Simplify Your Home Buying Experience
Buying a home can be an enormous undertaking, so be sure
to retain the services of a qualified REALTORŪ. You can trust
our REALTORSŪ to always keep your interests first and foremost.
As qualified professionals, we'll guide you through the entire
home buying experience and assist you in being an educated
Simplify Your Search
What features would you require in a home to satisfy your
lifestyle now and in the future? Once you know what you can
afford, we'll help you explore your possibilities; from design
preferences to neighborhood choices.
Once you have found the home that is right for you, it's
time to present an offer. This will consist of earnest money
to be held in an escrow account, a loan pre-approval letter
if you will be financing the purchase, and a written purchase
agreement. This agreement will set forth your terms of the
purchase and a schedule of events in order to own the property.
This extremely important document is a legally binding agreement
and should be carefully prepared by knowledgeable REALTORSŪ
who are qualified to cover all of your interests.
Upon your complete satisfaction, arrangements will be
made to attend a closing. The closing is usually facilitated
by a title or escrow company that holds your earnest money
in escrow. After furnishing the down payment and other applicable
fees have been agreed upon prior to closing, final papers
will be signed. The deed and mortgage will need to be recorded
in the state Registry of Deeds, and you will be a homeowner.
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It is highly rewarding to buy, own and maintain your own
home. Whether this is your first home or you have experience
with the home buying process, we can help. When you have the
tools at your fingertips, you can be confident in your ability
to search, finance your home, negotiate terms and be prepared
Purchasing a new home can be overwhelming. Without the right
resources and information, the buy process can be stressful
and frustrating. With our services, you can avoid the pitfalls.
We'll be there to help every step of the way.
Rate Mortgage (ARM)
A mortgage, which allows the lender to adjust the mortgage's
interest rate periodically on the basis of changes in a specified
index. Interest rates may move up or down, as market conditions
change. The change in interest rate will result in a change
in the periodic payments due under the mortgage. ARMs are
attractive when short-term interest rates are trending lower.
Usually a short-term fixed-rate loan that involves small
payments for a certain period of time with the balance due
in a single, large payment at a time specified in the contract.
Whenever the balloon mortgage becomes due, the entire unpaid
balance is due. Generally, the homeowner must either refinance
or sell the property.
The payment of extra money on a loan now so as to provide
a lower interest rate over either a given period or over the
life of the loan. To buy-down a mortgage, the buyer pays additional
points to the lender, which will decrease the interest rate
for a specific period.
Conventional home mortgages, first mortgages up to loan
amounts mandated by Congressional directive, which meet the
qualifications for sale or delivery to either the Federal
National Mortgage Association (FNMA) or the Federal Home Loan
Mortgage Corporation (FHLMC).
A structured, short-term loan to provide funds necessary
to begin construction on buildings or homes.
A mortgage loan made by an institutional lender without the
inclusion of government guarantees such as VA or FHA loans.
The convertible ARM is a combination of both fixed-rate
and adjustable rate mortgages, allowing the best of both options
in one package.
A mortgage in which the payment is not sufficient to
cover the principal and the interest and the payment portion
of the interest is postponed until a certain date at which
time the interest postponed is added to the principle owing.
Home Loan Mortgage Corporation (FHLMC)
The Federal National Mortgage Association is a congressionally
chartered, shareholder-owned company and is the largest national
supplier of home mortgage funds. It is commonly known as Freddie
Mac. The company buys mortgages from lending institutions,
pools them with other loans, and sells shares to investors.
Detailed information may be found at http://www.freddiemac.com.
Housing Administration (FHA)
An agency of the federal government, the Division of the
Department of Housing and Urban Development, that sets standards
for the underwriting of private mortgages and insures residential
mortgages made by private lenders.
Housing Administration (FHA) Loans
Federal Housing Administration (FHA) low-rate loans are
available to Americans with smaller incomes who are interested
in modestly priced homes. Down payment requirements are usually
lower than the prevailing ones.
National Mortgage Association (FNMA)
The U.S.'s largest supplier of mortgages to home buyers
and owners, a corporation established by Congress and owned
by stockholders. It is commonly referred to as 'Fannie Mae,'
this government-sponsored enterprise is chartered by Congress.
This federally chartered agency buys mortgages from lending
institutions, pools them with other loans, and sells shares
to investors. Detailed information may be found at http://www.fanniemae.com
The interest rate you pay and the monthly principal and interest
payments are agreed upon from the outset and will not change
throughout the entire term of the mortgage.
National Mortgage Association (GNMA)
A government-owned corporation within the U.S. Department
of Housing and Urban Development, it is also referred to as
'Ginnie Mae,. This government agency guarantees the
payment of principal and interest on all of its pass-through
securities, and its guarantee is backed in turn by the full
faith and credit of the U.S. Government.
Payment Mortgage (GPM)
A mortgage that usually starts the borrower with low payments
that are gradually increased over five to ten years, before
leveling off for the remainder of the term of the loan until
the loan is fully amortized. Negative amortization usually
occurs until the payment reaches the level payment stage.
Usually government insured loans (VA or FHA)
Equity Mortgage (GEM)
This is a long-term mortgage whereby the borrower agrees
to increase his payment each year by an agreed amount. The
added money per payment is applied directly to the outstanding
principal on the mortgage. The mortgage thereby is paid off
in a shorter number of years.
Rate Mortgage (RRM)
Similar to an Adjustable Rate Mortgage, this type of mortgage
allows the interest rates and payments to be adjusted periodically
according to an index.
Annuity Mortgage (RAM)
A type of mortgage where the property's equity serves as security
for periodic payments made by the lender to the borrower.
Mortgage is generally paid out upon the sale of the property.
A mortgage where the payments are only guaranteed for three,
four, or five years. The borrower is allowed to refinance
at the end of the term at the interest rate then applicable.
Appreciation Mortgage (SAM)
It is a loan arrangement where two or more parties participate
in the purchase of real estate and share the appreciation
and tax deduction. Similar to shared equity mortgages.
Mortgage loans to veterans by banks, savings and loans, or
other lenders that are guaranteed by the Veterans' Administration,
enabling veterans to buy a residence with little or no money
A secondary financing option in which a new larger mortgage
is created to encompass the first mortgage. This large second
mortgage is used to preserve the low interest rate on the
first mortgage for a potential buyer.
Drive To Learn
Evaluate as you drive though a community. Consider the
following questions as a basis for determining your location
- Where is the nearest shopping center, bus line, police
station and library?
- What schools are available and school district are you
- What types of homes (single family, apartments, condominiums)
are in the neighborhood?
- How far apart are the homes?
- How far is it to your work?
- What community resources are available?
- Generally, where are the cars parked (driveways, garages,
- Do you notice a lot of noise, traffic or pollution?
- Are the homes in good repair and the landscaping well
Finding The Right Home
Keep your eyes open and your notebook in hand as you walk
through a potential home. Consider the following questions
as a basis for determining your needs as a homeowner:
- How long has the home been on the market?
- Why is the home being sold?
- What is the asking price of the home?
- Has the price been lowered?
- Is the price comparable to other homes in the neighborhood?
- What is the down payment required?
- Is the house structurally sound?
- Is there room enough for the present and the future?
- Do you like the floor plan of the home?
- What condition is the yard in?
- What improvements must be made?
- Will the seller repair or replace any items that need
repair or replacement?
Think carefully about each house you see and dont
be in a hurry. Your REALTORŪ can point out the pros and
cons of each home from a professional standpoint.
Making an offer to buy a home entails many factors. You
and your REALTORŪ will discuss the following factors prior
to putting the offer on the table:
- Amount of earnest money
- Down payment
- Price you are offering
- Details of financing
- Proposed move in date
- Proposed closing date
- Details of the sale
- How long the offer is valid
The seller will either accept the offer as presented, or
make a counter offer and either you will agree to the terms
in counter offer or you will submit another proposal. When
all the parties involved have agreed upon the details, initialed
any revisions, and signed the final agreement, then an offer
becomes a contract.