Tag Archives: home buying

Be Prepared to Buy With These 5 Simple Suggestions

Putting an offer on a new place is possibly the most exciting or excruciating part of buying a home– second to getting the keys. But buyers beware, eagerly rushing towards the finish line can leave you stressed and disappointed. Start putting proper principles in place today, to ensure you can own a home in 1-2 years.

1) Start saving. Having money in the bank makes you look great to lenders and when it comes time to make a down payment, you wont feel the pinch. Additionally, experts suggest having three to six months worth of living expense saved before you buy.

2) Get your credit score. Your credit score can seriously impact your ability to get a loan and interest rates. Clear up inaccuracies on your credit report even if it means meeting with a credit repair specialist.  Review the last 5 years and follow up on any inaccuracies. You’d be surprised how many large companies make mistakes.

3) Calculate your home budget. Create a layout of your monthly expenses at a standard of living you can sustain. Experts suggest spending no more than 36 percent of your monthly income on mortgage payments, which could shrink your price range.

4) Find a lender. A lender is your ally in home buying. They can help you understand how much of a home loan your will really qualify for and what kind of mortgage is right for you. Lenders can also help you get preapproved, solidifying your price range and potentially locking in an interest rate.

5) Look w/out the pressure to buy. Looking at potential homes can be motivating and fun but most importantly educational. Make it a productive exercise by noting what you like and don’t like. Visit homes within your price range to build a realistic checklist your wants and needs. Narrow down what you’re looking for by balancing the two elements – What you need now, and What you’ll need long term. 

Finding and financing the home of your dreams will be easier than ever after implementing the five steps we just discussed. If you are further along in the home buying process, check out the current market conditions in Park City and Salt Lake City. View our properties in Park City or Salt Lake City or contact an agent specialized in the neighborhood you are interested in.

Nine Mortgage Terms You Must Know

Purchasing a home comes with a varying set of stressors, for both the first time home buyer to even the vetted real estate shopper. An always perplexing component to buying a home is the terminology that comes with it; however, becoming familiar with said terminology puts the home buyer in a position to best negotiate their way through the home buying process, and ensures the best possible home loan and long term financial outcome.

Adjustable Rate Mortgage (ARM): an Adjustable Rate Mortgage indicates that the interest rate you are paying on a home can vary depending on the treasury bill rates; these can be low or high depending on current economic standings. ARMs can be beneficial in the short term, however if you are looking for stable and long term lending, fixed rate mortgages could be a better option.

Annual Percentage Rate (APR): the Annual Percentage Rate is the annual rate that is charged when you take out a loan to purchase a home. APR is also dependent on your credit history and score. Ensure your credit score is in tip-top shape before buying a home by utilizing multiple credit score reports to make sure you receive the best APR possible. Giving yourself adequate time to fix any errors on your credit report before applying for a loan will also secure a better loan option.

Closing Costs: as implied by the name, closing costs are the fees and charges paid at closing of the purchasing of a new home. Common closing costs include credit reports, survey fees, various processing fees, pre-paid interest, etc. In the current market, closing costs can likely be negotiated down; talk to your realtor to see what your options are.

Escrow: an escrow is a contractual arrangement in which a third party, typically a mortgage company, is in charge of payments and documents by those involved with the home buying transactions.

Fixed Rate Mortgage (FRM): a Fixed Rate Mortgage is a mortgage loan in which the interest rate on the loan remains the same throughout the entirety of the home owning process. However, with the interest rate remaining the same, the length of the loan is typically longer on FRMs.

Good Faith Estimate (GFE): legally required to be prepared by the mortgage lender involved with the loan, as required by the Real Estate Settlement Procedures Act, a Good Faith Estimate is a list of every cost affiliated with the loan you are pursuing.

Lock-In: a lock-in guarantees that, for a specific amount of time (generally 30-60 days), the borrower is promised a certain interest rate on a loan by the mortgage lender.

Private Mortgage Insurance (PMI): if your down payment is less than 20 percent of the sale price of the home, banks will require the home buyer to have Private Mortgage Insurance. PMI protects the bank if the buyer fails to make payments.

Title Insurance: Title Insurance is used to protect both the lender and the home buyer if there is a property ownership dispute, and is required by most lenders. Title Insurance is seen almost exclusively in the United States, because the majority of the U.S. does not have a land registration system in place.

When buying a home, having knowledge of the world of real estate is critical to looking out for your best interest financially. Familiarity with terminology, as well as research throughout the home buying process, positions you to be well versed in the necessary language that comes with buying a home.

The job of a professional real estate agent is to help and improve your overall home buying experience. Contact Summit Sotheby’s International Realty today for answers to any of your real estate questions!

6 Must Know Tips for Homebuyers

Home buyers

Whether it’s your first or your fourth time buying a home, the key to having an experience that’s delightful, not daunting, takes one thing—confidence. Here are 6 tips to keep you feeling poised and prepared as you navigate the home buying process.

1) Know what type of mortgage is best for you.

If you plan on selling within 3-7 years, an adjustable rate mortgage (ARM) is a good option. However, if you plan on staying long-term get a fixed rate mortgage and opt in to additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate.

2) Go a step further than prequalification—get preapproved.

Preapproval will give you an idea of your price range and an opportunity to lock in an interest rate. Most importantly, when the time comes to make an offer, you look serious to sellers. However, what you’re approved for is rarely the price to buy at, that’s why you have to…

3) Know what you can afford.

When coming up with your price range, get estimates of what you can expect to pay for homeowners insurance, taxes, utilities and closing costs. Make sure to factor in your desired standard of living and be realistic about the percentage of income you can you can commit to monthly payments. Fannie Mae recommends buyers spend no more than 28% of their income on housing costs. Once you come up with your ideal price range its time for the fun part—the search.

4) Create a checklist of your needs and wants.

Fine-tune this checklist to give special priority to things that will maintain value over time like school districts, commute time, and the neighborhood. Underneath dead grass and dirty carpet a home could have exactly what you’re looking for.

5) Negotiate.

Be aware that with many incentives for first time homebuyers you may have to compete for the home you want. A good offer takes into account how long the home has been on the market and comparable homes for sale in the area. Aim to make your first offer a bit lower than what you think is a realistic price. Negotiations on price are a good time to solidify contingencies on financing and inspection—our last tip.

6) Know what you are buying.

Always get your potential home inspected in a time frame that allows you to back out or renegotiate if there is a major problem. Some home buyers may even want to arrange for a walk through after the owners have moved out that allows them to negotiate payment for repairs that may have been hidden or occurred during the seller’s move.

These tips are key to feeling confident in your investment and making your home buying experience painless and profitable.