The buying process

 

Most buying processes involve the following steps:

  • Save for your down payment and closing costs

  • Make sure your credit is where it is supposed to be

  • Get pre-approved for a mortgage

  • Find a real estate agent

  • Begin house hunting

  • Make an offer on a house (Submit a contract)

  • Get a home inspection (Ordered by you)

  • Ask for repairs or credits (If Applicable)

  • Get a home appraisal (Ordered by the lender)

  • Obtain title insurance, clear title, survey etc (Completed by title company)

  • Complete home owners association application (If Applicable)

  • Obtain home owners insurance (If Applicable)

  • Get an approval and clear to close from lender

  • Do a final walk through the day before closing

  • Close On Your New Home

 

Your Credit

Your credit report shows a summary of your payment history.  Lenders use this information to determine how responsible you are in terms of not only paying your bills but also paying them on-time.  If at least your minimum balance is paid on-time every month, then you will have a decent score, which is then used to grant you a loan and also determine your interest rate.  Some important financial accounts, also called "tradelines" that may impact your credit score are as follows:

  • The number of tradelines you have.

  • How many open accounts

  • How old are these accounts

  • Balances too high relative to your available credit limit

  • Late payments, foreclosures, bankruptcies, short sales, Repos, child support etc.

  • Applying for credit too frequently in a short amount of time

Your credit scores range from 300 - 850 and varies between the 3 credit bureaus which are Equifax, Transunion & Experian.  The ideal score is from 720 and up.

You can obtain a free copy of your credit report from each of the 3 bureaus by going to www.annualcreditreport.com.  This is the only official website by the federal government that allows you one free report from each bureau each year. There are 3 options to obtain your free credit report:

  1. Request online at http://www.annualcreditreport.com

  2. Download the form from the website, complete, sign and mail in with proof of address and a government identification.

  3. Call and make your request by phone by calling 1-877-322-8228, go through the verification process, and your report will be mailed within 15 days.

 

Why You Should Not Make Any Major Credit Purchases

 

Don’t go on a spending spree using credit if you are thinking about buying a home, or in the process of buying a new home. Your mortgage pre-approval is subject to a final evaluation of your financial situation.

Every $100 you pay per month on a credit payment could cost you about $10,000 in home eligibility. For example, a car payment of $300 per month could mean that you qualify for $30,000 less in a mortgage.

Even if you have accumulated enough savings, you should consider not making any large purchases until after closing. The last thing you want is to know that you could have purchased a new home had you curbed the urge to spend.

 
The Importance of An Inspection

As a buyer, you are entitled to know exactly what you are getting. Don’t take for granted what you see and what the seller or the listing agent tells you. A professional home inspection is something you MUST do, whether you are buying an existing home or a new one. An inspection is an opportunity to have an expert look closely at the property you are considering purchasing and getting a written opinion as to its condition.

Beforehand, make sure the report will be done by a professional organization, such as a local trade organization or a national trade organization such as ASHI (American Society of Home Inspection). Not only should you never skip an inspection, but also you should go along with the inspector during inspection. This gives you a chance to ask questions about the property and get answers that are not biased. Once the inspection is complete, review the inspection report carefully.

You have to demand an inspection when you present your offer. It must be written in as a contingency; if you do not approve the inspection report, then you don’t buy. Most real estate contracts automatically provide an inspection contingency.

 
Important Reasons Why You Should Have Title Insurance
  • Forgery

  • Fraud in connection with the execution of documents

  • Undue influence on a grantor or executor

  • False personality by those purporting to be owners of the property

  • Incorrect representation of marital status of grantors

  • Undisclosed or missing heirs

  • Wills not properly probated

  • Mistaken interpretation of wills and trusts

  • Mental incompetence of grantors

  • Conveyance by a minor

  • Birth heirs subsequent to the date of a will

  • Inadequate surveys

  • Incorrect legal descriptions

  • Non-delivery of deeds

  • Deeds executed under expired or false powers of attorney

  • Confusion due to similar or identical names

  • Interest rights of ex-spouse or former owners

  • Clerical errors in recording legal documents

  • Delivery of deed after the death of a grantor

 

Important Reasons To Have Homeowners Insurance

This is a type of insurance that covers your home and its contents, plus liability.  Lenders will not allow you to purchase a home without having the security of homeowners insurance.  They need the assurance that the home will be protected from any type of natural disaster, fire or anyone getting hurt while on the property.  It is the buyers responsibility to shop around for a good rate while ensuring that adequate insurance is being purchased. If you are a cash buyer, the same applies.  However, while having insurance is not mandatory for cash buyers, it is highly recommended.

Do This After Closing On Your Home​ ​

 

  • Forward your mail to your new address (www.USPS.com)

  • File your homestead Exemption with the County.  (Primary residence only)

  • If your closing took place during hurricane season (June-November), chances are your insurance premium is a bit on the higher side.  Shop around for a lower premium when season is over and notify your mortgage holder if successful.

  • Go online and search for a mortgage calculator with an amortization schedule with extra payment. Play around with different amounts of monthly extra payments.  This will show you how much interest you can save and in how many years you can pay off your mortgage sooner.