Home Buyers
Let me help you every step of the way. When purchasing a home, you are faced with a multitude of
decisions! The primary one is whether you are actually prepared to purchase a home. Locating the
perfect home is not always an easy task, and obtaining a mortgage loan can be a complex and tiring
process. Although, once you have determined that you are ready to move forward with the required
effort towards your home-purchasing goal, the rewards are unquestionable.
I will make the process of purchasing a home easier, more enjoyable, less time-consuming, and less
expensive than if you undertook this challenge on your own. I will help you prepare so that sellers
perceive you as a preferred buyer, help you locate and assess properties for sale that meet your
specifications, and help you through the myriad of details attending the actual purchase.
I am always familiar with the current homes on the market, and I know neighborhood values well, so I
can help you determine which properties are fairly-priced and in good condition before you start your
search. As a full time Realtor®, you can contact me at any time; Why? Because my goal is to make
your experience comfortable, guided, fast, efficient and successful.
Your First Step
Your first step to buying a home is to first ask yourself why you want to buy a home: to stop paying
rent? To start building equity? To have a place of your own? To raise a family? To entertain business
friends & family? To move up to a bigger house? Next, list what kind of home you'd like and where you
would like to be. Be specific. Separate the "must haves" from the "want to haves."
Think about home styles. How much space do you need? Does your situation require a one-level
home, or are stairs acceptable? Consider size and kind of property. Do you want a newer home, or
maybe an older one to fix up? Someday you or your heirs will want to sell. Consider how long you
expect to live in this particular home.
Your Next Step: Loan Pre-Qualification
Once you have addressed the above needs, your next step in the purchasing process is to get
pre-qualified with a mortgage company. This can be done over the phone or even online in a matter
of minutes.
Call me and I will refer you to a mortgage professional that has an excellent reputation and track
record for successfully acquiring loan approval for his/her clients.
I Will Find The Right Homes For You
Once you've been pre-qualified and know what price range you want to stay in, I can help you
determine which properties fit your needs by using the (MLS) Multiple Listing Service system to locate
them.
I have the best possible resources and communication systems available today to help you locate the
homes on the market that match your specifications. You can even search my listings here at my
website.
I Will Help You Every Step Of The Way
I will help you complete your financing and inspections, and close on the transaction. My top priority is
to make sure that your home buying experience is pleasant, cost-efficient, and successful.
*********************************************************************************************************************************
Real Living The Right Choice
7 Reasons to Own Your Home
1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your
mortgage, your property taxes, as well as some of the costs involved in buying your home.
2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are
normal, median existing-home sale prices have increased on average 6.5 percent each year from
1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL
ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15
percent over the next decade, creating continued high demand for housing.
3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you
build equity ownership interest in your home.
4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can
generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal
income tax.
5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing
costs may actually decline as you own the home longer. However, keep in mind that property taxes
and insurance costs will increase.
6. Freedom. The home is yours. You can decorate any way you want and benefit from your
investment for as long as you own the home.
7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in
community activities, lets you and your family establish lasting friendships, and offers your children the
benefit of educational continuity.
Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs.
Rent” calculator at www.GinnieMae.gov.
*********************************************************************************************************************************
Common First-Time Home Buyer Mistakes
1. They don’t ask enough questions of their lender and end up missing out on the best deal.
2. They don’t act quickly enough to make a decision and someone else buys the house.
3. They don’t find the right agent who’s willing to help them through the homebuying process.
4. They don’t do enough to make their offer look appealing to a seller.
5. They don’t think about resale before they buy. The average first-time buyer only stays in a home
for four years.
Source: Real Estate Checklists and Systems, www.realestatechecklists.com.
*********************************************************************************************************************************
Lender Checklist: What You Need for a Mortgage
□ W-2 forms — or business tax return forms if you're self-employed — for the last two or three
years for every
person signing the loan.
□ Copies of at least one pay stub for each person signing the loan.
□ Account numbers of all your credit cards and the amounts for any outstanding balances.
□ Copies of two to four months of bank or credit union statements for both checking and savings
accounts.
□ Lender, loan number, and amount owed on other installment loans, such as student loans and
car loans.
□ Addresses where you’ve lived for the last five to seven years, with names of landlords if
appropriate.
□ Copies of brokerage account statements for two to four months, as well as a list of any
other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
□ Copies of your most recent 401(k) or other retirement account statement.
□ Documentation to verify additional income, such as child support or a pension.
□ Copies of personal tax forms for the last two to three years.
*********************************************************************************************************************************
Factors That Decide Your Credit Score
Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining
a mortgage. The following factors affect your score:
1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how
late? Bankruptcy filing, liens, and collection activity also impact your history.
2. How much you owe. If you owe a great deal of money on numerous accounts, it can indicate that
you are overextended. However, it’s a good thing if you have a good proportion of balances to total
credit limits.
3. The length of your credit history. In general, the longer you have had accounts opened, the better.
The average consumer's oldest obligation is 14 years old, indicating that he or she has been
managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have
credit histories shorter than 2 years.
4. How much new credit you have. New credit, either installment payments or new credit cards, are
considered more risky, even if you pay them promptly.
5. The types of credit you use. Generally, it’s desirable to have more than one type of credit —
installment loans, credit cards, and a mortgage, for example.
For more on evaluating and understanding your credit score, visit www.myfico.com.
*********************************************************************************************************************************
6 Creative Ways to Afford a Home
1. Investigate local, state, and national down payment assistance programs. These programs give
qualified applicants loans or grants to cover all or part of your required down payment. National
programs include the Nehemiah program, www.getdownpayment.com, and the American Dream Down
Payment Fund from the Department of Housing and Urban Development, www.hud.gov.
2. Explore seller financing. In some cases, sellers may be willing to finance all or part of the purchase
price of the home and let you repay them gradually, just as you would do with a mortgage.
3. Consider a shared-appreciation or shared-equity arrangement. Under this arrangement, your
family, friends, or even a third-party may buy a portion of the home and share in any appreciation
when the home is sold. The owner/occupant usually pays the mortgage, property taxes, and
maintenance costs, but all the investors' names are usually on the mortgage. Companies are
available that can help you find such an investor, if your family can’t participate.
4. Ask your family for help. Perhaps a family member will loan you money for the down payment or act
as a co-signer for the mortgage. Lenders often like to have a co-signer if you have little credit history.
5. Lease with the option to buy. Renting the home for a year or more will give you the chance to save
more toward your down payment. And in many cases, owners will apply some of the rental amount
toward the purchase price. You usually have to pay a small, nonrefundable option fee to the owner.
6. Consider a short-term second mortgage. If you can qualify for a short-term second mortgage, this
would give you money to make a larger down payment. This may be possible if you’re in good
financial standing, with a strong income and little other debt.
*********************************************************************************************************************************
Tips to Guide for Your Home Search
1. Research before you look. Decide what features you most want to have in a home, what
neighborhoods you prefer, and how much you’d be willing to spend each month for housing.
2. Be realistic. It’s OK to be picky, but don’t be unrealistic with your expectations. There’s no such
thing as a perfect home. Use your list of priorities as a guide to evaluate each property.
3. Get your finances in order. Review your credit report and be sure you have enough money to cover
your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage. This
will save you the heartache later of falling in love with a house you can’t afford.
4. Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if
you feel you need a second opinion, but be ready to make the final decision on your own.
5. Decide your moving timeline. When is your lease up? Are you allowed to sublet? How tight is the
rental market in your area? All of these factors will help you determine when you should move.
6. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you
hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy
as well as the type of mortgage terms that will best suit you.
7. Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.
8. Get help from a REALTOR®. Hire a real estate professional who specializes in buyer
representation. Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is
working only for you. Buyer’s reps are usually paid out of the seller’s commission payment.
*********************************************************************************************************************************
Questions to Ask Your Lender
1. What are the most popular mortgages you offer? Why are they so popular?
2. Which type of mortgage plan do you think would be best for me? Why?
3. Are your rates, terms, fees, and closing costs negotiable?
4. Will I have to buy private mortgage insurance? If so, how much will it cost, and how long will it be
required? (NOTE: Private mortgage insurance is usually required if your down payment is less than 20
percent. However, most lenders will let you discontinue PMI when you’ve acquired a certain amount of
equity by paying down the loan.)
5. Who will service the loan — your bank or another company?
6. What escrow requirements do you have?
7. How long will this loan be in a lock-in period (in other words, the time that the quoted interest rate
will be honored)? Will I be able to obtain a lower rate if it drops during this period?
8. How long will the loan approval process take?
9. How long will it take to close the loan?
10. Are there any charges or penalties for prepaying the loan?
Used with permission from Real Estate Checklists & Systems, www.realestatechecklists.com
*********************************************************************************************************************************
Budget Basics Worksheet
The first step in getting yourself in financial shape to buy a home is to know exactly how much money
comes in and how much goes out. Use this worksheet to list your income and expenses below.
INCOME ...............................................................................................................
Take Home Pay (all family members) ...................................................................
Child Support/Alimony...........................................................................................
Pension/Social Security.........................................................................................
Disability/Other Insurance.....................................................................................
Interest/Dividends.................................................................................................
Other.....................................................................................................................
Total Income..........................................................................................................
EXPENSES
Rent/Mortgage (include taxes, principal, and insurance) .......................................
Life Insurance.........................................................................................................
Health/Disability Insurance......................................................................................
Vehicle Insurance....................................................................................................
Homeowner’s or Other Insurance............................................................................
Car Payments.........................................................................................................
Other Loan Payments.............................................................................................
Savings/Pension Contribution.................................................................................
Utilities (gas, water, electric, phone).......................................................................
Credit Card Payments.............................................................................................
Car Upkeep (gas, maintenance, etc.)......................................................................
Clothing...................................................................................................................
Personal Care Products (shampoo, cologne, etc.)..................................................
Groceries.................................................................................................................
Food Outside the Home (restaurant meals and carryout)........................................
Medical/Dental/Prescriptions....................................................................................
Household Goods (hardware, lawn, and garden).....................................................
Recreation/Entertainment.........................................................................................
Child Care................................................................................................................
Education (continuing education, classes, etc.).......................................................
Charitable Donations...............................................................................................
Miscellaneous..........................................................................................................
Total Expenses......................................................................................................
Remaining Income After Expenses...........................................................................
(Subtract Total Income from Total Expenses)...........................................................
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How Big of a Mortgage Can I Afford?
Not only does owning a home give you a haven for yourself and your family, it also makes great
financial sense because of the tax benefits — which you can’t take advantage of when paying rent.
The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your
savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage
you can afford.
Rent: _________________________
Multiplier: x 1.32
Mortgage payment: _________________________
Because of tax deductions, you can make a mortgage payment — including taxes and insurance —
that is approximately one-third larger than your current rent payment and end up with the same
amount of income.
For more help, use Fannie Mae’s online mortgage calculators.
*********************************************************************************************************************************
Loan Types to Consider
Brush up on these mortgage basics to help you determine the loan that will best suit your needs.
• Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the
longer the term, the lower the monthly payment. However, you pay more interest overall if you borrow
for a longer term.
• Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you
hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-
rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase.
ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to
how much the interest rate can be increased and how frequently they can be raised. These types of
mortgages are a good choice when fixed interest rates are high or when you expect your income to
grow significantly in the coming years.
• Balloon mortgages. These mortgages offer very low interest rates for a short period of time —
often three to seven years. Payments usually cover only the interest so the principal owed is not
reduced. However, this type of loan may be a good choice if you think you will sell your home in a few
years.
• Government-backed loans. These loans are sponsored by agencies such as the Federal
Housing Administration (www.fha.gov) or the Department of Veterans Affairs (www.va.gov) and offer
special terms, including lower down payments or reduced interest rates to qualified buyers.
Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly
payment. For help in determining how much your monthly payment will be for various loan amounts,
use Fannie Mae’s online mortgage calculators.
*********************************************************************************************************************************
Get Your Finances in Order: To-Do List
1. Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts
to create a budget that reflects your actual spending habits over the last several months. This
approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as
rent, utility bills, and groceries.
2. Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of
income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your
net household income. So you need to get monthly payments on the rest of your installment debt —
car loans, student loans, and revolving balances on credit cards — down to between 8 and 10
percent of your net monthly income.
3. Look for ways to save. You probably know how much you spend on rent and utilities, but little
expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot
some great ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at
home more often.
4. Increase your income. Now’s the time to ask for a raise! If that’s not an option, you may want to
consider taking on a second job to get your income at a level high enough to qualify for the home you
want.
5. Save for a down payment. Designate a certain amount of money each month to put away in your
savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you
can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20
percent down payment.
6. Keep your job. While you don’t need to be in the same job forever to qualify for a home loan,
having a job for less than two years may mean you have to pay a higher interest rate.
7. Establish a good credit history. Get a credit card and make payments by the due date. Do the same
for all your other bills, too. Pay off the entire balance promptly.
*********************************************************************************************************************************
Tax Benefits of Homeownership
The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase
the financial benefits of homeownership. Here’s how it works.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five
interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______
$12,577 = Total deduction
Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)
Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are
decreased when total income reaches a certain level.
*********************************************************************************************************************************
Closing Documents You Should Keep
On closing day, expect to sign a lot of documents and walk away with a big stack of papers. Here’s a
list of the most important documents you should file away for future reference.
• HUD-1 settlement statement. Itemizes all the costs — commissions, loan fees, points, and
hazard insurance —associated with the closing. You’ll need it for income tax purposes if you paid
points.
• Truth in Lending statement. Summarizes the terms of your mortgage loan, including the annual
percentage rate and recision period.
• Mortgage and note. Spell out the legal terms of your mortgage obligation and the agreed-upon
repayment terms.
• Deed. Transfers ownership to you.
• Affidavits. Binding statements by either party. For example, the sellers will often sign an affidavit
stating that they haven’t incurred any liens.
• Riders. Amendments to the sales contract that affect your rights. Example: The sellers won’t
move out until two weeks after closing but will pay rent to the buyers during that period.
• Insurance policies. Provide a record and proof of your coverage.
Sources: Credit Union National Association; Mortgage Bankers Association; Home-Buyer’s Guide
(Real Estate Center at Texas A&M, 2000).
Let me help you every step of the way. When purchasing a home, you are faced with a multitude of
decisions! The primary one is whether you are actually prepared to purchase a home. Locating the
perfect home is not always an easy task, and obtaining a mortgage loan can be a complex and tiring
process. Although, once you have determined that you are ready to move forward with the required
effort towards your home-purchasing goal, the rewards are unquestionable.
I will make the process of purchasing a home easier, more enjoyable, less time-consuming, and less
expensive than if you undertook this challenge on your own. I will help you prepare so that sellers
perceive you as a preferred buyer, help you locate and assess properties for sale that meet your
specifications, and help you through the myriad of details attending the actual purchase.
I am always familiar with the current homes on the market, and I know neighborhood values well, so I
can help you determine which properties are fairly-priced and in good condition before you start your
search. As a full time Realtor®, you can contact me at any time; Why? Because my goal is to make
your experience comfortable, guided, fast, efficient and successful.
Your First Step
Your first step to buying a home is to first ask yourself why you want to buy a home: to stop paying
rent? To start building equity? To have a place of your own? To raise a family? To entertain business
friends & family? To move up to a bigger house? Next, list what kind of home you'd like and where you
would like to be. Be specific. Separate the "must haves" from the "want to haves."
Think about home styles. How much space do you need? Does your situation require a one-level
home, or are stairs acceptable? Consider size and kind of property. Do you want a newer home, or
maybe an older one to fix up? Someday you or your heirs will want to sell. Consider how long you
expect to live in this particular home.
Your Next Step: Loan Pre-Qualification
Once you have addressed the above needs, your next step in the purchasing process is to get
pre-qualified with a mortgage company. This can be done over the phone or even online in a matter
of minutes.
Call me and I will refer you to a mortgage professional that has an excellent reputation and track
record for successfully acquiring loan approval for his/her clients.
I Will Find The Right Homes For You
Once you've been pre-qualified and know what price range you want to stay in, I can help you
determine which properties fit your needs by using the (MLS) Multiple Listing Service system to locate
them.
I have the best possible resources and communication systems available today to help you locate the
homes on the market that match your specifications. You can even search my listings here at my
website.
I Will Help You Every Step Of The Way
I will help you complete your financing and inspections, and close on the transaction. My top priority is
to make sure that your home buying experience is pleasant, cost-efficient, and successful.
*********************************************************************************************************************************
Real Living The Right Choice
7 Reasons to Own Your Home
1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your
mortgage, your property taxes, as well as some of the costs involved in buying your home.
2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are
normal, median existing-home sale prices have increased on average 6.5 percent each year from
1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL
ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15
percent over the next decade, creating continued high demand for housing.
3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you
build equity ownership interest in your home.
4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can
generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal
income tax.
5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing
costs may actually decline as you own the home longer. However, keep in mind that property taxes
and insurance costs will increase.
6. Freedom. The home is yours. You can decorate any way you want and benefit from your
investment for as long as you own the home.
7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in
community activities, lets you and your family establish lasting friendships, and offers your children the
benefit of educational continuity.
Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs.
Rent” calculator at www.GinnieMae.gov.
*********************************************************************************************************************************
Common First-Time Home Buyer Mistakes
1. They don’t ask enough questions of their lender and end up missing out on the best deal.
2. They don’t act quickly enough to make a decision and someone else buys the house.
3. They don’t find the right agent who’s willing to help them through the homebuying process.
4. They don’t do enough to make their offer look appealing to a seller.
5. They don’t think about resale before they buy. The average first-time buyer only stays in a home
for four years.
Source: Real Estate Checklists and Systems, www.realestatechecklists.com.
*********************************************************************************************************************************
Lender Checklist: What You Need for a Mortgage
□ W-2 forms — or business tax return forms if you're self-employed — for the last two or three
years for every
person signing the loan.
□ Copies of at least one pay stub for each person signing the loan.
□ Account numbers of all your credit cards and the amounts for any outstanding balances.
□ Copies of two to four months of bank or credit union statements for both checking and savings
accounts.
□ Lender, loan number, and amount owed on other installment loans, such as student loans and
car loans.
□ Addresses where you’ve lived for the last five to seven years, with names of landlords if
appropriate.
□ Copies of brokerage account statements for two to four months, as well as a list of any
other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
□ Copies of your most recent 401(k) or other retirement account statement.
□ Documentation to verify additional income, such as child support or a pension.
□ Copies of personal tax forms for the last two to three years.
*********************************************************************************************************************************
Factors That Decide Your Credit Score
Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining
a mortgage. The following factors affect your score:
1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how
late? Bankruptcy filing, liens, and collection activity also impact your history.
2. How much you owe. If you owe a great deal of money on numerous accounts, it can indicate that
you are overextended. However, it’s a good thing if you have a good proportion of balances to total
credit limits.
3. The length of your credit history. In general, the longer you have had accounts opened, the better.
The average consumer's oldest obligation is 14 years old, indicating that he or she has been
managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have
credit histories shorter than 2 years.
4. How much new credit you have. New credit, either installment payments or new credit cards, are
considered more risky, even if you pay them promptly.
5. The types of credit you use. Generally, it’s desirable to have more than one type of credit —
installment loans, credit cards, and a mortgage, for example.
For more on evaluating and understanding your credit score, visit www.myfico.com.
*********************************************************************************************************************************
6 Creative Ways to Afford a Home
1. Investigate local, state, and national down payment assistance programs. These programs give
qualified applicants loans or grants to cover all or part of your required down payment. National
programs include the Nehemiah program, www.getdownpayment.com, and the American Dream Down
Payment Fund from the Department of Housing and Urban Development, www.hud.gov.
2. Explore seller financing. In some cases, sellers may be willing to finance all or part of the purchase
price of the home and let you repay them gradually, just as you would do with a mortgage.
3. Consider a shared-appreciation or shared-equity arrangement. Under this arrangement, your
family, friends, or even a third-party may buy a portion of the home and share in any appreciation
when the home is sold. The owner/occupant usually pays the mortgage, property taxes, and
maintenance costs, but all the investors' names are usually on the mortgage. Companies are
available that can help you find such an investor, if your family can’t participate.
4. Ask your family for help. Perhaps a family member will loan you money for the down payment or act
as a co-signer for the mortgage. Lenders often like to have a co-signer if you have little credit history.
5. Lease with the option to buy. Renting the home for a year or more will give you the chance to save
more toward your down payment. And in many cases, owners will apply some of the rental amount
toward the purchase price. You usually have to pay a small, nonrefundable option fee to the owner.
6. Consider a short-term second mortgage. If you can qualify for a short-term second mortgage, this
would give you money to make a larger down payment. This may be possible if you’re in good
financial standing, with a strong income and little other debt.
*********************************************************************************************************************************
Tips to Guide for Your Home Search
1. Research before you look. Decide what features you most want to have in a home, what
neighborhoods you prefer, and how much you’d be willing to spend each month for housing.
2. Be realistic. It’s OK to be picky, but don’t be unrealistic with your expectations. There’s no such
thing as a perfect home. Use your list of priorities as a guide to evaluate each property.
3. Get your finances in order. Review your credit report and be sure you have enough money to cover
your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage. This
will save you the heartache later of falling in love with a house you can’t afford.
4. Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if
you feel you need a second opinion, but be ready to make the final decision on your own.
5. Decide your moving timeline. When is your lease up? Are you allowed to sublet? How tight is the
rental market in your area? All of these factors will help you determine when you should move.
6. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you
hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy
as well as the type of mortgage terms that will best suit you.
7. Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.
8. Get help from a REALTOR®. Hire a real estate professional who specializes in buyer
representation. Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is
working only for you. Buyer’s reps are usually paid out of the seller’s commission payment.
*********************************************************************************************************************************
Questions to Ask Your Lender
1. What are the most popular mortgages you offer? Why are they so popular?
2. Which type of mortgage plan do you think would be best for me? Why?
3. Are your rates, terms, fees, and closing costs negotiable?
4. Will I have to buy private mortgage insurance? If so, how much will it cost, and how long will it be
required? (NOTE: Private mortgage insurance is usually required if your down payment is less than 20
percent. However, most lenders will let you discontinue PMI when you’ve acquired a certain amount of
equity by paying down the loan.)
5. Who will service the loan — your bank or another company?
6. What escrow requirements do you have?
7. How long will this loan be in a lock-in period (in other words, the time that the quoted interest rate
will be honored)? Will I be able to obtain a lower rate if it drops during this period?
8. How long will the loan approval process take?
9. How long will it take to close the loan?
10. Are there any charges or penalties for prepaying the loan?
Used with permission from Real Estate Checklists & Systems, www.realestatechecklists.com
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Budget Basics Worksheet
The first step in getting yourself in financial shape to buy a home is to know exactly how much money
comes in and how much goes out. Use this worksheet to list your income and expenses below.
INCOME ...............................................................................................................
Take Home Pay (all family members) ...................................................................
Child Support/Alimony...........................................................................................
Pension/Social Security.........................................................................................
Disability/Other Insurance.....................................................................................
Interest/Dividends.................................................................................................
Other.....................................................................................................................
Total Income..........................................................................................................
EXPENSES
Rent/Mortgage (include taxes, principal, and insurance) .......................................
Life Insurance.........................................................................................................
Health/Disability Insurance......................................................................................
Vehicle Insurance....................................................................................................
Homeowner’s or Other Insurance............................................................................
Car Payments.........................................................................................................
Other Loan Payments.............................................................................................
Savings/Pension Contribution.................................................................................
Utilities (gas, water, electric, phone).......................................................................
Credit Card Payments.............................................................................................
Car Upkeep (gas, maintenance, etc.)......................................................................
Clothing...................................................................................................................
Personal Care Products (shampoo, cologne, etc.)..................................................
Groceries.................................................................................................................
Food Outside the Home (restaurant meals and carryout)........................................
Medical/Dental/Prescriptions....................................................................................
Household Goods (hardware, lawn, and garden).....................................................
Recreation/Entertainment.........................................................................................
Child Care................................................................................................................
Education (continuing education, classes, etc.).......................................................
Charitable Donations...............................................................................................
Miscellaneous..........................................................................................................
Total Expenses......................................................................................................
Remaining Income After Expenses...........................................................................
(Subtract Total Income from Total Expenses)...........................................................
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How Big of a Mortgage Can I Afford?
Not only does owning a home give you a haven for yourself and your family, it also makes great
financial sense because of the tax benefits — which you can’t take advantage of when paying rent.
The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your
savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage
you can afford.
Rent: _________________________
Multiplier: x 1.32
Mortgage payment: _________________________
Because of tax deductions, you can make a mortgage payment — including taxes and insurance —
that is approximately one-third larger than your current rent payment and end up with the same
amount of income.
For more help, use Fannie Mae’s online mortgage calculators.
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Loan Types to Consider
Brush up on these mortgage basics to help you determine the loan that will best suit your needs.
• Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the
longer the term, the lower the monthly payment. However, you pay more interest overall if you borrow
for a longer term.
• Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you
hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-
rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase.
ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to
how much the interest rate can be increased and how frequently they can be raised. These types of
mortgages are a good choice when fixed interest rates are high or when you expect your income to
grow significantly in the coming years.
• Balloon mortgages. These mortgages offer very low interest rates for a short period of time —
often three to seven years. Payments usually cover only the interest so the principal owed is not
reduced. However, this type of loan may be a good choice if you think you will sell your home in a few
years.
• Government-backed loans. These loans are sponsored by agencies such as the Federal
Housing Administration (www.fha.gov) or the Department of Veterans Affairs (www.va.gov) and offer
special terms, including lower down payments or reduced interest rates to qualified buyers.
Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly
payment. For help in determining how much your monthly payment will be for various loan amounts,
use Fannie Mae’s online mortgage calculators.
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Get Your Finances in Order: To-Do List
1. Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts
to create a budget that reflects your actual spending habits over the last several months. This
approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as
rent, utility bills, and groceries.
2. Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of
income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your
net household income. So you need to get monthly payments on the rest of your installment debt —
car loans, student loans, and revolving balances on credit cards — down to between 8 and 10
percent of your net monthly income.
3. Look for ways to save. You probably know how much you spend on rent and utilities, but little
expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot
some great ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at
home more often.
4. Increase your income. Now’s the time to ask for a raise! If that’s not an option, you may want to
consider taking on a second job to get your income at a level high enough to qualify for the home you
want.
5. Save for a down payment. Designate a certain amount of money each month to put away in your
savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you
can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20
percent down payment.
6. Keep your job. While you don’t need to be in the same job forever to qualify for a home loan,
having a job for less than two years may mean you have to pay a higher interest rate.
7. Establish a good credit history. Get a credit card and make payments by the due date. Do the same
for all your other bills, too. Pay off the entire balance promptly.
*********************************************************************************************************************************
Tax Benefits of Homeownership
The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase
the financial benefits of homeownership. Here’s how it works.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five
interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______
$12,577 = Total deduction
Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)
Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are
decreased when total income reaches a certain level.
*********************************************************************************************************************************
Closing Documents You Should Keep
On closing day, expect to sign a lot of documents and walk away with a big stack of papers. Here’s a
list of the most important documents you should file away for future reference.
• HUD-1 settlement statement. Itemizes all the costs — commissions, loan fees, points, and
hazard insurance —associated with the closing. You’ll need it for income tax purposes if you paid
points.
• Truth in Lending statement. Summarizes the terms of your mortgage loan, including the annual
percentage rate and recision period.
• Mortgage and note. Spell out the legal terms of your mortgage obligation and the agreed-upon
repayment terms.
• Deed. Transfers ownership to you.
• Affidavits. Binding statements by either party. For example, the sellers will often sign an affidavit
stating that they haven’t incurred any liens.
• Riders. Amendments to the sales contract that affect your rights. Example: The sellers won’t
move out until two weeks after closing but will pay rent to the buyers during that period.
• Insurance policies. Provide a record and proof of your coverage.
Sources: Credit Union National Association; Mortgage Bankers Association; Home-Buyer’s Guide
(Real Estate Center at Texas A&M, 2000).
| The information provided herein is supplied by several sources and is subject to change without notice. Niza Rodriguez does not guarantee or is any way responsible for its accuracy, and provides said information without warranties of any kind, either express or implied. 2009 Niza Rodriguez All Rights Reserved. |
| 2360 sqft $158,900 |
| 3480 Sqft $324,900 |
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| MLS: 3010656 |
| 3480 Sqft $324,900 |
| MLS: 3041154 |
| 3 Bedrooms$34,800 |
| MLS: 3056202 |
| 3 Bedrooms $155,900 |
| MLS: 3074447 |
| 3 Bedrooms $187,900 |
| MLS: 3033137 |
|
welcome to:
Hablo Español
NIZA RODRIGUEZ - Realtor®
REAL LIVING THE RIGHT CHOICE
711 Walnut St Coshocton, OH
Direct: 740-502-7560
Email: getitsold27@yahoo.com
web: www.nizarodriguez-sells4u.com
REAL LIVING THE RIGHT CHOICE
711 Walnut St Coshocton, OH
Direct: 740-502-7560
Email: getitsold27@yahoo.com
web: www.nizarodriguez-sells4u.com
| $42,800 |
| MLS: 30086391 |
| MLS: 30709061 |
| $45,000 |
