Archive for the 'Home Buyer Education' Category
Crayon Post: Interest Rates Matter
August 20th, 2009
Categories:Home Buyer Education
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Top 10 Myths Shared by First Time Homebuyers
August 18th, 2009
Categories:Home Buyer Education
This morning I came across an article listing the top 10 myths shared by first time homebuyers. While I don’t believe all of these are as common as they would have us believe, these are some excellent and very valuable myths to discuss.
Here are the Top 10 Myths:
- All real estate agents are the same
- The agent on the for sale sign will look out for my interest
- I can find all properties for sale on my own
- If i just wait long enough, I’ll find the perfect home
- I’ll improve the odds of finding the house i want if I work with more than one agent
- Buying a house is as simple as agreeing on a price and signing a few papers
- Foreclosures are the best deal
- Getting a mortgage should be quick and easy
- All mortgages are essentially the same
- If something appears on the inspection report the seller has to fix it
Myth #1: All Real Estate Agents Are the Same
I actually feel pretty bad for my friends and family, because they have certainly heard me beat this topic in the ground. I’m very passionate when it comes to changing the standards and expectations for Realtors. Read the rest of this entry »
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FAQ: Why Do I Have to Pay the Hazard Insurance Premium Up Front?
August 3rd, 2009
Categories:Home Buyer Education
The hazard insurance premium, (also known as homeowner’s insurance) is an interesting topic. While homeowner’s/hazard insurance is commonly looked at as being voluntary on the homeowner’s part, it is typically something the lender will require the homeowner to have. In fact, Arizona’s state banking laws require lenders to collect a year of insurance upfront.
Essentially the lender/bank wants to make sure the home they are loaning you money for is insured against a variety of potentially damaging situations. These situations might range from floods to vandalism. Simply put, if your home gets flooded they want to know insurance is in place to protect your home and their financial investment.
Since the homeowner’s/hazard insurance is usually required by the bank, they will want to have record the home is insured before funding your loan. Hence why they want the premium paid upfront.
When it comes to homeowner’s/hazard insurance i would recommend talking with your insurance agent to determine the best policy. The most common homeowner’s/hazard insurance policy is referred to as a “basic form”. There is also a “broad form” available that covers a larger list of items.
Here’s a list of the most common items you will find in each form Read the rest of this entry »
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So Many Types of Loans, How Does One Choose?
July 22nd, 2009
Categories:Home Buyer Education
When talking to a loan officer, you will normally hear about the traditional types of loans. In this market you might only hear about FHA loans because they are becoming so popular and universal.
However, a good loan officer should be able to give you additional financing options to help you make the best decision for your specific needs, wants and goals.
Here is a list of the most common financing techniques:
- Straight Loan
- Interest Only Mortgage
- Balloon Payment Loan
- Amortized Loan
- Adjustable Rate Mortgage
- Growing Equity Mortgage
- Reverse Annuity Mortgage
Straight Loan (aka Term Loan)
With a straight loan, the borrower makes periodic payments on the interest until the end of the term. At the end of the term, the borrow then pays the principal (loan) amount in full.
A straight loan used to be the only type of loan available. However nowadays this type of loan is most commonly seen in Read the rest of this entry »
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What Closing Costs Do You Have to Pay for at the Closing Table?
July 21st, 2009
Categories:Home Buyer Education
This question was sent to me twice last week, so I thought I would post the answer in blog for anyone else looking for this answer.
Below you’ll find a laundry list of the fees you will most likely see in a real estate transaction. When deciding who pays for what fees, that will depend on what you negotiate when you agree to buy or sell the home. In this market, its a common misconception the seller pays for all the closing costs. While it happens a good deal of the time, it is still very common to see a buyer willing to pay their own costs.
When it comes to negotiating a purchase offer you’ll find one of two scenarios typically play out with the closing costs. Scenario One: The seller pays the closing costs and the sale price of the home remains the same or increases (to justify the amount of the closing costs). Scenario Two: The seller doesn’t pay any closing costs, but they decide to lower the purchase price of the home. Its normally a matter of how much cash the buyer wants to bring to the closing table.
Closing costs will vary from transaction to transaction based on 4 main factors:
- The state you are buying or selling a home in
- The fees charged by the title company
- The fees charged by the lender
- The terms agreed upon in the contract
I’ll break down some of the more common fees into sections. These fees are commonly broken down in a Good Faith Estimate (GFE) and in the HUD-1. The GFE will be given to you by your loan officer before you write a contract (ideally). The numbers on the GFE will only be estimates, hence the “E” in GFE. =) The HUD-1 will come about three to five days before closing and will contain Read the rest of this entry »
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Can I Pay Someone to Just Repair My Credit?
July 15th, 2009
Categories:Home Buyer Education
Need Help with Credit Repair?
We’ve all seen the countless ads for companies offering to fix your credit for low fees.
The truth is those companies can’t deliver and often you don’t find out until after you have paid them hundreds or thousands of dollars in fees.
The Federal Trade Commission, (FTC) states “self help is the best way to go when repairing credit.”
The truth is that no one can legally remove accurate and timely information from a credit report. Which means if you’re guilty of paying the credit card two weeks late every month, no one can fix that problem and it will be on your record for the next 7 years.
No-Cost Investigations
As a consumer, you are entitled to a no-cost investigation of your credit report. Think about it from this angle, credit card companies (at will) flag your account as late, past due, etc. They often report those issues without notifying you or giving you a chance to set the record straight. In which case you are entitled to a no-cost investigation of Read the rest of this entry »
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The 8 Phases of Stress for Homebuyers
July 14th, 2009
Categories:Home Buyer Education
Recently a buyer reminded me of our initial conversation when I explained to him the three most stressful life experiences.
Top Three Most Stressful Life Experiences
- Death
- Divorce
- Moving
The client had already been through a divorce, so I don’t think he took me very seriously. After all how stressful can buying a home be?
There are eight phases of stress when it comes to home buying.
- Deciding to Move
- Getting Qualified for the Loan
- Finding a Home
- Crossing Your Fingers for Acceptance
- Dreaded Inspection Period
- Loan Docs and Closing
- Moving In
- (gotta reach the bottom of the article)
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