Buy

First Time Home Buyers

A home is an investment. You may be pleasantly surprised how much money the same amount you are spending on rent every month can buy, if you apply it toward a low fixed rate Florida mortgage. Why not take a step toward building equity for yourself and your family? When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you’ll enjoy having something that’s all yours – a home where your own personal style will tell the world who you are. In fact, today in Florida 7 out of 10 first time home buyers make a down payment of 10% or less and many Floridians buy their homes with no money down at all.

Although recent problems in the subprime market have made lenders more careful about how they extend credit, it’s still very possible to buy a home with little or no money down. Using a real estate agent is a very good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you’ll want to know about a neighborhood you may be considering…the quality of schools, the safety of the neighborhood, convenience of highways and shopping centers, and more. He or she will help you figure the price range you can afford and search the multiple listing services for homes you’ll want to see. With immediate access to homes as soon as they’re put on the market, the broker can save you hours of wasted driving-around time. When it’s time to make an offer on a home, the broker can point out ways to structure your deal to save you money. He or she will explain the advantages and disadvantages of different types of mortgages, guide you through the paperwork, and are there to answer last-minute questions when you sign the final papers at closing. By utilizing a broker a buyers will absorb no additional cost. In addition, buyers who utilize brokers to purchase property end up buying their home at a more competitive price. All local markets vary from one another, and Beach Town Real Estate agents can guide you by giving you information based on experience and market knowledge. The specific way you progress through a home buying transaction varies depending on the real estate laws and customs where you live, but there are many home buying steps that are standard, even though they might not be accomplished in the same order in every location. You’ll feel more confident about your home buying journey when you understand what is required of you and every other person who is involved in the transaction.

Step 1. Get Your Finances in Order
Your credit reports are an ongoing look at how you manage your finances. You must know exactly what your credit reports say about your financial history before you apply for a mortgage, because the reports play an important role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you. If you haven’t looked at your credit reports, you might be surprised at their contents, because errors are common.

Step 2. Get Familiar with the Mortgage Industry
Finding the right loan and lender is crucial to your home buying success. It’s up to you to determine which lender is best for your needs, and it’s always a good idea to have at least a bit of background about the loan process before you talk to a lender. If you do not have a lender you are already working with,Beach Town Real Estate Broker and Agents have a preferred list of lenders they can refer you to.

Step 3. Get Pre-Approved for a Mortgage
Do you know how much house you can afford? Probably not, unless you’ve talked with a lender. Pre-approval helps you in other ways. Consider this scenario. A home seller gets two similar offers. One is accompanied by a letter from the buyer’s bank that states she is pre-approved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think the seller will consider first? Real estate experts tell first-time home buyers that it’s critical to apply for a loan before shopping for a home, and it’s true; this is an essential first step. But do you know that it’s far better to be pre-approved for a loan than to be pre-qualified? There are more advantages to gaining pre-approval than you would initially think. Ask our Beach Town Real Estate Agents how this benefits you and speeds up your first time home buying process.

Step 4. Determine Your Wants and Needs
Just because you may feel restricted by price ranges — especially if this is your first home purchase — don’t let anybody tell you that you can’t afford to be choosy when looking for a home to buy! You are unique. You have desires and needs, hopes and dreams for your new home that are different from your parent’s, friends or coworker’s. Buying a home isn’t as difficult as you might think, even if you’re short on funds, but the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at houses. Discussing your desired specific needs to your Beach Town Real Estate Agent can help determine where you might be buying you first home.

Step 5. Learn to Work with Real Estate Agents
Real estate agents represent buyers, sellers, or both–and in some states they can work as neutral facilitators for either party. It’s essential to understand agent duties and loyalties before you make that first phone call. A successful real estate transaction requires a group effort and takes cooperation from everyone associated with the sale.

Step 6. Start Searching for a Home
Before you actively begin your search it is crucial that a buyer and (or) buyers have a description on their target property to purchase. Your agent will give you multiple listing sheets to review that will describe the key points in different properties you will want to know. Such as the age of the home, how it was constructed, what year it was built, what is the square footage, the property taxes and other key factors that you will want to know about a property. I’m sure you’ll also pick up House for Sale magazines and read classified ads in your local newspapers. You’ll probably spend time surfing the Internet for homes. You might even plan afternoon drives to preview neighborhoods. Those are all excellent ways to see what’s available. Statistically more than 85% of new home buyers begin their search online. Beach Town Real Estate has developed a website that will give our customers a live feed to the Multiple Listing Service. This will give them up to date access on the best deals in the market place.

Step 7. Handle Pre-Offer Tasks
Deciding whether or not you want to buy a house involves a look at its structure and its features, but there are many other topics that are every bit as important to your purchase. Here are a few topics you should explore before you make an offer. Beach Town Real Estate can help you answer these Background Readings along with other important buying factors:

  1. How’s the Resale Potential?
  2. What are the Property Taxes?
  3. What Kind of House Is It? Site Built, Modular, Manufactured
  4. Do Others Have a Right to Use the Property?
  5. Can You Live with the Deed Restrictions?
  6. Is the Reported Square Footage Accurate?
  7. Is the Heating System Efficient?

 

Step 8. Make an Offer
There’s no one set of instructions that can cover all the differences in real estate laws and customs that exist throughout the United States, so the mechanics of making an offer and its specific contingencies depend greatly on your location. However, our real estate experts will structure your offer in your favor by highlighting key points that affect the economic climate you are either buying or selling in.

Step 9. Home Inspections and Other Tests
In some states, home inspections are accomplished before the final purchase contract is signed. In other states, inspections take place after an offer is finalized. No matter when you do them, it’s critical to decide which inspections and tests you want to perform. Talk with our real estate agent or other advisor to find out when inspections should be handled and if additional types of testing are important for your specific area. Here is a basic home inspection check list:

  1. Order a Full Home Inspection
  2. Testing for Radon Gas
  3. Looking for Molds and Mildew
  4. Lead Paint Disclosures & Inspections for Pre-1978 Homes
  5. Well and Septic Inspection and water sample test
  6. Understanding and Checking the Septic System
  7. Tenting to Eradicate Wood Destroying Insects
  8. Should You Buy a Home Warranty?

Step 10. Avoiding and Correcting Last Minute Problems
As your closing date nears, everyone involved in your real estate transaction should check its progress on a daily basis, because staying on top of things means you’ll know immediately if there’s a problem that must be dealt with. Here’s a bit of information that focuses on a few common problems that home buyers must deal with before they close on a house. Remember an appraisal is not a home inspection. Appraisers make notations about obvious problems they see, but they are not home inspectors. They do not test appliances, look at the roof, check the chimney or do any other typical home inspection tasks. Never count on an appraisal to help you determine if the home is in good condition. If the appraisal comes in low, don’t panic because there are often steps you can take to make the deal work. If the appraisal uncovers other problems, remember that most problems are correctable. Try to keep your cool and work through issues one step at a time.

Step 11. You’re on the Way to Closing
Most of your home buying problems is behind you now and you’re on your way to closing, also called settlement, the event that transfers ownership of the property to you. Just a few more things to learn, a few more things to do, and you’re there!Get the facts about the Title Insurance and learn to read the HUD-1 or our agents can assist you with that process. Soon you will take your final walk through. During this process the home should be move in ready. This will give you an opportunity to determine that the home was not damaged during the move out process and all items such as fixtures and appliances are left intact as expected. Other specific tasks can best be explained and handled by our real estate agents, your lender, your attorney, your closing agent, or others who are helping you complete the home buying transaction.

Never hesitate to ask questions. Ask as many questions as necessary to help you understand the entire home buying process. We understand becoming a home owner is not only exciting but is generally some ones largest investment. Our level of seriousness and professionalism can be expected throughout this duration. You’ll feel much better about the transaction if you stay informed and understand what’s happening every step along the way. We want your buying experience to be fun, exciting and educational. We look forward to working with you and value your relationship.

Financing

Most home buyers require a mortgage to secure a home or another type of real estate. As with any other type of loan, the amount is amortized over a number of years. Most mortgages carry either 15 or 30 year terms.

Two basic types are FRM fixed rate mortgages and ARM adjustable rate mortgages.(The mortgage calculator to your left calculates fixed rate mortgages).
Many economists recommend spending roughly about 25% of your monthly income on housing. If you make $6,000 per month, your mortgage payment should be around $1,500 per month. This can vary greatly, depending on your circumstances.
Usually new houses are easier to finance because the lender tends to bear less risk.
Simple Mortgage Calculator

What is a Fixed Rate Mortgage?
If you have a fixed rate mortgage, your payments and interest rate will stay the same throughout the life of the loan. If your monthly payment is $1500, that’s what you will pay every single month for 15 or 30 years.

You should keep in mind that even though your monthly payment stays the same if you have an FRM, property taxes and insurance rates are not fixed. When you calculate these amounts, you should give yourself some leeway to allow for insurance and tax increases in your budget.

Mortgage Interest Rates
An interest rate is usually determined by the current interest rates set by the Federal Reserve and the risk of a loan. Lenders assess the risk of foreclosure (when the mortgage cannt be repaid) by looking at the type of property being financed and even more importantly by looking at prior history and credit rating of the borrower.

If you have a high credit score and a history of credit, your rates will be much lower because the bank or lending institution can be fairly safe in assuming you will be able to pay your monthly payments.

Lenders typically charge 0.75% to 1% over the federal reserve rate for fixed mortgages to borrowers with perfect credit. For those will poor credit, the rates can range from 2-5% (and possibly more) above the federal reserve rate. (In June 2007, the federal reserve rate is 5.25%)

Do I Need a Mortgage Broker?
Many people hire mortgage brokers to help them find the best rates and structure special mortgage arrangements that may be more difficult for an average person to setup and negotiate.

Mortgage brokers act as the intermediaries between you and lending institutions who are willing to provide financing. Brokers are especially popular for people who have credit problems and need assistance securing these more-difficult-to-obtain loans.

Borrowers do have to beware, however, as the mortgage broker industry is not as heavily regulated and can be open to shady practices. You should do your research and make sure the mortgage broker you’re dealing with has a good reputation.

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Our Office


At Beach Town Real Estate our team consist of some of the top real estate professionals in the South Florida area. We continuously strive for first class service.
We understand that this is only accomplished by hard work and dedication. Our passionate professionas have a burning desire for the ever changing real estate market.


Location

900 E Indiantown Rd Suite #101
Jupiter, FL 33477

Office: 1-561-721-6500
Direct: 1-561-801-9199
Fax: 1-561-721-6501
Email: admin@beachtownrealestate.com

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