Buyer Information

FINDING THE RIGHT HOME

The Only Source You Need

As your owner/broker of NorWisRealty.com LLC an independent real estate company, I can provide detailed information on almost any property currently listed for sale – whether it’s listed by a NorWisRealty.com LLC or another real estate company. If you see a “For Sale” sign or an ad in the newspaper that interests you, we have access to all the data. So call Scott Freimuth, your local NorWisRealty.com LLC real estate specialist for all the details:

• The listing price
• The description
• The special features
• The financing terms

And we will arrange an appointment to show you the property at your convenience. As your sales associate we will already be familiar with your housing and financial needs, so why go through the process again with someone else? We can save you time and take the hassle out of house hunting, and it won’t cost you a penny more!

Home Purchase Negotiation

Here are ten important questions you should ask me and why you should ask them.

Property Specific

1. How long has the property been on the market? Why: The length of time a property has been on the market may indicate the seller’s willingness to negotiate.
2. Have there been any price reductions during the listing period? Why: The amount of any price reduction, as it relates to the overall purchase price, may indicate the seller’s desire to attract an offer.
3. Have there been any other offers on the property? Why: It will be helpful to know what offers may have been turned down and for what reason.
4. What is the motivation of the seller? Why: Motivation is a key element in any negotiation. As an example, if the seller has already purchased a new property, your ability to close quickly may be an attractive element of the negotiations.
5. What personal items are included in the sale? Why: Anything the seller is willing to leave behind that you won’t need to buy when you move in has real value. Consider those items in your offer.

Neighborhood Specific

1. What is the price range of sold properties in the area? Why: This information is important since it will indicate the top and bottom of that specific market.
2. What is the average time on market for properties in this area? Why: Short market times may indicate a sellers’ market. If this is the case, you may face competition from other buyers.
3. What is the list to sale price ratio in the area? Why: This information will indicate sellers’ past willingness to negotiate and by how much.
4. What is the average sales price per square foot of recent solds? Why: This approach to establish value works best in a P.U.D. and/or where there are similar homes, lot sizes and improvements.
5. What other known factors about the property or neighborhood could affect value? Why: Review the Seller’s Disclosure Statement very carefully with me.

Final Recommendation If you will be financing the property, get preapproved for a mortgage prior to making your offer. This will show the seller your commitment and ability to perform. Preapproval can be extremely important in a sellers’ market.

HOME FINANCING CHOICES

In today’s fast-paced real estate environment, homebuyers need every possible advantage. NorWisRealty.com has made home buying simpler by helping buyers get “preapproved,” and not merely “prequalified.” What is the difference? Preapproval vs. Prequalification What could be more comforting than the peace of mind that goes with knowing your mortgage is fully approved? You will have a greatly improved negotiating position when you are preapproved for a mortgage. Sellers are more apt to negotiate with someone who already has a mortgage approval in hand. The preapproval letter lets the seller know they are working with a serious buyer. A preapproved buyer can also close on property more quickly – another major consideration for a motivated seller. Obtaining a preapproved mortgage is essential in a “sellers’ market” or where supply is limited. Preapproval uses basic information as well as electronic credit reporting. It is a true mortgage commitment. Which means a commitment to financing your home and an indication of the total mortgage amount available to you. Cendant Mortgage, as well as other mortgage lenders, can help you through the preapproval process. In most cases, there is no charge for this service. Ask me for more information. Prequalification, on the other hand is not a full mortgage approval, but an estimate of what you can afford. When you prequalify for a mortgage, the lender collects basic information regarding your income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount. Of the over 50 different mortgage types available, the two largest categories are fixed and adjustable rate mortgages, each with advantages to consider.

FIXED RATE MORTGAGE

The fixed rate mortgage is a traditional method of financing a home. The interest rate stays the same for the entire term of the loan – usually 15 or 30 years – so the interest and principal portions of your monthly payment remain the same. Your payments are stable and predictable, but initial interest rates tend to be higher on a fixed rate mortgage than on adjustable rate loans. Many fixed rate mortgages cannot be assumed by a subsequent buyer. Adjustable Rate Mortgage (ARM) The interest on an adjustable rate mortgage is linked to a financial index, such as a treasury security, so your monthly payments can vary over the life of the loan – usually 25 to 30 years. Most adjustable rate mortgages have a lifetime cap on the interest rate increase to protect the borrower. The lower initial payments are ARMs make it easier for buyers to qualify. Some ARMs may be converted to fixed rate mortgages at specified times, usually within the first five years. Documents Needed to Apply for a Mortgage When you apply for a mortgage, you will need to furnish information regarding your income, expenses and obligations. It will save time if you have the following items available:

• Two most recent pay stubs
• W-2s for the last two years
• Federal tax returns for the last two years
• Last Two months’ bank statements
• Long-term debt information (credit cards, child support, auto loans, installment debt, etc.)

Repairing Past Credit Problems Have you had situations in the past that have put blemishes on your credit? There are many reasons why credit problems occur. Some explanations are:

• You were a co-signer on a loan that wasn’t paid on time
• You allowed someone else to use your credit cards
• You may have thought your spouse paid the bill
• You thought your insurance company was going to handle the payment
• You are divorced buy your former spouse had a credit problem

Some lenders will work with you to find a credit solution. They have special programs and financing options that allow you to get a mortgage even with minor credit blemishes. However, it is in your best interest to keep your credit report in good standing. Here are some helpful hints for your credit report:

• Never go over 90 days past due on any account
• Keep your credit card debt below 50% of your monthly obligations
• If paying bills after the due date, always pay within the grace period

Answers to Some Frequently Asked Financial Questions

Q. What is the difference between “Prequalified” and “Preapproved?”
A.  A Prequalification consists of a discussion between a homebuyer and a loan officer. The loan officer collects basic information regarding the customer’s income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount for the homebuyer. The prequalification is not a full mortgage approval, but estimates what a homebuyer can afford. A preapproval, on the other hand, is a comprehensive approach using basic information as well as electronic credit reporting. Preapprovals, in most cases, are true mortgage commitments. The lender commits to financing your home and indicates the total mortgage amount available to you.
Q. What types of mortgage programs are offered?
A.  Currently, there are over 50 different mortgage products available, including:

• 15, 20 & 30 year fixed rate loans
• adjustable-rate loans
• new construction financing
• VA & FHA loans
• 5 & 7 year balloon loans
• and many more

Q. How long does it take to process a mortgage application?
A.  Usually about 45 to 60 days, although it can take a few as seven days and as long as 90 days for some transactions. The actual time depends on how quickly the lender can get an appraisal of the property, a credit report and verification of employment and bank accounts.
Q. What documents will I have to provide?
A.  Be prepared to provide verification of income (including a pay stub and recent tax returns), bank account numbers and details on your long-term debt (credit cards, auto loans, child support, etc.) If you’re self-employed you may also be required to provide financial statements for your business. In recent years, lenders have been required to obtain more specific information from borrowers in order to package and sell loans to investors. If you were lending someone such a large amount of money, you’d want detailed financial information.
Q. Could anything delay approval of my loan?
A.  If you provide the lender with complete, accurate information, everything should go smoothly. You may face a delay if the lender discovers credit problems – a history of late payments or non-payment of debts, or a tax lien. You may then be required to submit additional explanations or clarifications. You should also be sure to notify your lender if your personal or financial status changes between the time you submit an application and the time it’s funded. If you change jobs, get an increase (or decrease) in salary, incur additional debt or change your marital status, let the lender know promptly. You may be delayed if the home you selected fails to appraise for the agreed purchase price.
Q. What’s included in my house payment?
A.  Principal and interest on your loan. Depending on the terms of your loan, the payment also may include hazard (homeowners) insurance, mortgage insurance and property taxes.
Q. Can I pay those other things separately?
A.  Not if it’s an FHA or VA- insured loan. With most other loans, you can pay your own taxes and insurance if you borrowed no more than 80 percent of the purchase price or appraised value of your home. Check with your lender to be sure.
Q. What do the closing costs include?
A.  Closing costs cover processing and administration of your loan. In addition to a loan fee, you’ll usually be asked to prepay interest charges, to cover the partial month in which you close, and impounds for property taxes, hazard insurance and mortgage insurance.
Q. When do my mortgage payments start?
A.  Usually about 30 days after closing. The actual date of your first payment will be included in your closing documents.

If you have any more questions? Please Call Us.

 

Understanding the Language