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Advice for First Time Buyers

Buying a home for the first time can be a very exhausting and frustrating experience. As a first time home buyer you should compile a list of information and tasks that may ease these frustrations. This list should include information on your income, credit reports, a list of mortgage options, and more. Below are simple steps that will help you get to know more about real estate and what it takes to buy a home.

Step One: How much can your wallet handle? 
The first thing potential buyers should do is figure out how much you can afford. Buyers should really take a good look at your financial situation and determine if this is the right time for you to buy. The best time to buy is now, due to it being a buyer’s market. This means there are more sellers than buyers for real estate, especially with prices and mortgage rates being at an all time low. If you can afford to spend, you should calculate your monthly income and debt, and check your credit report and FICO score. Also, figure out your down payment. 20% is an ideal amount for a down payment.

Step Two: Documentation is key. 
Gathering income documentation is the next big step for buying a home. You should file all of your tax records, W-2 forms, and most current pay slip together. Finally, choose a reputable mortgage broker.

Step Three: Choose a mortgage that fits. 
After the loan pre-qualification process, the lenders and the mortgage brokers will give options that fits your financial scenario. Choose a mortgage that fits for you. Do you need a mortgage that’s fixed? Or do you need a conventional mortgage? 15 years or 30 years? The choice is entirely up to you. You can also speak with a lender and mortgage broker. Getting multiple opinions will also help narrow down your choice. Once you have gotten a grasp of terms fit for you, you can now zero-in on the purchase price based on the payment that you’re comfortable with and what works with the qualifying lender.

Step Four: You’re almost home, pun intended. 
Try to find a good reputable real estate agent, especially one that specializes in first time home buyers. Ask a friend or a neighbor for references. More than likely, they will have a business card or refrigerator magnet of their real estate agent. Figure out where exactly you would like to live. The best thing you can do is research your target neighborhoods. Would you like an open community or would you prefer a gated one? Would you like to live close to the downtown area or more toward the suburbs? These are question you need to answer that will help guide your realtor to your ideal home. You should also search online about crime rates, home to work distances, schools, hospitals, etc.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][mk_divider][/vc_column][/vc_row][vc_row][vc_column][vc_column_text css=”.vc_custom_1547565149295{margin-bottom: 0px !important;}”]

Top 10 things to do to prepare for homeownership.

  1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
  2. Develop your home wish list. Then, prioritize the features on your list.
  3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
  4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
  5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
  6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
  7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
  8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
  9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

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Selling A Home – Get Ready Tips

  1. First impressions are important! Trim your lawn, sweep sidewalks, and keep front door clean.
  2. Make it light and bright! Open curtains and clean the windows so prospective buyers can see how bright and cheerful your house is.
  3. De-clutter! Make sure stairways and corridors are clear. Clean out linen closets, clothes closets, and pantries. Pack away or donate things to make it feel more spacious and seem like you have room to grow.
  4. Bathrooms sell homes! Make bathrooms sparkle. Clean sinks and toilets. Repair any damaged or discolored caulking. Clean away rust stained sinks.
  5. Don’t be a drip! Fix leaky faucets. Dripping water suggest faulty plumbing and major repair bills.
  6. Freshen Paint! Paint is an inexpensive way to liven and brighten a room. Sometimes a room needs a fresh start.
  7. The nose knows! Try a deoderizing spray, like FeBreeze, to ward away pet, kid, or cooking odors from your home.
  8. We love pets! Having pets around the house is wonderful, except when showing your home. Take your pets for a drive or a nice long walk and enjoy the time away.

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Real Estate Lingo and Acronyms

Realtors often use jargon or acronyms that are unfamiliar to first-time buyers. Below are some common terms to get you up to speed.

4B/2B: Refers to the number of bedrooms and bathrooms. The first (4B) being the number of bedrooms and the last (2B) being the number of bathrooms. This term can be modified to the number of bed/baths in any home. For example, if there is a home with 5 bedrooms and 4 bathrooms, you would call it a 5B/4B

Appraisal: A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby.

Assumable Mortgage: A mortgage that can be assumed by the buyer when a home is sold. Usually, the borrower must “qualify” in order to assume the loan.

Balloon Mortgage: A mortgage loan that requires the remaining principal balance be paid at a specific point in time. For example, a loan may be amortized as if it would be paid over a thirty year period, but requires that at the end of the tenth year the entire remaining balance must be paid.

Closing Costs: This is the entire package of miscellaneous expenses paid by the buyer and the seller when the real estate deal closes. These costs include the brokerage commission, mortgage-related fees, escrow or attorney’s settlement charges, transfer taxes, recording fees, title insurance and so on. Closing costs are generally paid through escrow.

CMA (Competitive market analysis): A CMA is a report that shows prices of homes that are comparable to a subject home and that were recently sold, are currently on the market or were on the market, but not sold within the listing period.

Contingency: A provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met.

Foreclosure: The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

Gar: Refers to a garage

HDW, HWF, Hdwd: Refers to hardwood floors

Listing: A provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met.

Lock Box: A locked key-holding device affixed to a for-sale home so real estate professionals can gain entry into the home after obtaining permission from the listing agent

Short Sale: A process that is often used by homeowners who are trying to avoid getting caught up in a foreclosure. Short sales are an option homeowners use when the bank, credit union or other types of lenders they have borrowed from provides them with the option of selling their home to a third party at a price that is much lower than what they actually still owe on the note of their home loan.[/vc_column_text][/vc_column][/vc_row]