FAQs:
How can I check my credit rating before I apply for a mortgage?
First, let us do it. Michelle in my office will do it, no
obligation.
Your credit rating is based on a combined score generated from three credit bureaus who
look at your credit history, amount of credit available and recent inquiries to determine what called your FICO score. A smart
way to go is to have our Michelle check your rating for you, and if appropriate, suggest ways for you to improve your
credit. For a small fee, you can get your score or review your credit report by going online to www.myfico.com or contacting
the credit bureaus directly at:
EQUIFAX www.equifax.com
EXPERIAN www.experian.com
TRANSUNION www.transunion.com
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Why should I consider paying points?
Buyers often choose to pay a
one-time charge called mortgage “points” in exchange for a lower interest rate. Usually paid at closing, each
“point” cost 1% of the mortgage amount, or $2000 on a $200000 loan. The lower rate reduces the monthly mortgage
payment, and point paid in conjunction with the purchase of a home are generally tax-deductible in the year they are paid
(see you tax advisor). Monthly savings will often exceed what was paid in points in a few years time.
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What’s involved in making an offer?
Once you have looked at a number
of homes and found the house that meets your needs and dreams, you’ll probably find yourself getting emotionally involved.
You may imagine moving your furniture in, planting flowers and hosting your first big holiday party. But try not to get too
attached prematurely. There are a number of steps you must take before you’re holding the keys in your hand, and you
need to think clearly and objectively at this point so that the offer you make is a realistic one.
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What should I offer?
There are a number of factors that will affect the offer you make,
supply and demand, the condition of the home, how long the house has been on the market and your personal circumstances with
regard to how soon you need to close on a home all come into play when framing your offer. All offers are good offers if you
want to buy it.
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You might also weigh in the demand for the home and how much you really want it. If you “low ball”
an offer, some sellers will react with a counteroffer; others might dismiss your offer outright. In an active market, you
are likely to loose out by making a low bid. If multiple bids are anticipated, its advisable to go with your best offer. I
can advise you on ways to make your offer more attractive: for instance, a mortgage credit approval and flexibility on the
closing date can help make your offer stand out and ultimately close the sale.
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Written offer with deposit, $1000.
I’ll present your written offer to the seller. To show that
your intentions are serious, it’s customary to submit the offer with a deposit. If your offer is accepted, the deposit
is placed in a trust account. If not, your deposit will be returned to you.
If the seller counter offers, you may want to agree to that
price and terms, or you can make your own counter offer. Once we agree, both sides initial the final price and terms shown
on the agreement of sale.
The final contract will specify the items in the home included or excluded in the sale, as
well as any additional provisions that either side wants to have as part of the contract. Dates for contingencies, such as
obtaining financing, are also stated before the contract is signed.
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Additional deposit.
Depending upon the price of the home and the size of your down
payment, the contract may specify a date when additional monies would be placed into the trust account. At this time, the
mortgage company or your attorney will order a title search and insurance.
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Mortgage Contingency.
Unless you are an all-cash buyer, as part of your sales contract,
you generally will agree to obtain financing within a specified period. This period may be extended with the seller’s
agreement. If you are unable to secure financing, the contract becomes null and void.
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Home Inspection.
It is standard procedure for the buyer to pay for a comprehensive
home inspection. Accompanying the inspector is recommended for learning all about the house, including such basics as the
location of the main water shut off and the electrical distribution boxes.
Mortgage lenders typically require inspections
for wood destroying insects, while some states and municipalities mandate specific inspections typically paid for by the seller.
Some insurers require the inspection of underground oil tanks. The responsibility for any repairs based on inspections is
subject to negotiations between you and the seller.
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What is the purpose of an attorney review?
In New Jersey where
the real estate agent writes the contract, there may be an attorney review period. This specified period allows your attorney
to cancel the contract or request it to be altered. Either party may void the contract without penalty during this period.
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What is title insurance and why do I need it?
Basically, title insurance helps
assure that you have clear title to the home you’re purchasing and provides insurance protection in the event anyone
makes a claim to your property. A title search is the primary component of “due diligence”, a process that will
be started either by your attorney, or by the title company you choose. The title search determines whether the seller actually
owns the property and if there are any claims against it.
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What happens if the house I want to purchase does not appraise at the amount expected?
If the house doesn’t appraise
at the amount expected, other alternatives are typically found. A second appraisal may be sought, the buyer may be willing
to put more money down, the seller may adjust the price or offer other concessions or the two sides may negotiate to split
the difference between them.
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What can I expect at the final walk-through and closing?
The final walk through is typically
scheduled within 24 hrs of the closing. It gives you one last opportunity to make sure that the home you are purchasing is
in the condition that you and the seller are mutually agreed to in the sales contract.
Should a problem arise during
the walk through, I can contact the seller’s representative letting them know what the issues are. If the seller accepts
responsibility, money for the repairs can be allocated to you at the closing. If the seller does not agree to the repairs,
I can act as a go between to help you and the seller reach a compromise so that the closing is not delayed.
At the
closing, the mortgage and many other documents are signed, adjustments are made for such items as property taxes, the seller
is paid, and you are bestowed with the title or deed and the keys to your new home. Be prepared to sign your name over and
over again always guided by your attorney.
