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Buyer Resources
Benefits of home ownership
Credit:
Owning a home helps you establish financial credibility.
Independence:
Owning your own home provides you with independence and more
privacy than renting. You are free to paint walls, plant flowers,
keep pets and anything else within legal bounds.
Investment:
As you make more payments and own more of your home, you add to
its investment value. Most improvements you make will also add to
its value.
Pride:
A home reflects its owner's values and lifestyle. Owning a home
can provide you with a source of pride, enjoyment and
satisfaction.
Security:
A home can provide security against inflation because the value of
your home increases as prices go up.
Stability:
Being established in a community provides a sense of belonging,
stability and security.
Tax Advantages:
Interest on your mortgage loan is deductible on your yearly
personal income tax return. Many of the closing costs associated
with purchasing your home are deductible, as are your property
taxes.
Home Inspections
What is an inspection?
There are numerous types of inspections. An inspection is meant to
evaluate, at minimum, the structural and mechanical condition of a
property. It is not the same as an appraisal which evaluates the
market value of a property. Persons involved in real estate
transactions need unbiased information about the physical
condition of property they plan to buy or sell and your contract
should include a contingency that you obtain a satisfactory
inspection report. Talk with your agent about the types of
inspections available.
Home Inspectors vs. Engineers
Home Inspector: A person who examines any component of a building,
through visual means and through normal user controls, without the
use of mathematical sciences.
Engineering: Analysis or design work requiring extensive
preparation and experience in the use of mathematics, physics,
chemistry and the engineering sciences.
Finding a qualified Inspector
* Referrals from satisfied customers
* Referral from a local real estate agent or mortgage company
* Local consumer affairs office
* Yellow Pages under "Building Inspection Services"
Ask if she/he is a member of the American Society of Home
Inspectors (ASHI). The ASHI has established standards of practice
which include the specific services, limitations and exclusions
that can be expected from private home inspectors.
What the inspection, at minimum, includes
Every inspection should include, but not be limited to, an
evaluation of at least the following:
* Foundations
* Plumbing and electrical systems
* Doors
* Ceiling, walls and floors
* Roof
* Hazardous materials concerns
* Heating and air conditioning systems
* Common areas (in condominiums)
* Insulation
* Ventilation
F.A.Q.
What is the difference between "pre-qualified" and
"pre-approved"?
If you are "pre-qualified" you have determined, with a loan
officer, what price you can afford based on the down payment, your
debts and the amount the mortgage company will approve for your
mortgage. Being "pre-qualified" is only a determination of your
probable credit. If you are "pre-approved", your credit,
employment and funds have been approved by the lender.
What are closing costs?
Closing costs are an accumulation of charges paid to different
entities associated with the buying and selling of real estate.
For buyers, they are usually about 4-6% of the total sales price
of a property. Some of the closing costs you might encounter are:
application fees, appraisal fee, county taxes, credit report,
discount points, documentation fee, escrow fees, homeowners'
association fees, loan fees, mortgage insurance, origination fees,
tax registration and title insurance premium.
What is a point?
One point is equal to 1% of the new loan amount. Whenever
government regulation, state usury laws and/or competitive
practices prohibit the lender from charging a rate of interest
that would make the real estate loan competitive with other fields
of investments, the lender must seek some method of increasing the
yield for the investors. By charging "points", the lender can
bring the real estate loan up to those other investments.
What is earnest money?
When you make an offer, you will need to put up an earnest money
deposit as a sign of good faith that you are seriously interested
in buying a home. That deposit becomes a part of the purchase
price and is held in a trust account until there is full
acceptance of the offer. Typically, an earnest money is 3-5% of
the offer amount.
What is title insurance?
Title insurance protects the named insured against loss because of
defects, liens, encumbrances, adverse claims or other matters not
shown or disclosed to the new owner that attach before date of
policy.
Is VA or FHA financing unfair to sellers?
FHA and VA loans provide purchasers the opportunity to buy homes
with minimal cash investment and at lower interest rates. The
result is a larger market for sellers, who also benefit by
receiving all cash for their equity.
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