Buyer Resources
Benefits of Homeownership
Benefit from additional tax write offs through home ownership such as property loan interest paid over the course of a year.
Real estate has long-term, stable growth in value. Year to year you will experience different fluctuations in the value of your property but long term you will gain from the increased value of your property. This added value can benefit you as you approach retirement or when you meet your sale goals.
Build equity in your home monthly as you pay down your mortgage versus paying rent and never seeing a long term benefit from your continued efforts.
Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.
Enjoy the freedom of making your home special to your designs and entertainment needs. Have the freedom to share your space unencumbered by landlords and neighboring tenants.
Remaining in one neighborhood for several years gives you a chance to participate in community activities, let’s you and your family establish lasting friendships, and offers your children the benefit of educational continuity.
Why it is key to have a Buyers Agent
When searching for a home it is important to take into consideration all available sources of information available to make the best most sound purchase decisions. An educated and experienced Buyers Agent can provide you with the insight necessary to make sound financial choices. A Buyers Agent will be able to provide you with insight on:
• Provide you with exclusive access to listings that you find a desire to see. Your agent will work to get you access to all of your favorite listings.
• Property Value and Comparable Listings in the area showing you fair prices to ensure you don’t overspend on a particular property or area.
• Negotiating the best possible price while taking into consideration property value and amenities that can also be negotiated into your offer. Terms of a contract are essential and a knowledgeable buyers agent will be versed in the various terms available to you.
• Speaking directly to the sellers or their agent to ensure your best wishes are being maintained and presented properly.
It is important to understand that a buyers agent is compensated for their efforts through the sale of the property and that the seller is the responsible party for these fees, not you as the buyer.
Getting Pre-Approved
It is always recommended that you reference your personal banker to assist you in your pre approval. Often times, banks have programs that benefit the first time homebuyer through first time homebuyer programs that reduce the costs to buy a home by several percent. A knowledgeable banking representative can assist in the many forms needed to obtain a pre approval. A pre approval is NOT a commitment to borrow funds. A formal loan application will be required and a loan commitment letter will be issued by the bank once you have been approved for the funding.
Financing 101
Fixed-Rate Mortgage
The interest rate stays the same for the entire term of the loan —usually 15 or 30 years — so the interest and principal portions of your monthly payment remain the same. Your payments are stable and predictable, but initial interest rates tend to be higher on a fixed-rate mortgage than on adjustable-rate loans.
Adjustable-Rate Mortgage (ARM)
The interest on an adjustable-rate mortgage is linked to a financial index, such as a Treasury security, so your monthly payments can vary, up or down, over the life of the loan – usually 30 years. Some adjustable-rate mortgages have a cap on the interest rate increase to protect the borrower. The lower initial payments on ARMs make it easier for buyers to qualify.
Conventional Loan
A conventional loan can have as little as 3% down with mortgage insurance. To avoid mortgage insurance, you have to have a minimum of 20% down. The maximum amount for conventional loans is $424,100. Loans above $424,100 require a jumbo loan. The advantage of a conventional loan is that there is no upfront mortgage insurance payment and mortgage insurance can be removed when you have paid the loan down to 80%.
FHA
An FHA loan requires at least a 3.5% down payment. The advantage of an FHA loan is that it has lower credit score guidelines and allows higher debt to income ratios to qualify. This is generally a good choice for first time homebuyers, but be sure to talk to a trusted lender to determine if this is the right product for you.
VA
A VA loan requires zero down payment and does not require mortgage insurance. It also has lower credit score guidelines and allows higher debt to income ratios. This loan is reserved for qualified veterans. To determine if you qualify, you can work with your trusted lender to obtain your certificate of eligibility.
USDA
USDA loans require zero down payments, but they do require guarantee insurance, which is similar to mortgage insurance. Homes are restricted to designated rural areas determined by USDA, and USDA has maximum household income limits for eligibility.
Loan Pre-Application Checklist
When applying for a mortgage, your loan officer will require some information and documentation to finalize the application.
Information Needed For Application
• Full name, date of birth, and Social Security numbers for all borrowers
• Last 2 years residence history (dates included)
• Last 2 years employment history (dates and job title)
Documentation Needed For Application
• Last 2 pay stubs for all borrowers
• Last 2 years W2’s / 1099’s for all borrowers
• Last 2 months bank statements (all pages)
• Additional items may be required
Home buying processes
Working with a Towne Housing Real Estate Agent is easy. They will help you in your property search by providing you with listings that are new to the market through our automated system and based on your search criteria. Work with your agent to fine tune your search criteria and results to faster identify the best property for you. Searching for your new home can be fun and easy with help from a licensed professional who understands your goals, wishes and more importantly the market.
Before presenting your offer, your agent will work to provide you with a comprehensive overview of the local market to ensure your offer is as competitive as possible. It is essential to conduct proper due diligence when formulating an offer to remain competitive with others while not overspending unnecessarily. Our agents undergo regular training to utilize the latest programs and technology to automate the signing process for your convenience.
Terms to consider when formulating an offer to purchase include:
• Purchase Price
• Deposit Amount
• Included Features
• Appliances
• Furnishings & Exterior Features
• Inspection Contingencies
• Standard Inspection
• Radon Inspection
• Lead Based Paint Testing
• Financing Terms
• Closing Date
• Identifying your Property of Choice
• Making your Offer
• Choosing your Attorney
• Choosing your Financing Lender
• Home Inspection
• Property Appraisal
• Good Faith Deposit
• Loan Commitment
• Clear to Close
• Closing
• Move In Day
