What You Should Know Before Buying a Home

By
Real Estate Agent with Coldwell Banker C&C Properties

IF YOU'RE PLANNING OF BUYING A HOME IN 2013, HERE ARE

 10 TIPS YOU SHOULD BE AWARE OF BEFORE BUYING A HOME

  1. Before you start looking for your home, get pre-qualified for a loan. Banks, credit unions and mortgage bankers make home loans; mortgage brokers process them. The lenders will take an application, process the loan documents, and see the loan through to the funding stage. We recommend you work with a local lender and if you don't know one, we can make a recommendations.
  2. If you have marginal or bad credit,  a lender will also assist you in that process. You may be able to qualify for a loan depending on how long ago and what reason(s) caused the bad credit. A lender should be able to advise you on whether your credit history will prevent you from qualifying for a home loan. It's important you take care of credit issues before you start shopping for a home.
  3. You will need a down payment. Down payment requirements vary depending on the type of loan. Many down payment assistance programs exist, ask your lender. These programs may loan or grant you the funds necessary for the down payment. 
  4. You will need funds for closing costs. Closing costs are charges for services related to the closing of your real estate transaction. They include, but are not limited to: Escrow fees charged by the company handling the transaction
    • Title policy issuance fees charged by the title insurance company
    • Mortgage insurance fees
    • Fire and homeowners insurance
    • County Recorder fees for recording your deed
    • Loan origination fees

 

Your lender will inform you of the actual estimate of these costs, as well as information about loan programs which can assist in financing your closing costs.

  1. Some loans have "points" and some do not. A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate they constitute the yield on your loan for the lender. Some lenders charge a higher interest rate to compensate for charging no points. 
  2. Should you select a mortgage with a fixed rate or an adjustable rate? The answer to this question depends on whether mortgage rates are at a high or a low point when you purchase, and on how long you plan to live in your home. If rates are high, an adjustable rate might be attractive since subsequent rate drops could reduce your monthly payments. Additionally, lenders may offer a low rate during the first few years of an adjustable mortgage to make it appealing to you. If interest rates are low you might want to take a fixed rate to protect yourself against the possibility of rising interest rates.
  3. Be aware of the two main types of loan categories.
    • Conventional Loans. Conventional mortgage loans are available with fixed or adjustable interest rates. Some loans may require mortgage insurance.
    • Government Loans. These include Federal Housing Administration (FHA) fixed and adjustable rate mortgage loans, and Veterans Administration (VA) fixed rate mortgage loan.
  4. If you are a low or moderate income homebuyer in the Redding CA area, there are special programs designed to help you. These loans are available through private lenders, as well as local and state housing agencies. As your Redding CA Real Estate agent, we will inform you of these programs as they become available. 
  5. Why might I have to pay mortgage insurance? Mortgage insurance protects the lender from potential loss if you should default on your mortgage loan payment. Generally, conventional loans that require larger down payments do not require mortgage insurance. Mortgage insurance is always required on FHA mortgage loans. 
  6. Many organizations offer home loan counseling to prospective homebuyers, in fact we've had several clients that have taken these classes, they're designed to inform you of the steps to homeownership. They will cover home selection, realtor services, lenders, loan programs, homeownership responsibilities, saving for a down payment, and other important pieces of information. Many first-time homebuyer programs require homebuyers to attend this type of class to be eligible for selected programs. Again, this is something we, along with your local lender will notify you of.

 

 

 

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Chris and Maria Jeantet, "the real estate couple"

EMAIL US maria@ccproperties.com

CALL Chris at (530) 510-0810 or Maria at (530)510-8880

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Rainmaker
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Bill MacBride
Ski-in/Ski-out, Luxury homes, Second Home Buyers - Mammoth Lakes, CA
Mammoth Lakes Resort Real Estate

Chris & Maria,

Nice post. Easy to read. Informative and useful.

Those tips are something all new home/condo buyers should be aware of. Being aware and understanding this information before writing an offer makes the whole process transparent therefore much less intimidating.

Redding is a great town. I've done alot of mountaineering on Mt. Shasta and I love that area of California.

Of course, where I live in Mammoth, the mountains aren't bad either.

Have an outstanding 2011!

Bill MacBride

Mammoth Lakes, Ca.

Aug 11, 2011 09:01 AM #1
Rainmaker
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Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA

Chris and Maria:

Nice post with basic information that a buyer should understand before making an offer.  Many agents just assume that their buyers understand everything you mentioned.  Most of the time, that is not true.

Aug 13, 2011 04:40 PM #2
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Chris and Maria Jeantet

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