Team Bralish, Real Estate, first time home buyers, Denver Metropolitan area, Denver Broncos, erie

HOME BUYING, DECIDING WHAT YOU NEED AND WANT!

Some suggestions to help you prepare for your search...
Needs and wants list: Make a list of your needs and wants. Do you need an extra bathroom, a garage, a fenced backyard, lower utility bills? Do you want a fireplace, a short drive to work, a lakeside view, or maybe minimal yard work?

Once your list is made, go back over it and decide what is most important to your lifestyle. It may be privacy, creativity, or recreation. Decide which items are musts and which you are willing to give up. Assign each item a priority so that you will know what to look for as you begin house hunting.

Location: Deciding where you want to live may be the single most important factor in choosing a home. Location affects your day-to-day living. Location to employment centers, shopping centers, schools, major traffic arteries, and other attractions are important. Evaluate location carefully. Location of a property is one of the most significant influences on value.

Your choice of location may be limited somewhat by the price you can afford.
Even so, make sure you consider such things as:

— Prices of properties and property taxes
— Distance to work, schools, shopping, and entertainment
— Proposed changes in land use such as commercial shopping centers and roads, and potential hazards such as flooding and noise from a nearby airport or highways.

Type of homes and lots: A single-family detached home is attractive to a lot of people because it typically provides more living space and land area than other types of living units. Typically the detached structure permits you greater freedom (less restrictions) on remodeling, expanding, painting, and altering the appearances of the structure.

If you don't like spending leisure time on yard work, consider garden or patio homes. These homes are set on small lots. Many garden home developments share common garden areas. A condominium is another option. Condos and patio homes often offer shared greenbelts or membership in private recreational facilities such as swimming, golf, and tennis.

New vs. Older homes: In selecting the type of home you want, consider new versus pre-owned homes. Pre-owned homes usually have established yards, and usually the neighborhood or subdivision is built-out. On the other hand, older homes may require more maintenance and need some repairs.

New homes are not without problems: Although they require less maintenance in the first few years, you may have to put in landscaping and call the builder back to correct faults. If buildings are still active in area, you may have to endure nearby construction.

Finally, consider size and style: You may already have in mind a wood-and-glass contemporary lodge with sun decks or a two-story Victorian mansion with a cozy attic. Or you won't know what you like until you see it. Either way, your agent with Team Bralish will listen to your preferences and help you find the right home for you.

What Can You Afford?
Before you begin looking at homes, you will want to determine what you can afford. That depends on three things:

Down payment

Qualifying for a loan

Closing costs

Down Payment: A conventional loan typically requires a down payment. It's not uncommon for buyers to place a down payment of 10 to 20 percent of the purchase price. For example, on an $80,000 home, a down payment of $8,000 to $16,000 in cash may be necessary.

Government-backed loans require 5 percent or less as a down payment. Loans insured by the Federal Housing Administration (FHA) and the Veterans Administration (VA) are particularly useful to first-time buyers.

The thing to remember is that the higher your down payment, the lower the risk you pose for the lender and therefore the lender may be able to offer you better loan terms. The higher the down payment the lower your interest expense on the mortgage will be.

Making An Offer/What to offer: Team Bralish can help you find your perfect home, but only you can decide how much you are willing to offer for it. Your agent can supply you with information about the selling prices and marketing time of other houses in the area.

Once you have determined the amount you are willing to offer, we will help you prepare a written offer. In most transactions you will offer to deposit earnest money with the escrow agent. Earnest money manifests your sincerity in making a reasonable offer and abiding by the terms of the written contract.

Contract forms: We will help you prepare an offer using Colorado Real Estate standard forms. The offer, if accepted, will become a binding contract. This document is the most important paper you will sign because it lays out all the terms of the transaction. It will contain such things as:

— A legal description of the property
— Any property that will be transferred with the home (like blinds, curtains, fireplace screens, etc.)
— The price
— Financing conditions and contingencies
— Amount of earnest money deposit, name of the escrow agent and title company
— Pro-ration of insurance, taxes, and interest
— Fees to be paid and who pays for which
— Rights to inspect the property and for repairs to be made
— Dates of closing and possession, and what happens if either party defaults on the contract.

Inspections and warranties: Before signing the contract, take precautions to protect yourself against unseen defects in the home. An inspection by a qualified inspector or other professional can provide you with unbiased opinions about the condition of components and systems in the property such as the foundation, mechanical systems, plumbing systems, appliances, etc.

If you can, accompany the inspector at the time the inspection is conducted. When ordering the inspection, ask the inspector the approximate time needed to complete the inspection so you can reserve sufficient time from your schedule. Be sure to ask the inspector to detail the scope of the inspection. Not every inspector inspects every component in a house. For example, does the inspector inspect foundations, air conditioning and heating units, roofs, swimming pools, septic tanks, etc.? The cost of home inspection depends on the size of the home, but the price could prove to be worth it.

You may also want to purchase a (Home Protection Plan).Such a contract is an agreement with a residential service company that certain items will be repaired by the company if such items fail to function after you move in. If you buy a new home, the builder may offer a warranty as well. Whether you buy a residential service contract or receive any other warranty, find out how claims will be processed and how any necessary repairs will be made.

Seller's options: Your agent should present the contract to the seller's agent or seller. The seller has three options: accept, reject or make a counter offer.

A counter offer is a rejection of the offer with a simultaneous offer from the seller to the buyer. If a seller makes a counter offer to you, you then have three options: accept, reject, or make another counter offer. Whoever makes an offer or counter offer is giving the power of acceptance to the recipient of the offer or counter offer.

Binding contract: Once you and the seller unequivocally agree to the written terms and both of you sign, the document becomes a binding contract.

As part of the contract you may have the right to have the property inspected and certain repairs may be required to be completed. Be sure that you pay close attention as to when certain items must be completed. Otherwise, you may waive some contractual rights. For example, the contract may provide for you to deliver a copy of the inspection report to the seller within a specified time and to deliver a list of the items you require to be repaired. If you fail to provide the information within the specified time, the contract may provide that you waived certain rights.

The contract may also set out other contingencies that have to be satisfied. We cannot address all conditions and contingencies. Read the contract carefully, know its terms and comply with its requirements timely.

If repairs are required, the contract will specify who will bear the cost of the repairs, who will arrange for the repairs, and when the repairs must be made. Before you close, be sure that the condition of the property meets the required condition specified in the contract.

Qualifying For A Loan: The key is not what you think you can afford but how much a lender calculates you can afford. Be prepared to provide the lender with a two to five year financial history that contains any of the following:

— Income: Gross monthly income as well as employment history, education, an d any secondary income such as bonuses, dividends, and child support. The lender may require a letter from your employer, W-2 forms, or, if you are self-employed, recent tax returns.
— Assets: Current checking account balances, savings accounts, stocks and bonds, certificates of deposit, other property, insurance policies, and pension funds.
— Credit: Debts on cars and appliances, debts on all credit cards, and history of debt repayment. Your lender will more than likely ask for a credit report, so you may want to attack these to clear up any known (or unknown) negative entries well in advance (preferably 60-90 days prior to starting the process).

Your Team Bralish agent will help you determine what price range and monthly payment you can afford. The monthly payment typically consists of principal, interest, taxes and insurance - PITI, for short. The monthly payment is calculated based on the loan amount, the interest rate, the term of the loan, the costs of any insurance, and taxes. You can get an idea of what your payment will be by utilizing mortgage calculators available on Team Bralish's web sight. www.TeamBralish.com , or ask your agent for an assist here.

Closing costs: Purchasing a home involves a number of other parties and services. For example, the lender may require a survey and an appraisal to be completed. The title company will hire an attorney to prepare the conveyance document. You may want to have an inspection completed. You can expect fees for such services as appraisal, survey, inspections, hazard insurance, loan origination (lender's administrative costs), credit report, document preparation, title search and insurance, recording fees, notary, attorney and escrow.

You'll pay for some fees and the seller will pay for others. The costs will vary depending on each transaction. Most lenders will provide you with a good faith estimate of such costs. Your agent should also help you estimate what those costs might be.

Points: An item at closing that is often confusing to first-time buyers is points. Points are an additional amount a lender charges up front for the loan. Points are interest collected in advance. One point equals 1 percent of the loan amount. Three points on a $70,000 loan amount, for example will be $2,100. By collecting points (interest) in advance, the lender actually increases his rate of return on the loan. For example, if market interest rates are at 8.5% for a 30-year loan with no points a lender might offer you an alternative loan at 8% if you pay some points.

Other costs: One additional consideration is the other costs associated with owning a home - namely, utilities and maintenance. These costs will depend on the home you choose, but it's a good idea to budget for them in advance.

Once a contract becomes binding, you probably will have to arrange for financing. Depending on the terms of the contract, the purchase of the home may be contingent on your being able to get financing at certain terms by a certain date.

Lenders: Your Team Bralish agent may provide you a list of lenders.

Most home buyers get loans through savings institutions and mortgage bankers, commercial banks, credit unions, or other private sources. In some cases, the seller may be willing to offer financing. Sellers often can offer a loan to a buyer at a competitive interest rate and attractive terms. Check on specifics.

Types of loans: I general, three broad categories of loans are available:

Private versus government loans: Most mortgage loans are made by savings institutions, banks and mortgage companies. On government (FHA and VA) loans, the government does not actually loan the money but rather guarantees (or insures) to repay the lender if you default for some reason. Generally, a lender will require you to buy mortgage insurance, particularly if you make a low down payment. This insurance may be paid at closing or added to the loan amount. VA loans require no mortgage insurance, but only qualified veterans may apply for them. Mortgage insurance protects the lender, to a degree, in the event of default.
Government loans have important advantages: They generally require a lower down payment than conventional loans and often have a lower interest rate or points. One the down side, government loans limit the amount you can borrow, often take longer to process, and sometimes have higher closing costs.

Fixed rate versus adjustable rate: On a fixed rate mortgage, the interest rate stays the same over the life of the loan, usually 15 or 30 years. That means your payment will not change except for adjustments for taxes and insurance.
Adjustable rate mortgages go by a variety of names, but basically these loans have interest rates or monthly payments that can go up or down over time. These mortgages typically start out with a lower interest rate, lower monthly payments, and lower fees and points than fixed rate mortgages. They often appeal to first-time home buyers, younger couples who expect their incomes to grow in the coming years, and people who might not have much cash for down payment and closing costs.
If you consider an adjustable rate mortgage, ask the lender to explain the terms fully. Ask about the interest rate cap; the maximum rate you will be charged no matter how high rates go in the market. Don't confuse rate cap with payment cap. When the payment is not enough to cover interest, the excess interest is added to your principal balance, so your debt increases instead of decreases. Also ask about the index that will be used to calculate future interest rates and how index charges will affect your mortgage.

Assumable versus new loans: Some loans, particularly FHA and VA loans as well as some adjustable rate mortgages, are assumable. That means a buyer can assume an existing loan usually on the same terms as the previous owner.
Assuming a loan may save some costs and time. As the buyer, you may pay the lender a fee at closing for processing the assumption.

The true price of financing: When shopping for a loan, don't judge the loan by the interest rate alone. Compare several items in the entire loan package, including:

— Points on a low-interest-rate loan can be double those for a loan with a higher interest rate, causing you to pay more up front and in cash.
— Total fees charged by the lender. Some lenders will absorb the cost of many services, while other do not, so ask in advance.
— Term. In general, the longer the life of the loan and the more fixed the payment, the more you can expect to pay over the life of the loan. For example, a 30-year, fixed-rate loan will cost more in interest than a 15-year, fixed-rate loan.
— Penalties. Ask what penalties will be charged if you pay off the note early. A prepayment clause could require you to pay a penalty if you pay off the loan early, such as refinancing the loan at a later time.

Loan approval process: When you apply for a loan, the lender will ask about your finances. You will already have most of the facts and figures in the financial information you compiled earlier. The process can take several weeks.

From the lender's viewpoint, approving the loan is only part of the risk; the other part is the property itself. The lender may require an appraisal to verify that the home is worth the loan as well as a physical survey to discover any encroachments on the property. Repairs may be required. Insurance must be purchased. Verifications of employment, deposits, and other matters must be obtained. Loan documentation and conveyances instruments must be drawn and approved. In addition, the title company must research the title and arrange for paying off any liens, taxes, and other costs. All these conditions and other conditions must be satisfied before a transaction can close.

Hazard insurance: As another protection, the lender may require insurance protecting the home against hazards such as fire and storms. (Flood insurance will most likely be required if the house is in the flood plain and would be a separate policy.) Hazard insurance may be included in a homeowner's policy that covers other risks such as theft and liability. Even if not required by a lender, it is probably a good idea for you to seriously consider all types of insurance. Discuss these issues with your insurance agent.

Closing: The closing is the end of weeks or even months of research and decision making. The closing could last less than an hour but may take longer, depending on the complexity of the transaction. It often occurs at the title company's office. The title company officer will explain each document before you sign. You may your attorney present as well. Two basic kinds of documents to expect; if you're buying a home were a cash transaction, you would simply hand over the money and receive the deed. More than likely, however, you are borrowing money for the home, which means that you are actually making two transactions - acquiring the loan and buying the home:

— As a borrower, you will sign a note promising to repay the loan and a deed of trust (also known as the mortgage) pledging the house (or other collateral) as security for the note. You'll also sign numerous other papers including things such as acknowledgments, disclosures, surveys, certificates, etc. Be sure to read each document carefully.
— Ask questions if you do not understand anything. There are no dumb questions. Seriously consider having your attorney present at closing.
— As a home buyer, you will present a cashier's check (or other good funds) to the seller, sign a document that itemizes closing costs (the lender will have given you an estimate in advance), and pay your share of the closing costs. In return, you will receive a deed, transferring ownership rights to you.

The home is yours: At the end of the meeting, you will likely receive keys to the property. At that moment, the home will be yours. Occasionally, possession of the property will occur after closing. For example, the seller may have negotiated with you for a few extra days after closing, or the loan will not immediately fund, or other concerns. But, in most transactions, you will be the new owner at the end of closing.

Some other points to keep in mind:

— Buyer/Seller Agency: It's important to understand who your agent represents - buyer or seller. Your agent will provide you with information about representation. As a buyer you may sign a buyer representation agreement with your agent. It will discuss the scope of the agent's representation.
— Prepaids: You should be aware that your closing costs will include prepayment of an escrow account to cover insurance and taxes. Agents are required to make properties available without regard to race, color, religion, national origin, sex, disability or familial status.
— Be sure to have a property inspected by licensed inspectors to determine:

The condition of the property (structural, mechanical, electrical items, etc.);

Any environmental conditions (asbestos, lead-based paint, toxic materials, etc.);

And other matters. Brokers are not qualified to perform such inspections.

Residential Service Contracts: They're available for purchase. In such contracts the residential service company agrees to, subject to the terms of the contract, repair the appliances, electrical, plumbing, heating, cooling or other systems in the property. Be sure to obtain a policy of title insurance or have an abstract of title reviewed by an attorney of your choice before buying a property. Seek the advice of an attorney of your own choice before entering into a binding agreement.

HOME BUYING, DECIDING WHAT YOU NEED AND WANT!

Team Bralish's home Buying Services!

BUYERS REMORSE!