Buying A Home

Buying A Home

The Process

Below is an outline of the steps you’ll be taking as part of becoming a homeowner.

·         How much can you afford?

·         Getting pre-approved for a loan

·         Deciding on a mortgage

·         Fine tuning your budget

·         Begin searching for a home

·         Making an offer

·         Your offer is accepted

·         The closing

Getting Started

You’ve decided to purchase a home! Buying a home is an exciting and smart investment. Homeownership brings a sense of security and freedom of having your own space. Financially, it can provide an opportunity to build equity.

This guide is designed to walk you through the process of buying a home so you are prepared to act quickly when you find the perfect one. As you work through the home buying process, you’ll find that Brett knowles is a valuable resource, and you can feel confident your search for a new home will be successful.

Brett will help you find a home that fits your lifestyle and your budget.

How much Can You Afford?

Before you begin searching for a new home, you need to determine a realistic budget that takes into consideration your current debt (credit cards, loans, etc.) as well as homeowner expenses such as taxes, insurance, utilities and maintenance.

Getting Pre-approved

A lender will lend you money if they are sure your credit is strong and if they are confident you can pay them back.

To determine if you’re a good candidate for a loan, they will look at your credit score and study your financial history, income, federal tax returns and long term debt such as credit cards, auto loans, child support, etc. If your credit looks good, you have an excellent chance of obtaining a mortgage. Brett will provide you a list of the areas top leading professionals.

Establishing Good Credit

At one time or another, many people blemish their credit report. If your credit report is tarnished, these are steps you can take to repair the damage.

First, examine the credit report thoroughly and make sure it is accurate. If there are mistakes an the report, contact the credit reporting agency and ask them to remove the mistakes immediately.

Here are some helpful tips:

·         Pay your bills on time and in full

·         Limit how many credit cards you have

·         Keep separate checking and savings accounts

·         Stay at your current job for a few year- the longer the better

Decide on a Mortgage

After you are pre-approved for a mortgage, it’s time to decide on a mortgage type. There are many types of mortgages, and choosing the right one for you is an important decision. The two most common mortgages are Fixed Rate Mortgage and an Adjustable Rate Mortgage (ARM).

                Fixed Rate Mortgage- The interest rate remains the same for the entire term of the loan- usually 15 to 30 years- meaning the principal and interest portions of your loan will never change. With a Fixed Rate mortgage, your payments are stable and predictable; however, interest rates tend to be higher than an adjustable rate.

                Adjustable Rate Mortgage- The interest rate is linked to a financial index so the rate fluctuates with the changes in market conditions. With Adjustable Rate Mortgages, your payments will vary over the life of the loan, but is usually includes a lifetime cap on the interest rate increase in order to protect the borrower. The advantage of an Adjustable Rate mortgage is that it offers lower initial payments, making it easier for buyers to qualify.

When you apply for a mortgage, have the following items available for each borrower:

·         Two most recent pay stubs

·         Summary of current debt (credit cards, loans, child support, etc.)

·         W-2’s for the last two years

·         Federal tax returns for the last two years

·         Last month bank statements

Fine Tune Your Budget

Now it’s time to calculate your budget in more detail. To help you, here are three major costs associated with purchasing a property.

1.      DOWN PAYMENT: This is how much you pay upfront. The larger the down payment, the smaller the mortgage. The standard down payment is 20% of the cost of the home, but other programs are available, especially for first time buyers. Brett can help you determine which program is best for you.

2.      MONTHLY MORTGAGE COSTS: Include the mortgage, homeowner’s insurance, mortgage insurance (if applicable), property taxes and escrow deposits, which can be combined with the monthly mortgage payment.

3.      CLOSING COSTS: Include appraisals, title insurance, inspections, attorneys, title transfers and additional fees.

What types of mortgage programs are offered?

There are many types of mortgages, and choosing the right one for you is an important decision. Below lists several programs but talk to a local mortgage professional to see which program is right for you.

15, 20- or 30-year Fixed Rate loans

Adjustable-Rate Mortgage (ARM)

New Construction financing

VA and FHA loans

How long does a mortgage application process take to proceed?

It typically takes 30 days to process an application. The time depends on how quickly the lender can get an appraisal of the property, review your financial statements, employment and credit information.

What could delay my loan approval?

Delays could result if the lender discovers credit problems or if your employment and/or financial status changes between the time you submitted an application and the final loan approval. There may also be a delay if the home you selected appraises for less than the agreed purchase price.

What’s included in my house payment?

Principal and interest on your loan. Depending on the terms of your loan, the payment may include homeowner’s insurance, mortgage insurance and property taxes.

Can I pay those things separately?

With most loans you can pay taxes and insurance separately if you borrow no more than 80% of the purchase price or appraised value of your home. Check with your lender to be sure.

What do the closing costs include?

Closing costs cover processing and administration of your loan. You may also have to prepay interest charges to cover partial month in which you close and deposit money into an escrow account for property taxes, homeowners and mortgage insurance.

The Fun Begins

Your financial papers are in order, you’ve been pre-approved for a mortgage, and you’ve calculated your budget, now it’s time to start looking for a new home!

One of the many advantages of working with The Bret Knowles Team is having access to multiple listings. Brett can provide a detailed description of any property that interests you.

The more Brett knows about what you are looking for, the easier it will be to find the perfect match. Use the worksheet to prioritize your home features and share this information with Brett.

Make an Offer

You’ve found the perfect home! Now it’s time to make an offer. Brett will help you decide on an offer based on you’re pre-approved loan, current market conditions and the competition.

After you’ve determined an offer amount, Brett will present it to the seller on your behalf. Negotiations may follow between you and the seller as you work toward an agreement. This is normal, and Brett can support you through the process objectively and professionally.

Your Offer is Accepted

Now it’s time to finalize your loan and have home inspections done.

Based on the inspection results, repairs may need to be completed. The property is appraised, the title analyzed, the title insurance commitment is issued, and the property is surveyed if necessary. At this point you need to secure homeowner’s insurance.

The Closing

This is the day you’ve been waiting for! If closing is a new experience, try not to worry, The Brett Knowles Team will guide you through it.

Brein identification, documents requested by the closing attorney, your lender and the closing money owed. All fees will be disclosed as separate line items within the closing statement. Check with your closing attorney to determine how they wat fees to be paid (i.e. wire transfer, cashier’s check).

During the closing, the sales transaction is finalized. The disclosure statement is released, money is exchanged, all paperwork and agreements are signed, and the title of property is transferred- the home is now yours! Congratulations!