Do I need to be there for the inspection? It’s not required, but it’s a good idea. Following the inspection, the home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you’d like to purchase and it is a good time to ask general maintenance questions.
A credit bureau score is a number, based upon your credit history that represents the possibility that you will be unable to repay a loan. Lenders use it to determine your ability to qualify for a mortgage loan. The better the score, the better your chances are of getting a loan. Ask your lender for details.
The conventional home buying wisdom is to buy as much house as you can afford. It is important, however, to limit your mortgage obligation to what you can comfortably manage, especially during times when the economy is uncertain.
Beginning on the day that you complete the purchase of a home, keep track of everything you spend on major improvements. You will need to document those expenditures, which increase your home’s “basis” (and thus reduce your net “gain”) when you eventually sell. Even with today’s liberal capital gains exclusion, rapidly rising home values may push some homeowners closer to the taxable gain threshold faster than they suspect.
A home warranty, or home protection plan, is a service contract, normally for one year, which protects homeowners against the cost of unexpected repairs or replacement on their major systems and appliances that break down due to normal wear and tear. A negotiable contract between the buyers and sellers which do not overlap or replace homeowner’s insurance policy, this type of warranty can save the new homeowner lots of headaches, as well as put seller’s fears to rest. The warranty covers mechanical breakdowns, while insurance typically repairs the related damage, for example: if a hot water heater burst and destroyed a wall in your home, the warranty would repair the water heater and your insurance would pay to fix the wall.
There may be closing costs customary or unique to a certain locality, but closing costs are usually made up of the following: Attorney’s or escrow fees (yours and your lender’s if applicable). Property taxes (to cover tax period to date). Interest (paid from date of closing to 30 days before first monthly payment). Loan origination fee (covers lender’s administrative costs). Recording fees. Survey fee. First premium of mortgage insurance (if applicable). Title insurance (yours and your lender’s). Loan discount points. First payment to escrow account for future real estate taxes and insurance. Paid receipt for homeowner’s insurance policy (and fire and flood insurance if applicable). Any documentation preparation fees.
Renovating your home can increase its resale value. But don’t expect a dollar-for-dollar return. Some upgrades (an extra bathroom, for example) pay off; some (like swimming pools) don’t pay off at all. If you want fine marble in the foyer, spend away. But don’t count on buyers being willing to pay as much for it as you did.
A standard homeowners policy protects against fire, lightning, wind, storms, hail, explosions, riots, aircraft wrecks, vehicle crashes, smoke, vandalism, theft, breaking glass, falling objects, weight of snow or sleet, collapsing buildings, freezing of plumbing fixtures, electrical damage and water damage from plumbing, heating or air conditioning systems. Such policies are “all-risk” policies, which cover everything except earthquakes, floods, war, and nuclear accidents.
Contact the local chamber of commerce for promotional literature or talk to your real estate agent about welcome kits, maps, and other information. You may also want to visit the local library. It can be an excellent source for information on local events and resources, and the librarians will probably be able to answer many of the questions you have.
The amount of the down payment, the size of the mortgage loan, the interest rate, the length of the repayment term and payment schedule will all affect the size of your mortgage payment.
