This isn’t going to be another “10-things to know” article, and I plan to continue to work on it from day to day so you may see some additions from the last time you were here. Essentially, the market changes, you change, and, I need to keep changing.
I can remember sitting down with clients like Cheryl and Curt when they wanted to buy a place and move out of their apartment. Their questions were about expenses, making offers, mortgages, home inspections, and not over paying for a house in a bidding war. Curt was convinced he needed to save for a larger down payment and Cheryl knew that they should live in Arlington.
When we discussed their thoughts I was able to give them insights into the market and process, and review a handy Estimate Worksheet to show them typical costs and monthly payments at the desired price. Our talk set in motion a series of decisions that helped them buy a great house in Vienna well within their budget.
My objective here is to start out with some of that advice and expand on it with additional pages or helpful examples.
Your first step:
This is only for anyone planning on getting a mortgage because anyone paying cash needs to skip down to number 9.
Mortgages are now under tighter controls thanks to the Consumer Protection Credit Bureau (CPCB.gov) and new government guidelines. Your ability to qualify, yes, to pay your bills is now in the spotlight.
- Review a “tri-merge” mortgage credit report
Your mortgage lender is the only one who will be able to accurately help you navigate this task. The reason is that they will crunch your data using an extra step giving you a mortgage credit score that your rate will be determined from.
It is important to start this process today because changes or improvements take time to “season”
Your second step:
Know your numbers. All aspects of this transaction involve a cost and it is best to have a grasp before you start out to find a home.
Cash buyers don’t need to worry about new mortgage expenses which can be significant. These should be disclosed up front by your lender based upon the size of your loan and program you have selected.
Those mortgage costs may include an application fee, credit report, tax service fee, underwriting fee or a flood certification fee.
All home buyers pay fees to the Clerk of the Court when the Deed is recorded.
We use Settlement Companies here in Virginia, and there are fees from them too such as Title Insurance, preparation of the Deed, a Title Binder and routine settlement fee.
In 2014, lenders stopped requiring homeowners to have surveys done to cut costs. These only cost about $350, so I recommend asking the Settlement Company to order one for your files just in case you want to build a fence or know where your property really ends.
What has always made sense to me is to sit down with clients, at the first meeting, and review these numbers using an Estimate Worksheet. Understanding the numbers based on the price range, down payment and price range is going to help you build a budget or at least know how much this whole home buying project is going to cost you.
Buying New Homes
There is a wide variety of new homes so this topic will be expanded.