I don’t expect you to become an expert in Real Estate, that is my job, but as a home buyer, you’re getting ready to make a big purchase and the better informed you are, the better decisions you will be able to make. During the purchase of a house, you will be dealing with lenders, real estate agents, home inspectors, appraisers, title companies and more. There is a good chance that at some point you don’t understand the language they use. Use this guide and if you have questions, shoot me an email at mariel@yestampa.com. I will gladly help you answer your questions or help you find an answer.
Mortgage Points
Mortgage points are fees a buyer pays a mortgage lender to trim the interest rate on the loan. This is sometimes called “buying down the rate.” Each point the borrower buys costs 1 percent of the mortgage amount. So, one point on a $300,000 mortgage would cost $3,000.
Prequalification vs Preapproval.
This is the most important part before you start your home buying journey. It’s important that you are honest in letting your lender know your debts, payment and income during a prequalification process. That way you have an accurate idea of what is your buying power.
- Prequalification – (they don’t look at your credit) When you prequalify for a home loan, you’re getting an estimate of what you might be able to borrow, based on information you provide about your finances, as well as a credit check. Prequalification is also an opportunity to learn about different mortgage options and work with your lender to identify the right fit for your needs and goals.
- Pre Approval – (deeper investigation, they look at your credit) Pre Approval is as close as you can get to confirming your creditworthiness without having a purchase contract in place. You will complete a mortgage application and the lender will verify the information you provide. They’ll also perform a credit check. If you’re pre approved, you’ll receive a preapproval letter, which is an offer (but not a commitment) to lend you a specific amount, good for 90 days.
Home inspection
https://www.homeinspector.org/Buyers-And-Owners/Homebuyers-Guide/FAQs-about-Home-Inspection
A home inspection is an objective visual examination of the physical structure and systems of a house, from the roof to the foundation. On average, a single-family home inspection usually takes 2-4 hours to complete, though this is heavily dependent on the size and condition of the home. After the inspection process, the inspector will send the client an inspection report (often within 24-48 hours) that covers their findings, complete with pictures, analysis and recommendations.
Why do homebuyers need a home inspection?
https://www.nar.realtor/appraisal-valuation
Buying a home could be the largest single investment the homebuyer will ever make. To minimize unpleasant surprises and unexpected difficulties, homebuyers should strive to learn as much as they can about the house before they buy it. A home inspection may identify the need for major repairs or builder oversights, as well as the need for maintenance to keep it in good shape. Through the home inspection process, homebuyers will have a better understanding about their prospective house, which will allow them to make decisions with confidence. If a homeowner is planning to sell their home, a home inspection can give them the opportunity to make repairs that will put the house in better selling condition.
An appraisal is an opinion of value used for real-estate-related financial transactions. Appraisals are required by a state licensed or certified appraiser for most transactions above $250,000. An appraiser’s report will typically include the type of property inspection, approaches to value required, and any lender-specific requirements…
An appraisal is an important part of the home buying process because it assures the lender the property has adequate collateral to make the loan. NAR closely monitors federal legislative and regulatory issues related to appraisals. NAR has long advocated for an independent appraisal process and enhanced education requirements that allow appraisers to produce the most credible appraisal reports possible.
Home Warranty
Definition by: https://shopping.ahs.com/plans
When you own a house you never know when things are going to break. A home warranty is an annual service contract that covers the cost to repair or replace parts of home appliances and systems that break down over time.