Top 10 Things First-Time Home Buyers Need to Know

Buying your first home– is not something you (or anyone) should take lightly. You should be prepared with as much information about the process as you can learn before you begin. You should understand your real estate market and the current mortgage market. The more you know – the better.

10 Tips Every First-Time Home Buyer Should Consider
The following are the 10 key questions you, as a first-time home buyer, should ask yourself:

How Much Home Can You Afford? As a first-time home buyer, it’s important to have an accurate idea of how much money you can borrow for your new home and most importantly, how much you can afford. Sometimes those two aren’t exactly the same (depending on your financial situation), so always use what you can afford as your main metric for deciding how much house you should mortgage. One of the realities of first-time home buying is the frustration of finding that perfect home only to discover that it is not in your price range. Finding out how much home you can afford is actually not that difficult. Your mortgage banker will help you, of course, but first you can try using our purchase calculator.

Should You Get Pre-Qualified or Pre-Approved? Often a mortgage lender will tell a potential buyer they are “pre-qualified” for a loan. This can confuse first-time home buyers, who think they will qualify for that amount. Not likely. With a pre-qualification, little information about your finances is verified (often none). You might find out later that the amount you were “pre-qualified” for is far different than what you actually will qualify for (or even afford). What you need is a “pre-approval” in which more information (your credit and other factors) is checked and you can have a better idea how much you can afford for your first home. With a pre-approval, you’re in a better position to negotiate because the seller knows that your offer is more solid. You’ll avoid wasting time looking at homes outside your price range.

What Is Your Credit Score? First-time home buyers should obtain a copy of their credit report and review it. Your mortgage company will pull your credit, but it helps if you know before you start the process. There are places, like Quizzle.com, where you can actually get a free credit report. If you find an error, it’s much easier to fix it before a house has been found, rather than dealing with it when trying to close on the loan. Your mortgage banker can even give you tips to help with any minor blemishes. Check out our Zing guide on Credit 101 for information on your credit score and on credit reporting.

What Kind of Mortgages Should You Consider? For first-time home buyers, mortgages can be confusing and a bit overwhelming. Ask your mortgage banker every question you can think of. There are no dumb mortgage questions, especially for first-time home buyers. A good mortgage banker will ask you numerous questions about your specific financial needs so that they can match you with the best mortgage.
The mortgage best for you will depend on:
Your current financial situation
Whether or not your financial situation will change in the next few years
How long you want to stay in your home
If your income is steady or fluctuating

What Documentation Do You Need? Almost always, you’ll need these items to complete your mortgage application:
W-2s
Pay stubs
Bank and/or other asset statements

What Is a Reasonable Offer? Unless you are very familiar with your area and completely understand how to price an offer on your first home, you might want to consider getting help from an expert. A real estate agent can be very helpful in deciding how much your offer should be. In today’s buyers market, your best reasonable offer might actually be lower than you would think. Have your real estate agent run comparable sales in your area and pay attention to prices per square foot for recent sales. This can give you a very good idea of how much to offer.

What Is a Purchase Agreement? The purchase agreement sets the amount of your offer and usually includes extra details, such as which appliances stay, who pays closing costs (seller can pay closing costs on some home loans) and when you’d like to take possession of the house. The seller (or selling agent) will have you sign the purchase agreement and offer “earnest money.” Earnest money is a deposit showing that you’re serious about your offer to buy the home; it’s usually three percent of the asking price or less and later applied as part of your down payment or other closing costs. It is a check that your agent holds on to until the offer has been accepted. Title companies can also prepare a purchase agreement. If you choose not to work with a realtor, seek the advice of an attorney to help you prepare your documents.

Should You Have the Home Inspected? Yes, you should. You should never buy a home without inspecting it, and most purchase agreements are contingent upon inspection. Spend a few hundred dollars and hire a qualified/licensed professional to inspect your new home (before you buy it) —it’s the only real way to ensure the home is in good condition. The home inspector should provide a very detailed summary report listing the condition of each item, and recommending repairs. You should always be there when the home inspection takes place. It usually takes a few hours and you’ll learn not only about the condition of the house but how everything works. Ask questions as you go along. If there are problems, the seller may adjust the purchase price of the home or simply repair the problems. There’s always the possibility that the home is in such bad shape or has some monumentally costly problem that it’s no longer the home you want. If that’s the case, get your deposit back and resume your house hunting. These are the cases when you’ll be most happy you got an inspection.
A thorough inspection includes:
Heating and cooling systems
Plumbing and electrical systems
Structural integrity of walls, floors, ceilings, foundation, roof
Condition of gutters, spouts, insulation and ventilation, major appliances, garage, etc.

Do You Need Homeowner’s Insurance? Yes, you’ll need a valid homeowner’s insurance policy before you close on your home. You can’t get a mortgage without it.

What Are Closing Costs? This is probably the top asked question by first-time home buyers. All mortgage lenders are required by law to disclose in writing your estimated closing costs and fees, so you’ll know ahead of time. If you don’t get this from your mortgage lender, you know something is wrong. Back out before you waste any money. This estimate is commonly called a “good faith estimate.” Keep in mind, various additional costs might apply depending on your state, mortgage type, and down payment amount. For instance, title companies handle most closings, but there are some states that require an attorney to conduct the closing. In those states, borrowers are not required to pay a title company closing fee.
Before your closing, you’ll receive a document that outlines the actual costs you’ll pay at closing. You’ll be asked to bring a valid picture ID, a certified check (if applicable) for any down payment due (or you may have to wire the money to the title company) and any other additional documents that your circumstances may require.

Be sure to ask for and to take a final walk through of the property shortly before the closing to make sure the home is in the condition you expect it to be.
Any number of people may attend the closing—you, your lender, the seller, the seller’s mortgage holder, respective attorneys, the real estate agent, the transfer agent (if it’s a co-op), the managing agent (if it’s a condo) and the title company representative. Once everyone signs the appropriate documents and the checks are exchanged, you’ll be given the keys to your home and that’s it!

So there you are! As a first-time home buyer, you’re on your way to being better prepared for getting a mortgage and buying your first home. Don’t take chances. Do your research and ask lots of questions – a great resource is the Zing Home Buying 101 Guide! I hope this is helpful to all you first time homebuyer’s out there because buying your first home is a big step and can be stressful, so having as much information as possible ahead of time is the best way to start your journey in this process.

Mortgage Rates Take Slight Dip This Week

Mortgage rates were down across the board this week, lowering borrowing costs for potential home buyers and refinancers.
“After holding steady last week, rates dipped slightly this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 10-year Treasury yield fell roughly 7 basis points, while the 30-year mortgage rate dropped 4 basis points to 3.90 percent.”
Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 9:
30-year fixed-rate mortgages: averaged 3.90 percent, with an average 0.4 point, dropping from last week’s 3.94 percent. Last year at this time, 30-year rates averaged 3.57 percent.
15-year fixed-rate mortgages: averaged 3.24 percent, with an average 0.5 point, falling from last week’s 3.27 percent average. A year ago, 15-year rates averaged 2.88 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.22 percent, with an average 0.5 point, dropping from last week’s 3.23 percent average. A year ago, 5-year ARMs averaged 2.88 percent.

Daily Real Estate News | Friday, November 10, 2017

This is good news if you are planning on buying a home this coming winter cause now is the time to buy. The sellers are more willing to deal this time of the year, most sellers don’t want be paying  for heating a second home that they need to sell so they are open to offers this time of the year. I hope this information is helpful to you when looking for home to buy.

VETERANS DAY

Veterans Day is an official United States public holiday, observed annually on November 11, that honors military veterans; that is, persons who served in the United States Armed Forces. It coincides with other holidays, including Armistice Day and Remembrance Day, celebrated in other countries that mark the anniversary of the end of World War I; major hostilities of World War I were formally ended at the 11th hour of the 11th day of the 11th month of 1918, when the Armistice with Germany went into effect. The United States previously observed Armistice Day. The U.S. holiday was renamed Veterans Day in 1954. Therefore, the day is always recognized on November 11th, regardless of the day of the week the 11th falls on.

In 1919, President Wilson commemorated the first Armistice Day with these words:
“To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in the country’s service and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of the nations…”
The day was originally set aside to honor the Veterans of World War I with a day of parades and remembrances as well as a pause in activities at 11am on the day. In 1938, it was made a legal federal holiday for all. However, after World War II and the Korean War, Congress recognized a need to expand the meaning of the day to recognize all of our Veterans and not just those of World War I. In 1954, the word “Armistice” was replaced with “Veterans” as a way to formally include all Veterans of all American wars in the day of remembrance. Today, Veterans Day is a federal holiday which many cities celebrate with parades and ceremonies. In Washington, D.C., there are ceremonies throughout the city including a wreath laying at Arlington National Cemetery. Veterans Day is a day not only to remember those who died in service to our country, but also to recognize those who continue to serve today. Americans are encouraged to say thank you to those who fulfill this patriotic duty to maintain the freedoms of our country.

We here at Perrella would like to say THANK YOU to all our Veterans past and present for your service, you have done and are doing a great honor serving our country god bless you…

5 practical steps to save for a down payment

Determine how much you’ll need. Down payments generally range from 3% to 20% of your home’s purchase price, and the rest is your mortgage amount. So, contact us to find out the mortgage amount you qualify for. We’ll then explain your down payment options, so you can decide which option best fits your needs.

Calculate what you need to save monthly. Target when you’d like to purchase, which tells you how many months you have to save. If you’ve already set money aside, subtract that from the down payment amount. Divide this number by the number of months until purchase, and that’s what you’ll need to save monthly.
Open a separate savings account that automatically transfers from your checking account the monthly amount you need to save.

Track your spending. Carefully look at your credit card bills and checkbook to see where you can cut back non-essential expenditures, such as movies and meals out.

Trim recurring expenses. Shop for lower costs for cell phones, cable TV, internet, utilities, car, home, health insurance, etc.

These are just some practical ideas for you if you are deciding on getting a home loan in the near future. We here at Perrella hope you have a warm and safe weekend.

Veterans Day is Saturday November 11th. Please remember our veterans and thank them for their service.  Check out celebration programs for vets and military service members across the Iron Range.

Best time to sell is when you are ready! Don’t worry about the season. There is always a reason why that season is better. Less competition in the winter. Call today to list your property.

Check out the new St. Louis County ATV trail maps, can be down loaded to your mobile app.

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