Dos And Donts Of Buying A Home

Industry Observer

1. How do home loans work   

Home loans were originally designed to provide you with the cash you require to finance the actual purchase of a house with a guaranty to repay the loan plus interest. However, failure to repay your home loan could lead to the forfeiture of the house as the collateral for your loan. It was the property that was seized and sold to recoup the money owed. it was a way of ensuring that those who were able to did so with ease.The whole concept behind home loans is fairly simple. Home loans are secured loans that are made against a property that is held as security by the borrower. These loans have relatively low interest rates compared to other forms of finance and there is also the option of paying points up front in order to secure the loan and keep interest rates low. These loans tend to come with longer repayment periods than other types of finance and this is reflected in the fees charged.

There are many different ways to secure home loans and some of them include the option of borrowing against your equity in the property. You could also borrow up to an agreed amount in an offset account. The offset account is an account in which you keep a certain amount of money from your annual income in order to borrow at a higher interest rate.

The second most common type of home loan is to borrow against the purchase price of the property. Although this will not normally be the cheapest way to borrow, home loans often allow people to take out larger amounts of money that they could if they chose to take out a mortgage. By borrowing against the purchase price of the property you can make savings on interest rates and the total cost of the mortgage. However, you are not likely to get this benefit if you choose to take out a fixed mortgage rate, as the purchase price is likely to fluctuate.

If you wish to secure home loans, you will usually have to look to take out either a fixed rate or an ARM. Fixed rate mortgages offer a set rate throughout the entire life of the loan, regardless of how much you pay towards it each month. The ARM works by allowing you to borrow a higher amount of money at a lower interest rate, although the total cost of the mortgage will also be higher. Both these types of loans tend to have longer repayment periods, which is beneficial as you will not have to find a lump sum to pay off your mortgage early.

Homeowners can also take out both types of loan, with the only difference being that the ARM will usually last for a shorter period. While the ARM lasts for thirty years, fixed home loans can be taken out for up to thirty years. When looking at home loans and the best way to go about taking one, you should consider your needs and how much you can afford to borrow. Take a good look at the different schemes and what repayment amounts are involved and compare them to your current financial circumstances and how much you can afford to repay monthly.



     2. Real estate agents   

A real estate agent, real estate broker or realtor is someone who represents buyers or sellers of real estate. While a broker can work on his/her own, most often an agent is works under a licensed broker for both the sellers and buyers. The seller and the buyer have a contract with a real estate agent that outlines all the duties and responsibilities of each party. This contract called an "agreement," which is often referred to as a "contract of sale."

In today's real estate market, commissions are commonly paid on the sale price of a property. Most real estate agents receive a percentage of the commission. The amount they receive is dependent upon the real estate transaction, the property location and the agent's experience. If the real estate transaction is a successful one, agents will typically receive a six percent commission. This six percent commission rate is much higher than what was paid in the past and has resulted in recent declines in real estate agents' incomes. However, if a real estate transaction goes poorly, the income earned by real estate agents still significantly outweighs the six percent commission rate.

In contrast to commissions, sellers pay a certain amount of money up front, known as an "advance fee." This upfront fee, often paid by a seller, is separate from the commission earned and is generally determined by the type of property being sold. In some cases, sellers pay nothing, while others require a monthly payment by the time of closing. Sellers who require a down payment also pay a commission to their real estate agents. Depending on the market conditions at the time, sellers may pay a lower commission than they would have otherwise paid.

While most brokers and real estate agents receive regular commissions, there are differences between them on their actual duties. Brokers work with multiple clients at one time, making it easier for them to earn a percentage of the total sales. However, the majority of brokers report to the brokerage that they are meeting their obligations to their clients, including on time payments, accurate billing and detailed paperwork. Most agents, on the other hand, report to the office of the commission chairperson, making it easy to track payments and ensure that they are meeting their obligations. It is rare for a real estate broker to meet with a client more than once or twice during any given week.

Many buyers think that real estate agents are responsible for helping them find a home, but this is not the case. Most brokers and realtors work in a solitary environment, corresponding only with the buyer. Most agents do not communicate directly with lenders and investors, although some do hire mortgage experts and sometimes transact with them. Some realtors help their clients evaluate multiple offers, but most make their sales referrals. A handful of brokers actively work with realtors, helping them find buyers and sellers for their properties    


 3. Home Buying Tips 

If you have decided to buy a new home, you have probably done so with great excitement and anticipation. Knowing what you want and what your needs are is half the battle when it comes to the buying process. You should therefore have a good idea of what your new home should look like. Understanding the entire buying process will also give you an advantage over potential competitors, and as such, you will gain an even better understanding of how to obtain the perfect home through careful planning. However, keep in mind that while you are shopping for a pricey home, the pool of buyers available to you is far fewer than what would be available to you if you were more patient, so don't be disappointed if you don't end up finding the home of your dreams in a quick amount of time.

The first thing that you should keep in mind when it comes to home buying tips is that it is always good practice to hire a reputable home builder if you plan to build. While you may not have experience in the field, it is always advisable to work with a professional. This way you will ensure that you get the best possible deal on the house. Also, working with a licensed and insured builder will reduce your risk of facing legal problems later down the line, since you have a legally binding contract. As such, when it comes to custom home builders it is always wise to invest a little extra money, as you will save yourself considerable headaches in the future.

Once you have chosen a builder, you will then need to understand one of the most important home buying tips - choosing a custom home builder is a good way to reduce the cost of building your dream home. New construction means that you are always starting from scratch, so there is no way that you can anticipate any problems with the construction process. In fact, there is even less room for problems at new construction sites, as they do not have an established reputation. Custom home builders on the other hand have a reputation attached to them, which means that if they screw up on your project, there will be major public relations issues and a large number of dissatisfied customers.

However, this does not mean that you should go with a new construction company all the time. There are always contractors or lenders who are experienced in building custom homes. If you are having a hard time finding a builder, you should consider asking builders for referrals or recommendations. Typically, most homeowners would not recommend their builders to someone who is looking for a custom home builder, but there are always exceptions.

When buying a pre built home be sure to hire a professional home inspector to ensure the home is in move in condition. If it is an older home you will need to be sure to have any necessary upgrades made by a professional and older homes tend to be very inefficient in terms of energy waste which can cause lofty Con-Ed utility bills.

The final thing you need to understand regarding home buying tips is that it is always important to thoroughly check out all your options when it comes to mortgage loans. Not only do you need to make sure that you get the best deal possible, but you also need to make sure that you are making the right decision. One of the easiest ways to do this is to compare loan offers from a variety of mortgage lenders. Home buyers frequently make the mistake of only considering one type of loan, such as a conventional mortgage, an FHA loan, or a VA loan. While all of these loans have benefits, they are also all unique and have their own set of drawbacks and advantages.

For example, with a conventional mortgage, there is usually a greater risk of delinquency on the mortgage. FHA mortgages and VA loans have stricter lending standards, although there is some leeway in the lending policies of these loans. Another one of the home buying tips for first time homebuyers is to only consider a mortgage loan if the mortgage lender offers an "automatic" refinance option. This simply means that if you are interested in a particular mortgage offer, the mortgage lender will send you an automated refinance notice. However, if you do not accept the offer, you still have the option to reapply at another time before the end of your current term, in most cases.

Comments (3)

Filipa Scazez

Great post! Thanks for sharing!

Jul 05, 2021 09:29 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello and great information to share with us here in the Rain.  Make it a great day!


Jul 05, 2021 09:35 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Nice information to share with buyers, especially first-timers!    They always have lots of questions.

Jul 05, 2021 04:01 PM