HomeBuyerAdvantageProgram WELCOME TO THE
Since1998,I'vebeendedicatedtohelpingbuyersdiscovertheiridealhomes andnegotiatethebestpossibleprices.WithanexperiencedBuyer’sAgent byyourside,navigatingthecomplexitiesofthehomebuyingprocess becomesseamlessandrewarding.
AtAskCathyMarketingGroup,ourteamofexperiencedagentsare committedtoguidingyouthrougheveryfacetofthemarket,from understandinginterestratestoselectingtheperfectneighborhoodfor youandmasteringmultipleoffersituations.
OurHomeBuyerAdvantageprogramis designedtopositionyouforsuccess,ensuring youfindtherighthomeatthebestprice. We'vecraftedthisguidetoempoweryouwith knowledgeandinsights,makingyourhome buyingjourneyassmoothandenjoyableas possible.
I’mexcitedtobeonthisjourneywithyou!
Aboutus
MEET THE
Team
CATHY COUNTI
PRESIDENT,BROKER
816-365-2225 cathy@askcathycom
MIKE HODGES
SENIORREALTOR
816-352-3651
mike@askcathycom
RACQUEL FLORA
SENIORREALTOR
816-309-1303 racquel@askcathycom
ALLISON LACKEY
SENIORREALTOR
816-651-9799
allison@askcathycom
ALICIA HODGES
DIRECTOROFOPS,REALTOR
816-516-8540 alicia@askcathycom
SARAH COX
LISTINGMANAGER,REALTOR
816-651-2681 listingsmanager@askcathycom
REBECCA KINCHELOE
DIRECTOROFHOMEFINDER,REALTOR
816-516-6574 rebecca@askcathycom
SENIORREALTOR PAM BARDY
816-559-1746 pam@askcathy.com
SHELLY RAMPETSREITER
SENIORREALTOR
816-582-8723 shelly@askcathycom
VICTORIA HARVEY
SENIORREALTOR
816-616-6078
victoriaharvey@askcathy.com
DARLENE PETERSON
SENIORREALTOR
816-694-1648 darlene@askcathycom
ANGIE GONZALEZ
SENIORREALTOR
816-215-7956 angie@askcathycom
SARAH VALENTINE DIRECTOROFSOCIALMEDIA
312-852-7355 svalentine@askcathycom
KELLEY MORGAN
CLOSINGMANAGER,REALTOR
816-877-2177 kelley@askcathycom
HOME BUYER Advantage
HOME BUYER Advantage
THE BEST HOME & BEST PRICE
Inthismarket,ittakesaproactiveand aggressiveapproachtofindyouthebesthome atthebestprice.And,thatisexactlywhatthe HomeBuyerAdvantageProgramwilldoforyou. Unlikeaseller’sagent,weactasyourfiduciary duringthebuyingprocess Wegiveyou undividedloyaltytoensureyour
HOME FINDER ADVANTAGE
Everybuyerhasaccesstothehomesforsalein theMultipleListingService(MLS)throughvarious freewebsiteslikeZilloworRealtorcom,butthese websitesareoftenoutdatedorincorrect.We haveourownwebsitethatisdirectlylinkedtothe MLSandcangiveyouup-to-dateinformationon everylistinginyourarea.Wegoaboveand beyondjustconsultingtheMLShowever,wewill findyouoff-marketor“pocket”listings.
DATABASE
Wehavealargedatabaseofpastclientsthat arewillingtoselltheirhomestoourbuyers
needsandpreferencesaretoppriority.Weofferspecialized knowledgeofthelocalrealestatemarket,frompricing trendstoneighborhooddynamics. Thisinsightis invaluableformakingeducateddecisionsandspotting hiddengems.Welookbeyondthesurfacetoadviseyouon potentialpitfallsorrepairs,aswellasfutureresalevalue Beingskillednegotiators,wehelpyouwinontermsand conditionsaswellasprice,eveninmultipleoffersituations Fromarrangingviewingstocoordinatinginspectionsand navigatingclosingprocedures,wehandleallthelogistics makingbuyingtoclosingasmoothjourney
NEIGHBORHOOD PROSPECTING
Similartodoorknocking,onceyouidentifytheareayou wanttolivein,wecallandmailthoseneighborhoodsto identifypotentialsellerswhoarenotyetonthemarket findingyouahomewithnoothercompetitivebuyers.
EXPIRED, CANCELLED & FSBO
WefindFSBO’sthatmatchyourcriteriaaswell ascontactinghomeownerswhotriedtoselltheir homespreviously Thesehomeownersoftenstill wanttomoveandwelcomeasalewithoutthe hassleoflistingtheirhome
WHY HIRE Us?
HOME FINDER ADVANTAGE
Wefindoffmarketpropertiessoyoudon’t havetocompetewithotherbuyers!This savesyou$10,000to$30,000
TOUGH NEGOTIATORS
Westudynegotiationtactics.Weknow HOWtogetyouthetermsyouwant.
WE’LL WIN!
WeknowhowtoWINinmultipleoffer situations-Experienceandstrategy getyouwhatyouwant.
REPAIRS NEGOTIATIONS
Wehavelotsofexperienceandcan identifyissuesbeforetheyarisesavin youthousands.
Buyingahomeisoneofyourlargestinvestments,whychanceitalone? Wemorethanpayforourselveswithourexpertiseandknowledge.
THEProcess
01 IS BUYING RightforYou?
QUESTIONS TO CONSIDER
Buyingahomeisanimportantdecision. Therearemanythingstoconsiderbefore youstartthehomebuyingjourney...
THE PRO’S OF HOME OWNERSHIP
Buyingahomeisoneofbestwaystobuild wealth.Theaveragehomeownershas38 timesmorenetworththananaveragerenter.
Taxdeductionsofyourmortgageinterest
Stability-apredictablepercentageofyour incomegoingtowardhousingcosts
Freedom-It’syourhome,dowhatyouplease!
Howlongdoyouwanttostayinthishome? Areyoumakinganybiglifechangesinthenear future?
Doyoufeelabletocommittoamortgage paymenteverymonth-nomatterwhat? Isyourcurrentjobstable?
Areyoureadytotakeonthefinancialand emotionalresponsibilityofhomemaintenance?
THE CON’S
Surpriserepairsandmaintenancearethemost difficultpartsofhomeownership.Havingan adequateamountofsavingsisveryimportant. Werecommendhavingaminimumof1months worthofexpensessavedpriortobuying.Most financialplannersrecommendhaving6months worthofexpensessavedforemergencies.
LackofFlexibility-Ifyouwanttomove,youmust planaheadbecauseitnormallytakes60to90 daystolistandclosethesaleofahome.
02CHOOSING YOUR Buyer’sAgent
GETTING YOU IN THE DOOR
Findingtherightbuyersagentiscrucialto ensuringasmoothandsuccessfulhomebuyingexperience ChoosingaBuyers Agentisnotjustaboutopeningthedoors foryou
EXPERTISE & LOYALTY
Chooseanagentwithexperience,knowledge, andaprofessionaldemeanorwithadeep understandingofthelocalmarketandwhois abletoprovideyouwithpersonalizedguidance andsupporttailoredtoyouruniqueneedsand preferences
It'salsoimportanttofindanagentyoufeel comfortableworkingwithandwhois committedtoprovidingexceptionalcustomer service.
OUR COMMITMENT TO YOU
Youareourpriority. Wepromisetogive you ourbesteverystepoftheway...andafter closing. WewanttobeyourRealtorforlife.
YouwantaREALTOR®thatcommunicateswhatto expectclearlyandoften. Onewhoeducatesyou aboutfeaturesorneededrepairsateachproperty andadvisesyouonhowtonegotiatethebest salescontracttermsandprice
Onceundercontract,yourbuyersagentwill provideyouwithalistofexcellentcontractorsto conductyourinspections,helpyouobtainseveral insurancequotesandintroduceyoutovendors whocanmaketheneededrepairsorupgrades.
NEIGHBORHOOD EXPERT
Weareneighborhoodexperts,knowledgeable aboutthelocalcommunity,schools,amenities, andpropertyvalues.Weusethisexpertisetohelp ourclientsfindtherightneighborhoodfortheir lifestyleandinvestmentneeds,whileensuring theygetthebestpossiblevaluefortheirmoney. EveryagentontheAskCathyteamhashelped 100'soffamiliesbuyhomes. Wehavethe experienceyouneed.
03UNDERSTANDING YourCosts
WHAT IF YOU DO NOT CHOOSE A BUYER AGENT?
IfyouchoosenottohireaBuyer’sAgent,thenevery agentyoutalktorepresentstheseller.Theirjobisto getthesellerthehighestpriceandthebestterms. ThisiscalledbeingUnrepresented.Wedonot recommendthisbecausebuyingahomeisoneof thebiggestfinancialinvestmentsofyourlife,and youcan’taffordtomakeamistake
HOW MUCH DOES AGENCY COST AND HOW IS IT PAID?
Allcommissionsarenegotiableandarepaidonlyatclosing DuringyourBuyerStrategyConsultation,we willdeterminetheamountoftimeandworkneededtoaccomplishyourgoalusingtheHomeBuyer AdvantageandHomeFinderAdvantageprograms Thenwewillagreeonafee Onceagreed,youwillhire usasyourfiduciarybysigningtheExclusiveBuyer’sAgencyAgreement OftenthesellerwillofferBuyer CooperativeCompensation(BCC) Wewilltellyouhowmuchitisbeforeeachshowing Ifthesellerdoes notofferaBCC,thenwecannegotiatethefeeintoyoursalesprice,orsellerpaidclosingcosts,oryoucan choosetopayitatclosing TheExclusiveBuyer’sAgencyAgreementallowsustonegotiateourfeewiththe selleronyourbehalf Wewillalwaysprovideanestimateofyourloancostsandclosingcostspriorto writinganoffersoyouareincontrolofyourfees
OTHER FEES: EARNEST MONEY
Typically1%to3%ofthesalesprice Itwillbe depositedatthetitlecompany3daysafter contractacceptance.
INSPECTIONS
DuringthenegotiatedInspectionPeriod,youwill doalldesiredinspections Eachonerangesin pricefrom$125to$1,000andarepaidforatthe timeofservice.Wewillgoovertheexpected costspriortowritingtheoffer.
DOWN PAYMENT
Thisamountwillbedeterminedbywhichloanyou chooseandisbroughttoclosinglesstheearnest moneygivenatcontractacceptance
APPRAISAL
Theappraisalisorderedafteracceptable completionofinspections.Thefee($450-$750)is paidtothelender.
CLOSING COSTS/PREPAIDS/BROKER ADMIN FEE
Thelenderwilldiscloseyourclosingcostsand prepaidstoyouonceapproved.TheBrokerAdmin Feewillbeincludedinthisestimate.Thesearedue onlyatclosingandcanbenegotiatedatcontract forthesellertopayallorsome
04Financing PREPARE
HOW MUCH HOUSE CAN YOU AFFORD?
Mortgagelendersrecommendyoudonot buyahomethatismorethan3to5times yourannualhouseholdincome.Ifyouare notpurchasingahomewithcash,youwill needamortgagepre-approvalprovidedby yourmortgagelender.Alenderwillwork withyoutogetaloanthatmeetsyour needs.Somebuyersareconcernedwith keepingtheirmonthlypaymentsaslowas possible,otherswanttomakesurethattheir monthlypaymentsneverincrease.
CHECK YOUR CREDIT
Amortgagerequiresagoodcreditscore Youcanimproveyourscoreby:
Payingdowncreditcardbalances
Continuingtomakepaymentsontime Avoidapplyingforanewcreditcardorcar loanuntilyouhavebeenapproved Avoidmakingbigpurchasesuntilyouhave beenapproved
Ifpossible,avoidjobchangesuntilyouhave beenapproved
SAVE CASH FOR A DOWN PAYMENT & OTHER EXPENSES
Inordertomakeyourdreamofbuyingahomeareality, youwillneedtosavecashforyourdownpayment,earnest money,closingcosts,buyeragent&homeinspections.
Wealsohighlyrecommendmakingamonthlybudgetand savingaminimumof1monthsworthoflivingcosts. Your budgetshouldalsoincludeanamountthatyousaveeach month.
Oftenthelenderwillapproveyouformorethanyour budgetwillallow Useyourbudgetamount!
Pre-approved GET
Beingpre-approved,unlikebeingprequalified,meansyou'veactuallybeen approvedbyalenderforaspecificloan amount.Youwillneedtoprovide documentedfinancialinformation(income, statements,assets,debt&creditreports etc)tobereviewed&verifiedbythelender
GETqualified QUALIFICATIONS Income
QUALIFYING INCOME
W-2Income/Salary
Incomefrompart-timejobs
IncomefromasecondJob
Overtime&Bonuses
Seasonaljobs
Self-employedIncome
Alimony&childsupport(Documentationrequired)
NON-QUALIFYING INCOME
Incomefromthelottery
Gambling
Unemploymentpay
Singlebonuses
Non-occupyingco-signerincome
Unverifiableincome
Incomefromrentalproperties
HOME SHOPPING Start
05 START Homeshopping
START TOURING HOMES IN YOUR PRICE RANGE
Timetostartshopping!Wewilltakenotesonallthehomes wevisit Itcanbehardtorememberallthedetailsofeach home,sotakepicturesorvideostohelpyouremember eachhome,andreviewthenotesyouhavewritten.Oncewe havefoundTHEhouseforyou,wewillpresentan appropriateofferbasedonrecentsalesandcurrentbuyer activityinthearea,aswellasthevalueofthepropertyinits currentcondition.Negotiationswilltakeplaceaftertheoffer ispresented.
TipWholeHouseStructural/Mechanical WE WILL MAKE SURE TO CHECK EVERY LITTLE DETAIL OF EACH HOUSE
WoodDestroyingInsects/RadonInspection
Sewer/Septic/Engineeringwhen needed
EVALUATE THE NEIGHBORHOOD AND SURROUNDING AREAS
Arethesurroundinghomeswellmaintained?
Howmuchtrafficisonthestreet?
Isitconvenientlylocatedtoschools, shopping,restaurants,&parks?
Make an
06 MAKE an offer
WHEN TO MAKE AN OFFER:
SoyouhavefoundTHEhouse!Congrats!Intoday’s marketwhenthedemandishigherthantheamount ofhomesavailableitisimportanttoactfast!
HOW MUCH TO OFFER:
Wewillsitdownandlookatrecentsalesandcurrent buyeractivityinthearea,aswellasthevalueofthe propertyinitspresentcondition.Puttingallthis informationtogether,wewilldeterminethepricethat youwouldliketooffer
SUBMITTING AN OFFER
Therearesomecomponentstoanofferthatmakesit moreappealingtothesellers.
PUT YOUR BEST FOOT FORWARD
Wewillworktogethertodiscoveroptions andcreateyourbestoffer.Dependingon thecircumstances,youmayhaveonly onechancetomakeagoodimpression
SHORTER INSPECTION PERIODS
Tryshorteningtheinspectionperiodto5-7days
OFFER TO CLOSE QUICKLY
Manysellersprefertoclosewithin30days.
MULTIPLE OFFER STRATEGY
Inthismarket,multipleoffersarecommon. UsinganEscalationClauseisasmart strategyandwewinoftenbyusingthistool
PUT DOWN A HEALTHY EARNEST DEPOSIT
Alargeearnestmoneydepositshowsthe selleryouareserious.
CASH TALKS
Atransactionthatisnotdependenton receivingloanapprovalismoreattractiveto aseller
LAYER IN AS IS OPTIONS
Thereareseveralwaystoenticethesellerto chooseyouroffer,andoneofthisistowritein anAsIsoption. Therearemanydifferent variations,andyourBuyersAgentcanadvise youonwhatwillbebestforeachsituation
SELLER MOTIVATION
Oneofthesmartestthingswecandoduring negotiationsistogivethesellerexactlywhat theywantforterms. Thiscanwinovera competingofferwithahigherpurchase price. Manyinexperiencedbuyersagents forgettoaskthisquestion
07WHAT HAPPENS AFTER YOU Submit the offer?
AFTER YOU SUBMIT AN OFFER
THE SELLER COULD
ACCEPT THE OFFER
DECLINE THE OFFER
Thishappensifthesellerthinksyouroffer isn’tcloseenoughtotheirexpectationsto furthernegotiate.
COUNTER OFFER
Acounter-offeriswhentheselleroffers youdifferentterms Ifthishappens,you can:
ACCEPT THE SELLER’S COUNTER OFFER
DECLINE THE SELLER’S COUNTER OFFER
COUNTER THE SELLER’S COUNTER-OFFER
Youcannegotiatebackandforthas manytimesasneededuntilyou reachanagreementorsomeone choosestowalkaway
Signthepurchaseagreementandyouarenowofficiallyundercontractandinescrow!
Thereareusuallyseveralcontingencyperiodswhileinescrow-theinspection, appraisal,andanyothercontingencywrittenintotheoffer
PERIOD Escrow
08 ORDER AN inspection
Duringtheinspectionperiod,wewillscheduleanASHI Certifiedandlicensedhomeinspectortodoathorough structural/mechanicalinspectionofthehome.
Atthistime,wewillalsoscheduleanyotherinspections deemednecessary,ietermite,septic,engineer,roof, etc
Oncethesearecomplete,theinspectorswillprovideus withdetailedreports Youcantaketheissuesas-isor requestthesellertoaddresssomeorallofthefindings TheitemswewillbeconcernedaboutaretheMajor Systemsbecausetheyhavethehighestrepairor replacementcosts HVAC,roof,electricalandplumbing
NEGOTIATERepairs
Issuestypicallyariseafterthehomeinspection,andthoseissuestend toresultinanotherroundofnegotiationsforcreditsorrepairs.
Askforcreditfortheworkthatneedstobedone Likely,thelastthingthesellerwantstodoisrepairwork.
Think“bigpicture”anddon’tsweatthesmallstuff.
Atilethatneedssomecaulkingoraleakyfaucetcaneasilybefixed Repairsare stillupfornegotiationandperhapsasmallcreditwouldhelpwithclosingcosts
Wewilladviseonthebeststrategyfornegotiatingrepairs.
09APPRAISAL ordered
Yourlenderwillarrangeforathirdpartyappraisertoprovidean independentestimateofthevalueofthehouseyouarebuying.The appraisalletsallpartiesinvolvedknowthatthepriceisfair.Theloanfilethen movesontothemortgageunderwriter.Ifapprovedyouwillreceiveyourfinal commitmentletterthatincludesthefinalloanterms&interestrate.
LOCK YOUR RATE
Workwithyourlendertodeterminethe besttimetolockyourrate. YouMUST specificallytellyourlendertolock, otherwiseyourratewillfloatwiththe marketuntilyoutellthemtolockit
You'llneedinsuranceforthenewhome beforeclosing.Thiswillprotectagainst thingslikefire,storms,andflooding.
TitleInsuranceensuresthatthesellertruly ownsthepropertyandthatallexisting liens,loansorjudgmentsaredisclosed
Scheduling
SCHEDULINGYour Move
MKelley organ
KelleyisyourpersonalClosingManager
Shewillworkwithyouto schedule inspections,closing,andcoordinating withyourlenderandthetitlecompany
KelleymakesmovingEASY!
AFTER SIGNING THE CONTRACT
FinalizeHomeMortgage
ScheduleHomeInspection
Declutter!Sortthrougheverydrawer, closet,cupboard&shelf,removingitems younolongerneedorlike.Donateorsell itemsthatareingoodcondition
Getcopiesoffinancialdocuments& medicalrecordsandstorethem
Createaninventoryofanything valuablethatyouplantotake
Getestimatesfrommovingcompanies
Callyourcloser,Kelley Getquotesforhome
Changeaddress:mailing, subscriptions,etc
Minimizegroceryshopping
Keeponpacking
Contactutilitycompanies (water,electric,cable)
Obtaincertifiedchecksfor closing
Packessentialsforafew nightsinnewhome
Confirmdeliverydatewith themovingcompany
Closing
10 CLOSING day
CLOSING DAY
Closingiswhenyousignownershipandinsurance paperworkandyoureceiveyournewhome’s keys!Typically,closingtakesfourtosixweeksfrom thedateyoumadetheoffer
FINAL WALKTHROUGH
ClosingDayandPossessionTimearenotalways thesame. BesuretoconsultyourBuyer’sAgentor Kelleyonthedayandtimeyoucanmovein.
CLOSING DISCLOSURE
Lendersarerequiredtohaveyousignaclosing disclosureatleastthreedaysbeforeclosing.This willshowyouwhatyourfinalloantermsand closingcostswillbe.Thisisdonetoensurethat therearenosurprisesattheclosingtable.Ifthere isasignificantdiscrepancybetweentheloan estimateandtheclosingdisclosure,wemust notifyyourlenderandtitlecompanyimmediately.
Wewilldoafinalwalkthroughthehomewithin24 hoursofclosingtochecktheproperty’scondition. Thisfinalinspectiontakeslessthananhour.Wewill makesureanyrepairworkthattheselleragreedto makehasbeendone.
WE WILL BE SURE TO:
Makesureallappliancesareworkingproperly Runthewaterinallthefaucets andcheckforanypossibleleaks Openandclosegaragedoorswithopener Flushtoilets
Runthegarbagedisposalandexhaustfans
CLOSING TABLE
WHO WILL BE THERE:
Youragent
Atitlecompanyrepresentative
Yourlendermayattendaswell
Theclosingtypicallyhappensatthetitlecompany. Youwillbesigninglotsofpaperworksogetyour writinghandwarmedup!Someofthepapersyouwill besigninginclude:thedeedoftrust,promissorynote, andotherdocuments
CLOSING COSTS
Closingcostscanvarydependingonyourhome’s purchasepriceandwhereyouarelocated.Youcan generallyexpectyourclosingcoststobearound3% to4%ofthehome’spurchaseprice.Theseclosing costscansometimesbesharedwiththeseller.
BRING TO CLOSING
Government-issuedphotoID
Proofoffundstocoverthe remainderofthecosts
TESTIMONIALS Client
ClientTestimonials
HARRY W.
hlyrecommendAskCathygroup Ihavebought old5propertieswiththemasarealestate or,andIcanhonestlysaythattheyhavethetop sintownbothforbuyerandseller Themost ssiveisthewholeteamwork.It'slikeawelloiled ine,andeachpersonontheteamarejustexperts attheydo.It'slikegettingthebestineachstepof ocess.”
E SMITH FAMILY
Sellingahousecanbeverystressful,especiallyifthe arethingsthatneedtakencareofbeforeit’ssold My agentsexpertise,connections,andcreativitymadeal thedifferenceintheworld AskCathyisagame changer,andthejourneywasasmoothone Thisfirst classagencybringsfirstclassresults”
CHRIS V.
“Werecentlysoldourparentshouse,theonlyonewe hadevergrownupin,andCathyandtheteamwere wonderfultodealwith.Caring,compassionate,honest, andresponsive.Notsurewhatmoreyoucouldaskforin arealestatecompanyandagent.Thankyouallfor helpingusthroughthisdifficultandemotionalsale!”
Glossary
REALESTATE TERMINOLOGY
TYPESOFMORTGAGE LOANS
LENDERDO’SANDDON’TS & MYTHS
DETAILEDTIMELINE OFTHEBUYINGPROCESS
R E A L E S T A T E Glossary
Acceptance: the date when both parties, seller and buyer, have agreed to and completed signing and/orinitialingthecontract.
Adjustable Rate Mortgage: a mortgage that permits the lender to adjust the mortgage’s interest rate periodically on the basis of changes in a specified index Interest rates may move up or down asmarketconditionschange
AmortizedLoan: aloanthatispaidinequalinstallmentsduringitsterm
Appraisal: an estimate of real estate value, usually issued to standards of FHA, VA and FHMA. Recentcomparablesalesintheneighborhoodarethemostimportantfactorindeterminingvalue.
Appreciation: an increase in the value of a property due to changes in market conditions or other causes.Theoppositeofdepreciation.
Assumable Mortgage: purchaser takes ownership to real estate encumbered by an existing mortgageandassumesresponsibilityastheguarantorfortheunpaidbalanceofthemortgage
BillofSale: documentusedtotransfertitle(ownership)ofPERSONALproperty
CloudonTitle: anyconditionthataffectsthecleartitletorealproperty.
Consideration: anything of value to induce another to enter into a contract, i.e., money, services, a promise.
Deed: a written instrument, which when properly executed and delivered, conveys title to real property
Discount Points: a loan fee charged by a lender of FHA, VA or conventional loans to increase the yieldontheinvestment.Onepoint=1%oftheloanamount.
Easement: therighttousethelandofanother.
Encumbrance: anything that burdens (limits) the title to property, such as a lien, easement, or restrictionofanykind
Equity: the value of real estate over and above the liens against it It is obtained by subtracting the totalliensfromthevalue
Escrow Payment: that portion of a mortgagor’s monthly payment held in trust by the lender to pay fortaxes,hazardinsuranceandotheritemsastheybecomedue.
FannieMae: nickname for Federal National Mortgage Association (FNMA), a tax-paying corporation created by congress to support the secondary mortgages insured by FHA or guaranteed by VA, as wellasconventionalloans
Federal Housing Administration (FHA): an agency of the US Department of Housing and Urban Development (HUD) Its main activity is the insuring of residential mortgage loans made by private lenders The FHA sets standards for construction and underwriting but does not lend money or plan orconstructhousing.
R E A L E S T A T E Glossary
FHA Insured Mortgage: a mortgage booked by Federal Housing Administration insurance and made by approvedlendersaccordingtoitsregulations
FixedRateMortgage:aloanthatfixestheinterestrateataprescribedrateforthedurationoftheloan
Foreclosure: procedure whereby property pledged as security for a debt is sold to pay the debt in the eventofdefault.
FreddieMac: nicknameforFederalHomeLoanMortgageCorporation(FHLMC),afederallycontrolledand operated corporation to support the secondary mortgage market It purchases and sells residential conventionalhomemortgages
Graduated Payment Mortgage: any loan where the borrower pays a portion of the interest due each monthduringthefirstfewyearsoftheloan Thepaymentincreasesgraduallyduringthefirstfewyearsto theamountnecessarytofullyamortizetheloanduringitslife.
LeasePurchaseAgreement:buyermakesadepositforthefuturepurchaseofapropertywiththerightto leasepropertyintheinterim.
LeasewithOption:acontractwhichgivesonetherighttoleasepropertyatacertainsumwiththeoption topurchaseatafuturedate
LoantoValueRatio(LTV): the ratio of the mortgage loan principal (amount borrowed) to the property’s appraised value (selling price) Example: on a $100,000 home, with a mortgage loan principal of $80,000, theloantovalueratiois80%.
Mortgage:alegaldocumentthatpledgesapropertytothelenderassecurityforpaymentofadebt.
Mortgage Insurance Premium (MIP): the amount paid by a mortgagor for mortgage insurance. This insuranceprotectstheinvestorfrompossiblelossintheeventofaborrower’sdefaultonaloan
Note:awrittenpromisetopayacertainamountofmoney
OriginationFee:afeepaidtoalenderforservicesprovidedwhengrantingaloan,usuallyapercentageof thefaceamountoftheloan.
PrivateMortgageInsurance(PMI):seeMortgageInsurancePremium.
SecondMortgage/SecondDeedofTrustIJuniorMortgage/JuniorLien: anadditionalloanimposedona propertywithafirstmortgage Generally,ahigherinterestrateandshortertermthanafirstmortgage
Settlement Statement (ALTA): a financial statement rendered to the buyer and seller at the time of transferofownershipgivinganaccountofallfundsreceivedorexpended
SeveraltyOwnership:ownershipbyonepersononly.Soleownership.
TenancyinCommon: ownership by two or more persons who hold an undivided interest without right of survivorship.(Intheeventofthedeathofoneowner,his/hersharewillpasstohis/herheirs.)
TitleInsurance: an insurance policy that protects the insured (buyer or lender) against loss arising from defectsinthetitle
TYPES OF mortgage loans
TYPES OF LOANS
WHO QUALIFIES
VA Department ofVeteran Affairs
USDA Departmentof Agriculture
Veterans Personnelwith honorable discharge
Reservists& NationalGuard
SurvivingSpouses
Someonewhois buyingahomeina USDA-designated ruralarea
FHA FederalHousing Administration
203K Federal Housing Administration
CONVENTIONAL97
Anyonewho meetsthe minimumcredit andincomelevels
Atleast35%of purchaseprice
2%oftheloan amount.Canbe rolledintoloan amount
SELECTSMART PLUS
Anyonewho planstopurchasea fixer-upperorneeds torenovatetheir homeandmeets credit&income requirements
Dependingonthe program,available firsttimehome buyers(abuyerwho hasn'townedinthe lastthreeyears)can put3%downwitha Conventional97 program
Anyonewhomeets lenderscredit, income&debtlevel requirements
Atleast35%of purchaseprice
175%ofloan amount
Variesfrom 3%-20%of purchaseprice
175%ofloan amount
Variesfrom 3%-20%, buttypically rangesfrom520%
DO’S AND DON’TS
DuringtheLoanProcess
Therearecertain"Do'sandDon'ts"whichmayaffecttheoutcomeofyourloanrequest Theseremainin effectbefore,during,andafterloanapprovalupuntilthetimeofsettlementwhenyourloanisfundedand recorded Manytimescredit,income,andassetsareverifiedthehourbeforeyouhavesignedyourfinal loandocuments Hereisalistyoushouldcomplywith:
MAKESURETHATYOUDO
Keepallaccountscurrent,includingmortgages,carloans,creditcards,etc.
Contactbothyourlenderandagentanytimeyouhaveaquestion
Returnphonecallsfromyouragent,loanofficer,closingatorney,oranyoneelseinvolvedinyour transactionassoonaspossible.
MAKESURETHATYOUDONOT
Quit your job or change jobs If this is likely, consult with your loan officer and call youragentshouldthisoccur
Allowanyonetomakeaninquiryonyourcreditreportexceptyourlender
Applyforcreditanywhereexceptwithyourlender.
Changebankaccountsortransfermoneywithinyourexistingaccounts.
Depositanyamountofcashover$100.
Co-signforanyone,foranyreason,foranything.
Purchaseorattempttopurchaseanythingelseoncreditsuchasacar,furniture,etc.
Sendinlatepayments,orincurlatefeesforanything
Waitlongerthanthetimeframegivenperyourcontracttoprovideallpaperworkto lenderwhenrequested
WILL MORTGAGE PRE-APPROVALS HURT
TheanswerisNO!Thisisaverycommonmythregardinggettingpreapproved Gettingpreapprovedis100%a benefittoyouasthebuyerbecauseitwillgiveyoutheconfidencetowriteoffersandpreventanyheartache downtheroad Inacompetitivemarketlikeours,agoodlistingagentandasmartsellerwillnotevenconsider lookingatyourofferwithoutapre-approvalletter
Creditbureaususeaprivateformula,whichcrunchesyourcredithistorydownintoasinglecreditscore The CreditBureauknowswhenyouaresearchingforamortgagebecausetheywillsee2-3differentlenderspulling yourcreditscorewithin45days.
WhatDOESloweryourscore,iswhenyouapplyforseveraldifferenttypesofcreditinashortperiodoftime.For example,acarloan,creditcard,departmentstorecard.DonotdoANYofthesethingswhilepurchasingahome. Thesmartmoveistoapplywithafewdifferentlenderstoensureyouaregettingthebestrateandtermsand thennotmakeanyothercreditapplicationsforanyreason
DETAILED Timeline
InitialBuyerConsultation
Outlinethehomebuyingprocess Personalizeyourhomesearch
SearchforHomes
Privateshowingsofhomesonmarket,FSBO,new builds OpenHouses
WriteanOffer
Decideonpriceandtermswithguidance
Signpurchaseoffer
Presentofferandnegotiatetoacceptance
EarnestMoneyDepositDue
Dueatacceptance,nolaterthan3daysafter %ofpurchaseprice(Canvary)
Earnestmoneywillbeheldbythetitlecompany
CompleteHomeInspection(s)
Completedduringduedililgence
Pricesetbyinspector,determinedbysizeofthe house
TitleCompanycompletesTitleSearch
They'llensurecleantitle,noeasementsorboundary issues,andwillthensendtolender
KELLEYCOORDINATESCLOSINGWITH ALLPARTIES
FinalWalkthrough
Within48hoursofclosing
Calltotransferutilities,cable&trash
Obtaincertifiedcheckforclosing
Finalnumbersavailablethedaybeforeordayof Wirethepurchasemoneytothetitlecompany's officeatleast24hoursbeforeclosingdateandtime
Pre-Approval
Consultwithatrustedmortgagelender Determineidealmonthlypaymentamount
CompleteMortgageApplication
Payforcreditcheckandappraisal-typically $400-$500
Appraisal
Bankappraiserdeterminesvalueand necessaryrepairs
Receivemortgagecommittment 15-30daysfrommortgageapplication
Loanissenttounderwriting Workwithlendertoclearremaining conditions
HomeownersInsurance
Chooseinsuranceproviderandsend informationtolender
Lenderreviewstitle&issuesCLEAR TOCLOSE
Lenderwillsendaclosingdisclosure toyounolaterthan3dayspriorto closingdate.
Closing Day!
