Taxes - verify taxes and any current assessments on the home you're considering buying.

Where to find homes?

Drive around neighborhoods that interest you.  Classified Ads and Homes Magazines. Start reviewing your local newspaper and pick up a free homes magazine at your local grocery store.

Internet. More than 70% of home buyers today begin their home search on the Internet. Chances are the real estate companies in your community post their homes on their own website or on aggregator real estate sites like Realtor.com, Yahoo! Real Estate or MSN Home Advisor.

To find homes for sale in your area use http://www.Own Realty Group/contact-us etc.

Open Houses. Check out the local newspaper and local real estate websites to identify open houses you would like to attend.

A Buyers Guide to Buying a Home - Types of Loans

What type of loan is right for you?

When choosing a mortgage, find out about…

• The down payment that is required
• Both the interest rate and the annual percentage rate (APR)
• Standard closing costs (and any extra fee the lender may charge and why)
• The possibility that your mortgage will be resold on the secondary market

There are many different types of loans available.

Bridge Loan. Should you sell your home first before buying a new one or buy first and then sell? Most people need the equity in their current home to purchase a new one. But what if you sell first and don't have anywhere to go? A bridge loan may be an option. A bridge loan is a temporary loan that you obtain from your lender until the permanent one can be put in place. Once the primary mortgage is in place, the bridge loan is paid off and closed out. But understand that while waiting for a closing on your home, you will be making two mortgage payments. You will owe your present mortgage payment plus the payment on the bridge loan. Be certain you can afford it.

Conventional Mortgages. A conventional mortgage offers a fixed rate. They typically come in 10, 15 or 30-year loans. Although conventional loans used to require 20% down, most people today put 10% down (68% of buyers today put less than 20% down). Just keep in mind, if you put less than 20% down, you'll be asked to carry private mortgage insurance (PMI). If you're a first-time homebuyer, there are many low down payment loans available that ask for 3-10% down.

Adjustable Rate Mortgages. Adjustable rate mortgages carry an interest rate that changes to keep pace with current market rates. This is a good idea for buyers planning to stay in their home for a short time. If you plan to stay in the home for an extended period of time, you're better of locking in a fixed rate with a conventional loan.

When deciding whether an ARM is right for you, determine the following:

• Will I be able to afford higher mortgage payments if interest rates go up?
• Will I be making other sizable purchases in the near future such as a car or college?
• How long do I plan to own this home?

FHA Mortgages. Loans through The Federal Housing Administration (FHA) help low-to-moderate income home buyers purchase homes with low down payments (approximately 3%). You can use a gift or unsecured loan for the down payment and closing costs. Also, these loans are usually assumable (along with the current interest rate) by the next qualified home owner when you sell your home, which is an added benefit when it comes time to sell.

VA Mortgages. Veteran Affairs loans are great because they provide the opportunity to buy a home with no down payment. They are offered up to a predetermined loan amount (not more than $200,000) and are assumable by qualified buyers. To qualify for a VA loan, the veteran must be on active duty or have a discharge (other than dishonorable), along with one of the following: 

• 180 days active (not reserve) duty between September 16, 1940 and September 7, 1980
• 90 days service during a war (Korean, Vietnam, Persian Gulf, etc.)
• Six years service in the National Guard

Assumable Mortgages. An assumable mortgage is a loan that stays with the property. It is simply transferred to the qualified home buyer. This means considerable savings for the next buyer. It may include no points, no interest rate change and low closing costs. Assumable mortgages are often the most valuable part of a property.

FHA loans given before December 1, 1986 and VA loans given before March 1,1988 are completely assumable to the qualified buyer. This means that you can take the loan along with the real estate, just as it stands.

Balloon Mortgages. The Balloon Mortgage has a fixed rate for a certain time frame, typically seven years, followed by a "balloon" payment requiring repayment of the entire home loan balance. Interest rates are generally lower than conventional loans. People may choose this type of loan because they plan on either selling the home, paying it off, or refinancing before the balloon payment is due. If you put less than 20% down on a loan, you will likely have to pay PMI or Private Mortgage Insurance. PMI protects the lender against a loss in the event of default by the borrower. You can ask your mortgage company to remove the PMI if you've paid 20% of the loan. However, you will be asked to provide an appraisal.  Most lenders require you pay real estate taxes and insurance on a monthly basis. This cost is included in your monthly mortgage payment, placed in an escrow account, and paid out by your mortgage company.

By securing financing, you are well on your way to your next home!

A Buyers Guide to Buying a Home - Getting a Loan

By now you should be well into your home search. If you haven't already been pre-approved for a loan, now is the time. Pre-approval lets you know in advance how much you can afford to spend, gives you more negotiating power because you have financing in place and can save you money by locking in an interest rate early in the buying process.

Getting a loan to buy a house is now easier than ever. You can actually receive loan approval in as little as four minutes. No money for a down payment? Poor credit? A first-time home buyer? No matter what your needs are, there are hundreds of loan products available to suit most financial situations.

A Buyers Guide to Buying a Home - Pre-qualification vs Pre-approval

What's the difference between Pre-qualification and Pre-approval?

Pre-Qualification is a "guesstimate" of what a buyer might qualify for prior to actually submitting a mortgage application. Based on the unverified financial information you provide, the lender uses a quick calculation to arrive at a loan amount. Pre-Approval means that the lender has verified your financial information and has actually committed money in your name for a specific loan type and amount. With today's technology, you can receive loan pre-approval in minutes.

A Buyers Guide to Buying a Home - 7 Steps To Home Financing

These 7 steps can save you time & money:

1. Credit Report - Contact a credit bureau and get a credit report on yourself, just to make sure your report is accurate. If you don't like what you see, it's time to try to clean up any problem items or clear up any mistakes.  You may also want to consider contacting a consumer credit counselor for help.
2.  Save Money - Skip a vacation, movie or dinner out to save money for a down payment and closing costs.  Try not to buy anything on credit and if you do, pay it off quickly. Try to avoid taking on another large credit expense or even applying for another credit card.
3. Get Pre-Approved for a Mortgage - - It pays to get pre-approved for a mortgage early in the process. Some think pre-qualifying for a loan is enough, but it's not. Pre-approval gives you more power when you've found that perfect house.
4. Buying Power. Lets you know in advance how much you can afford to spend on a home.
5. More Control. You have the negotiating power of a "cash" buyer when you can prove that you have financing in place.
6. Faster Closing. You can close in as little as 15 days compared to the average 60 days for those that are not yet approved.
7. Saves Money. You can lock in an interest rate early for a faster closing and better rate. (Ask your lender about a 30-day rate lock instead of the normal 60 days.)

A Buyers Guide to Buying a Home - Knowing What You Can Afford

Congratulations on making the decision of buying a new home! The first thing you need to decide is how much you can afford. Determining this early in the buying process will save you a lot of time and frustration. 

Not only will you have a clearer idea of the amount you can spend, but you can also eliminate all those homes that are not in your range. You may even find that being pre-approved opens the doors to a home you hadn't considered before.

A Buyers Guide to Buying a Home - Getting Started

Before you begin the process of buying a property or home you need to consider the following:

1. Determine Your Buying Objectives. Why do you want to buy a home? Need more room?  Downsizing? Tired of paying a monthly rent for nothing in return?
2. Determine Your Needs. Prioritize what is most important to you in a home (style of home, size of home, neighborhood, schools, cost, etc.) Keep in mind, there is a difference between what you need and what you want, so be realistic.
3. Become Informed. If you're a first-time home buyer, learn everything you can about the buying process.  This series of informational sections will help. Research the market by searching the internet to see what homes are for sale in the areas you desire. As well as looking at classified ads and home for sale magazines, and maybe even driving around neighborhoods you're interested in. After that you should have a good feel for what's available.
4. Get Your Financing in Order. This is not the time to make any major purchases on a credit card. Don't change types of work. More financing tips will be covered in the next section.

A Buyers Guide to Buying a Home

Buying a home can be very exciting and scary at the same time. Most first time home buyers will experience a full range of emotions as they go through the buying process. This is a completely normal reaction.

Homeownership is at an all-time high in America, not just because of low interest rates, but also because more and more people are realizing the benefits, such as:

•     Credit - having a mortgage that you pay on time every month improves your credit.
•     Investment - home values are constantly appreciating which helps you build equity. That makes real estate a good investment.
•     Pride - there's nothing like the feeling of buying and owning your own home.
•     Tax Advantages - interest on your home is tax deductible.

It takes three things to buy a house: some cash, dependable income and good credit. If you fall short in any of these areas, don't worry. There are plenty of programs out there to help achieve homeownership no matter what your financial situation.