Buying a Home

Buying a home is probably the biggest investment you will make, with long-term financial ramifications.  It calls for many informed decisions and for good advice from a real estate professional.  When buying a home, you can learn from the knowledge and skills that Wendy, Your Real Estate Professional has to offer.

 

  Qualifying First time home buyers Tax Credit Information

 

The Home Buying Process:
If you are a first-time homebuyer or haven’t bought a home in a while, this guide will offer valuable information about buying a home.

American Home Shield - Buyer's Guide to Home Buying - Read it now

Realtor Fees:
The Seller typically pays all Realtor related fees in Michigan. Buyer respresentation is normally a free service to you and is the seller's responsibility! 

Familiarize yourself with the Real Estate forms:

A.  Agency Relations Explanation of

B.  Buyer’s Agreement  Allowing representation

C.  Purchase Agreement

 

Submitting an offer:  The Required Items (Package containing Real Estate forms A, B & C from above + items below)

1.   Approval Letter or Pre-Approval Letter or Pre-Qualification Letter

·     A pre-qualification letter is sufficient for submission on a foreclosed property sale only.

·     A pre-approval letter is a minimum requirement for submission on a short sale or traditional sale and is also good for a foreclosure sale.

·     An Approval Letter is the best and will suffice for all the above.

2.   The Earnest Money Deposit (EMD)

 

Information needed to complete the purchase agreement:

·        Mortgage Type

·        Mortgage Amount

·        Mortgage Length

·        Mortgage Down Payment

·        Anticipated closing date (The length of time it will take your lender close on your particular loan type)

 

99% of the transaction process must be done in an orderly and timely fashion.  Wendy knows and understands the buying process well enough to professionally guide you from the very beginning through and beyond the closing of all types of modern day transactions.
 
 

Gather the Information you will need to qualify for a home mortgage:
Before you can buy a home, you will need to secure financing.  Be ready to provide a mortgage lender with the following information.
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·       Last 2 Years W2 Forms

·       Self Employment – 2 Years Tax Returns & Current P & L

·        Last 30 Day Pay Stubs

·       Any Mortgage Statements

·       2 months Checking/Savings Statement (All Pages)

·       Latest 401 K, IRA or Retirement Statement (All Pages)

·       Divorce Decree

·       Child Support / Child Care

·       Lease Agreement

 

Down Payment for lending is totally different the the EMD for the offer package:
Your lender should be versed with the three main type of funding programs: Conventional, FHA, RD & VA and will work with you to determine what one will be the best for you.  They will ask how much money you have available for a down payment.  A down payment of 20 percent or more of the home purchase price demonstrates your commitment to long-term homeownership and provides you with immediate equity in a new home.  However, there are various programs that are requiring as little as $0 downpayment, such as the Rural Development Loan.  

Credit History:

Your lender will review your credit history — how well you’ve paid your bills in the past — by reviewing your credit report. The lender will consider how much you owe on credit cards, car payments, student loans and other debt. The lender will also review your ability to pay property taxes and other expenses of homeownership.

 

Escrow Accounts:

Your lender may suggest that you set up an escrow account. With an escrow account, you pay a fixed amount each month in addition to your mortgage payment to an account maintained by the lender. The lender then draws on that account to pay property taxes and homeowners insurance as those bills become due. Escrow accounts ensure that money will be available for these payments.

The lender you choose will review your financial information and explain the preapproval process. While preapproval is not a mortgage commitment or guarantee, it will provide guidance on what you can afford to spend on your new home. Having a preapproval letter to show to a seller demonstrates that you are a serious buyer. When you are ready to buy, it will shorten the time it takes your lender to complete the mortgage application process.

 

Make sure your lender explains all loan fees — the up-front costs of originating, processing and closing the loan.

 

Closing Costs:  Over and above the price of the property  

·       The down payment

·       Loan fees (points, application fee, credit report)

·       Prepaid interest

·       Inspection fees

·       Appraisal

·       Mortgage insurance

·       Hazard insurance

·       Title insurance

·       Lender escrow amounts (Prop. Taxes & Homeowners Insurance)

·       Documentary stamps on the note

·       Title Company Charges for Closing and Recording Documents

 

Example:  Fannie Mae and partner HomePath Financing are allowing 3.5% seller concessions to be used towards closing costs or new appliances.  Read Full Article

 

  

Understanding Property Tax:

Each Village, City and Township has their own property tax. 

 

These Property Taxes are based on the local millage rate. 

 

The millage rate is the rate that is charged to the homeowner for some of the following local expenses:

Library

Fire

Policy

Schools            Colleges            Local

Misc. ???

 

The millage rate is multiplied by the properties taxable value then divided by one thousand to give us the Annual Rate.

 

Example:  A condo in Walled Lake, MI that is on the market for $120,000.00 with a taxable value of $70,000.00.  Walled Lake’s millage rate is 40.6608.   Taxable value x Millage Rate / 1,000 = Annual Property Tax

 

$70,000.00 x 40.6608 / 1,000.00 = $2,846.26 would be your annual taxes that must be paid.

 

It all comes down to a couple components.

1.                Property Taxable Value

2.                Township / City / Village / School District

 

Here is a link to assist with calculating what the property tax would be on a particular property.

https://treas-secure.state.mi.us/ptestimator/PTEstimator.asp

 

As a service to the homeowner and a protection to the lender, most property taxes are escrowed with the lender and added onto your monthly payment to that lender.  Your lender then pays your property taxes from the escrowed account for you as they are due.  All this shows on your year end statement from the lender as well as you statements from your local municipality.

 

Property Taxes are due to the municipalities on a semi-annual basis of Summer and Winter.

The summer bill is the larger of the two payments because this is when the municipalities collect for the schools.

 

What is a Home Warranty Plan?

You may opt to purchase a home warranty plan for protection on unforseen defects.
AHS Home Warranty

 

 

Select Your New Home:

With your mortgage preapproval in place, you are ready to begin your search. Wendy can help you find a home that meets your needs, your budget and within your loan type guidelines.  She can assist in determining if a particular home of interest will qualify for the spefic type of financing you are obtaining.  Wendy has access to the Multiple Listings Service (MLS) which generally offers the most comprehensive list of homes for sale.  

 

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New Federal Housing Administration condo-loan guidelines that took effect Dec. 8, 2009 could make it much easier for condo buyers to get a loan.

Under previous guidelines, half the units in a new condo development had to be sold before the FHA would underwrite a mortgage in the complex. New guidelines cut the requirement to 30 percent and raise the ceiling on FHA loans in a development to 50 percent from 30 percent.

The new rules also allow condo associations to turn down an accepted offer if they agree that it's too low-unless they will be violating the Fair Housing Act. This is expected to motivate many associations to seek FHA-approved status for their buildings.

Even if they solve the vacancy problem, FHA loans can be a tough sell in some buildings, says Miami-area practitioner Madeleine Romanello, an associate with Douglas Elliman Florida.

"An FHA loan still has the connotation of being low-income. Condo boards say, 'No, we don't do FHA.' They don't understand that the FHA is the only game in town. We could be moving tons of condos if we could get their buildings FHA-approved," Romanello says.    Source:  LCAR

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What can Wendy Valko as your Realtor® do to help you buy the home that is right for you?

• Wendy Valko will help you determine how much home you can actually afford. Often, she can suggest additional ways to accrue the down payment and explain alternative financing methods. She can also introduce you to a mortgage counselor and arrange to have you "pre-approved" which can improve your negotiating position and enable you to achieve your home-buying objectives faster and with less stress.
• Providing client level services, Wendy works for you as a buyer's agent and help negotiate the best price and terms for you. Or, she can serve as a seller's sub-agent (or disclosed dual agent), acting as a liaison between you and the seller to present offers and counteroffers until an agreement is reached.   Agency Relations Form  She will help you work out a realistic idea of the home best suited to your needs - size, style, features, location, accessibility to schools, transportation, shopping, and other personal preferences.  
• She has access to a listing of all available homes in the multi-list system, can evaluate them in terms of your needs and affordability, and will not waste your time showing you unsuitable homes.     Search for homes now  She can often suggest simple, imaginative changes that could make a home more suitable for you and improve its utility and value.
• She can and will supply information on real estate values, taxes, utility costs, municipal services and facilities, and may be aware of proposed zoning changes that could affect your decision to buy.
• Although the law does not normally require an attorney to review documents or oversee real estate closings, Wendy can provide you with a list of law practitioners to choose from if you would like to use the services of an attorney.
• Familiarize you with the closing process and will obtain closing figures in advance of closing for your review.

·    Provide you with a list of qualified home inspectors, pest inspectors, surveyors, and help to coordinate inspection