BUYING A HOME INVOLVES A STRATEGY FOR...

• Consulting and Preparing Initial Financial Documentation

• Pinpointing Your Dream Home

• Co-creating A Strong Competitive Offer

• Procuring An Open Escrow

• Bringing In The Appropriate Professionals To Inspect The Property

• Negotiating Any Needed Repairs

• Working Closely With All Parties To Close Escrow On Time

 

 I have relationships with vetted lenders, escrow companies, title companies and inspectors to provide the necessary expertise to help you make the most informed decisions.

“From the moment we connected, his professionalism, expertise and dedication were evident. He was able to answer all my questions so I could make informed decisions. His negotiation skills were fantastic.”

— Natalie

FAQs for Buyers

When I represent buyers the first thing I want to know are the questions and concerns they have.  Any real estate agent can ask how many bathrooms you want in your new home.  I like to take the time to get to know my client’s goals and priorities.  My role is to help point out all the pros and cons for all the decisions being made throughout the home selling/buying process and beyond.  I will even tell my clients things they may not want to hear because as their agent, I want my clients to make informed decisions.  My value is as a “problem solver” - anticipating concerns and resolving them.

 

What is the first step a home buyer should take?

The number one step for a buyer financing a purchase is to be Pre-Approved for a home loan.  Pre-approval should not be confused with pre-qualified.  The Pre-approval process can be done in less than an hour by sending the required documents to your lender. 

A Pre-Approval shows a lender has done a credit check, verified income and assets and is a written commitment for financing up to a certain loan amount.  

It’s helpful to work with lenders that not only offer competitive rates but can be reached outside normal business hours.  I have had conference calls with clients and lenders as late as 11PM on a Sunday night.  Having an accessible lender is important as questions and concerns need to be addressed in a timely manner.  It is recommended to have a Secondary Pre-Approval as a backup if there is a policy change with the first lender or delay which may affect the purchase agreement terms. 

Sellers wants to know the buyer is financially able to purchase the property, therefore any offer submitted without a Pre-approval letter, FICO score and Financial Statements to show cash payments for Down Payment and Closing Costs will not be considered.  Some listing agents require buyers to have a secondary Pre-Approval with one of their lenders as a condition when submitting an offer.

PROOF OF FUNDS INCLUDE:


Will being Pre-approved for a loan lower my credit score?

Seeking loan pre-approval from multiple mortgage lenders isn’t going to kill your scores.  Credit bureaus have come to expect rate shopping.  Rather than count every mortgage credit pull against you, most scoring formulas treat all of these hard inquiries within a certain time period as one, big credit pull - ask the lender about the time periods to inquire about your scoring.  

Keep in mind that different lenders use different credit scoring models to get you approved.  This gives buyers a solid period of time to work toward pre-approval among multiple lenders.  You’ll get a good look at their rates, terms and estimated closing costs without worrying about your credit score taking a nosedive.

Don’t let the fear of losing a couple points from an inquiry keep you from starting the mortgage-shopping process.  It’s important to understand that pre-approval isn’t a binding step.  You can work toward a pre-approval letter from as many lenders as you like.  Buyers mistakenly believe they have to close with the first lender that pre-approved them.  You can always have a chat with a mortgage lender about affordability and loan terms without having a hard inquiry, especially if you’ve checked your credit scores recently and know where you stand.  Information is your best protection.

Tell me more about FICO® scores?

FICO® scores are the credit scores most lenders use to determine your credit risk and the interest rate you will be charged.  You have three FICO® scores, one for each of the three credit bureaus – Experian, TransUnion and Equifax.  Each score is based on information the credit bureau keeps on file about you.  Lenders use your FICO score and not credit scores from sources as Credit Karma.

If you are applying for a mortgage, your credit score will be a critical part of the process.  Your score will determine the interest rate charged.  Someone with a 620 score will most likely pay an interest rate higher than someone with a 740 score.

What Is a Home Appraisal?

A home appraisal is an unbiased report on the worth of a house in the fair market, performed by a trained and licensed individual.  Appraisals are a requirement of a mortgage lender and are needed to ensure the homebuyer, the home seller and the mortgage lender receive the accurate and true value of the real estate in question.

In most residential property transactions you are able to choose your real estate agent and your lender, but you cannot choose your appraiser. Instead, the appraiser must be chosen by your lender to provide a level of independence from the buyer and seller.

Typically, the final report of value will cover the following items:


What is the difference between Pre-qualified rather than Pre-approved?

Mortgage Pre-qualification and mortgage Pre-approval may sound alike, but they’re completely different.  Pre-qualification entails a basic overview of a borrower’s ability to get a loan.  You provide a mortgage lender with information—about your income, assets, debts, and credit—but you don't need to produce any paperwork to back it up.  In return, you’ll get a rough estimate of what size loan you can afford, but it's by no means a guarantee that you'll actually get approved for the loan when you go to buy a home.

Mortgage Pre-approval, meanwhile, is an in-depth process that involves a lender running a credit check and verifying your income and assets.  Then an underwriter does a preliminary review of your financial portfolio and, if all goes well, issues a letter of pre-approval—a written commitment for financing up to a certain loan amount.

Bottom line?  If you're serious about buying a house, you need to be pre-approved, since sellers will accept offers only from pre-approved buyers.  

What is Desktop Underwriter (DU) and Loan Prospector (LP)?

DU (Desktop Underwriter) as well as Loan Prospector (LP) are two computer applications used when analyzing your loan application and credit.  Basically, all of your financial, personal and work information is analyzed and returns a recommendation as to whether or not your loan meets minimum guidelines.

DU and LP does not always guarantee for FULL loan approval.... it's always subject to a preliminary title report on the property, appraisal and all information must be verified by a real underwriter.  If the information that was fed into the system was incorrect then it could result in a decline.  It’s a look at a buyer’s financial situation without verification.

What are closing costs?

Closing costs are the expenses, over and above the price of the property, that buyers and sellers normally incur to complete a real estate transaction.  Costs incurred may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.  Prepaid costs are those that recur over time, such as property taxes and homeowners' insurance. The lender is required by law to state these costs in a "good faith estimate" within three days of a home loan application.

Closing costs occur when the title of property is transferred from the seller to the buyer.  The total dollar amount of closing costs depends on where the property is being sold and the value of the property being transferred.  Home buyers typically pay between 2% to 5% of the purchase price, but closing costs may be paid by either the seller or the buyer.  Closing costs are not part of the down payment.

What are the Do's and Don'ts of the Mortgage Process?

While you are considering the purchase of a new home, you should not do anything that will have an adverse effect on your loan from this point through the rest of the process.  The key is to contact your loan originator if you think you will be making any changes to your financial situation; even the seemingly most logically beneficial moves can backfire and cost you thousands of dollars or even your ability to obtain financing at all.

The Do's:

The Don'ts:


How much do I need for a down payment?

While the broad down payment average is 11%, first-time home buyers usually put down 3 to 5% on a home.  Several first-time home buyer programs don’t require big down payments.  A longtime favorite, the FHA loan, requires 3.5% down.  What’s more, some programs allow down payment contributions from family members in the form of a gift.  Some programs require even less.  VA loans can be made with zero down.  However, these programs are more restrictive.  VA loans are only made to former or current military service members.

For many years, conventional loans required a 20% down payment.  These types of loans were typically taken out by repeat buyers who could use equity from their existing home as a source of down payment funds.  However, some newer conventional loan programs are available with 3% down if the borrower carries private mortgage insurance (PMI).

Do I need a home inspection?

When I represent a client, I strongly recommend my clients have a home inspection whether they are the buyer and/or the seller. 

For buyers a home inspection is not required for FHA, VA, or conventional loans. Although the Federal Housing Administration does not require FHA borrowers to have a home inspection, they strongly encourage it as do I.  Home buyers intending to finance a home purchase with a Federal Housing Administration (FHA) loan may be surprised to learn that they won't be allowed to purchase a particular property if it doesn't meet FHA requirements of safety, security and soundness.  FHA home buyers would be wise to have a complete "regular" home inspection separate from the "health-and-safety" inspection conducted by the FHA appraiser (the FHA appraiser's inspection is mandatory).

When it comes to a VA loan, VA appraisers are looking for potential issues that revolve around the three S’s: safety, sanitation and structural integrity. There’s a host of Minimum Property Requirements that VA appraisers consider, including things like mechanical systems (heating & cooling), a reliable potable water supply, domestic hot water and a safe method of sewage disposal.  The VA wants homes that are move-in ready.  Problems with the property generally have to be corrected before a loan closes.  VA borrowers whose prospective property fails to meet the Minimum Property Requirements will be hard-pressed to secure VA financing.  

To recap, home inspections are highly recommended because they can reveal defects in the home that are not easily detected.  Home inspections bring peace of mind to one of the biggest investments of a lifetime.

What is private mortgage insurance?

Private mortgage insurance, also called PMI, is a type of mortgage insurance you might be required to pay for if you have a conventional loan. Like other kinds of mortgage insurance, PMI protects the lender—not you—if you stop making payments on your loan. 

PMI is arranged by the lender and provided by private insurance companies. PMI is usually required when you have a conventional loan and make a down payment of less than 20 percent of the home’s purchase price. If you’re refinancing with a conventional loan and your equity is less than 20 percent of the value of your home, PMI is also usually required.

There are several different ways to pay for PMI. Some lenders may offer more than one option, while other lenders do not. Before agreeing to a mortgage, ask lenders what choices they offer. The most common way to pay for PMI is a monthly premium. This premium is added to your mortgage payment. Sometimes you pay for PMI with a one-time up-front premium paid at closing. If you make an up-front payment and then move or refinance, you may not be entitled to a refund of the premium. Sometimes you pay with both up-front and monthly premiums.

Lenders might offer you more than one option. Ask the loan officer to help you calculate the total costs over a few different timeframes that are realistic for you. There are factors you should consider when deciding whether to choose a loan that requires PMI. You may be able to cancel your monthly mortgage insurance premium once you’ve accumulated a certain amount of equity in your home. PMI can help you qualify for a loan that you might not otherwise be able to get. But, it may increase the cost of your loan. And it doesn’t protect you if you run into problems on your mortgage—it only protects the lender.

Lenders sometimes offer conventional loans with smaller down payments that do not require PMI. Usually, you will pay a higher interest rate for these loans. Paying a higher interest rate can be more or less expensive than PMI—it depends on a number of factors, including how long you plan to stay in the home. You may also want to ask a tax advisor about whether paying more in interest or paying PMI might affect your taxes differently.

Borrowers making a low down payment may also want to consider other types of loans, such as an FHA loan. Other types of loans may be more or less expensive than a conventional loan with PMI, depending on your credit score, your down payment amount, the particular lender, and general market conditions.

You may also want to consider saving up the money to make a 20 percent down payment. When you pay 20 percent down, PMI is not required with a conventional loan. You may also receive a lower interest rate with a 20 percent down payment.

Ask lenders to show you detailed pricing for different options so you can see which option is the best deal.

Warning: Private mortgage insurance protects the lender—not you. If you fall behind on your payments, PMI will not protect you and you can lose your home through foreclosure.

What documentation is needed when submitting an offer?