Benefits of Home Ownership
Owning a home helps you establish financial credibility.
Owning your own home provides you with independence and more privacy than renting. You are free to paint walls, plant flowers, keep pets and anything else within legal bounds.
As you make more payments and own more of your home, you add to its investment value. Most improvements you make will also add to its value.
A home reflects its owner’s values and lifestyle. Owning a home can provide you with a source of pride, enjoyment and satisfaction.
A home can provide security against inflation because the value of your home increases as prices go up.
Being established in a community provides a sense of belonging, stability and security.
Interest on your mortgage loan is deductible on your yearly personal income tax return. Many of the closing costs associated with purchasing your home are deductible, as are your property taxes.
Finding the Right Home
Real Estate Agents
Sit down with a real estate agent and discuss your needs, type of area, style of home, amenities and everything you really want in your next home. A real estate agent can help you by accessing a Listing Service which covers all properties listed for sale within a specific area. Together, you can select the homes you would like to see, set appointments and preview homes in a short period of time. An agent can guide you through the entire process.
Many people go through the real estate classified section or browse the Internet to find a home that appeals to them. However, your real estate agent will have many listings available that may not appear in the newspaper or Internet on a continuous basis. New listings come on the market daily.
Multiple Listing Service
Your real estate agent should have access to the multiple listing service if it is available in your area. It usually includes the following details about homes and properties for sale:
- Annual property tax
- Current financing (when assumable)
- Listing company
When Previewing A Home:
Write notes when previewing a home so you will be able to discuss the details later with your real estate agent.
Ask questions about the home and discuss any objections or concerns you may have.
Ask about the community – schools, shopping and transportation.
Ask specific questions about the construction of the home; electrical, plumbing, heating, cooling systems, etc.
Relax. Finding your new home can be a rewarding experience. Have a good time and enjoy the process.
Home Shopping Tips
Check For Properly Working Appliances/Fixtures:
Kitchen cabinet doors
Lights (interior & exterior)
Ensure House Is Well-Built & Systems Are In Working Condition:
- Brick bulging or cracking
- Shingles missing or broken
- Siding rotted or missing
- Gutters damaged or need to be cleaned
- Concrete cracked in sidewalks/driveway
- Water seepage in basement
- Cracks in foundation
- Poor ventilation
- Sub-flooring damaged or loose
- Cracked walls or ceiling
- Cracked tiles
- Loose plaster
- Flooring damaged
- Soft, springy floors
- Water stains near windows
- Water stains on ceiling below bathroom
- Water stains in attic
- Pipe insulation missing
What is an inspection?
There are numerous types of inspections. An inspection is meant to evaluate, at minimum, the structural and mechanical condition of a property. It is not the same as an appraisal which evaluates the market value of a property. Persons involved in real estate transactions need unbiased information about the physical condition of property they plan to buy or sell and your contract should include a contingency that you obtain a satisfactory inspection report.
Home Inspectors vs. Engineers
Home Inspector: A person who examines any component of a building, through visual means and through normal user controls, without the use of mathematical sciences.
Engineering: Analysis or design work requiring extensive preparation and experience in the use of mathematics, physics, chemistry and the engineering sciences.
Finding a qualified Inspector
Referrals from satisfied customers
Referral from a local real estate agent or mortgage company
Local consumer affairs office
Yellow Pages under “Building Inspection Services”
Ask if she/he is a member of the American Society of Home Inspectors (ASHI). The ASHI has established standards of practice which include the specific services, limitations and exclusions that can be expected from private home inspectors.
What the inspection, at minimum, includes…
Every inspection should include, but not be limited to, an evaluation of at least the following:
- Plumbing and electrical systems
- Ceiling, walls and floors
- Hazardous materials concerns
- Heating and air conditioning systems
- Common areas (in condominiums)
Answers to Frequently Asked Questions
What is the difference between “pre-qualified” and “pre-approved”?
If you are “pre-qualified” you have determined, with a loan officer, what price you can afford based on the down payment, your debts and the amount the mortgage company will approve for your mortgage. Being “pre-qualified” is only a determination of your probable credit. If you are “pre-approved”, your credit, employment and funds have been approved by the lender.
What are closing costs?
Closing costs are an accumulation of charges paid to different entities associated with the buying and selling of real estate. For buyers, they are usually about 4-6% of the total sales price of a property. Some of the closing costs you might encounter are: application fees, appraisal fee, county taxes, credit report, discount points, documentation fee, escrow fees, homeowners’ association fees, loan fees, mortgage insurance, origination fees, tax registration and title insurance premium.
What is a point?
One point is equal to 1% of the new loan amount. Whenever government regulation, state usury laws and/or competitive practices prohibit the lender from charging a rate of interest that would make the real estate loan competitive with other fields of investments, the lender must seek some method of increasing the yield for the investors. By charging “points”, the lender can bring the real estate loan up to those other investments.
What is earnest money?
When you make an offer, you will need to put up an earnest money deposit as a sign of good faith that you are seriously interested in buying a home. That deposit becomes a part of the purchase price and is held in a trust account until there is full acceptance of the offer. Typically, an earnest money is 3-5% of the offer amount.
What is title insurance?
Title insurance protects the named insured against loss because of defects, liens, encumbrances, adverse claims or other matters not shown or disclosed to the new owner that attach before date of policy.
Is VA or FHA financing unfair to sellers?
FHA and VA loans provide purchasers the opportunity to buy homes with minimal cash investment and at lower interest rates. The result is a larger market for sellers, who also benefit by receiving all cash for their equity.