What First-Time Homeowners Need to Know

samtheguestblogger By samtheguestblogger, 28th Jan 2014 | Follow this author | RSS Feed | Short URL http://nut.bz/tmj7-_0g/
Posted in Wikinut>Guides>Property & Real Estate>Buying A Home

The real estate market is looking better, and many people are making the decision to purchase their first home. After your successful home search comes finalizing the mortgage loan and making the home your own.

Homes

There are also costs associated with the purchase transaction that you may not be aware of or expecting. It is important to discuss these in detail with your mortgage broker and include them in your budget. Here are a few things to expect from your first time home buying experience:
1. Loan Options: There are a variety of home loans available for the first-time buyer. One of the most common is a fixed-rate loan, typically for 15 or 30 years. This means the qualified interest rate will be locked in for that specific time period. Another option, which may be best for individuals that are not planning on staying in their homes for a long time, is an adjustable rate mortgage, or ARM. These generally carry a lower interest rate that will change after a pre-determined number of years. At that time the expectation is that the rate will increase. Discuss which type is best for you with a qualified mortgage broker.
2. Closing Costs: As with most purchases, there will be fees involved in the closing of a mortgage loan. Some of these come from the lender directly and include loan origination fees, the cost of the appraisal, and the loan application fee. In total you should expect these costs to be about 2-3% of the amount being borrowed. At times it will be possible to negotiate these fees from the seller when finalizing the purchase price. Other charges you can expect to incur may include title insurance, credit report fees, and transfer taxes. If you plan or are required to escrow you will also need to pay for insurance and some property taxes—typically 9 months worth—prior to taking possession of the home.
3. Paperwork: You may be surprised by the number of contract pages you will be required to review and sign. Having a good realtor to help you navigate the documents will be beneficial and is recommended. Be sure to ask questions when you are uncertain of the meaning or purpose of the various forms; this is one time that you need to read and understand the fine print. Some forms you can expect to sign are the settlement statement, truth-in-lending statement, and the mortgage note. The settlement, or HUD statement, will outline the details of the purchase, agreed upon price, terms of the loan, and any taxes that will be due at closing from both the seller and buyer. A truth-in-lending form will list the terms of the loan as well as outline the finance charges. The mortgage note simply states that you intend to pay back the lender based on your agreed upon terms.
What did you learn from your first home buying experience?

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Sam is an avid blogger that loves to share information with his readers that will apply to their daily lives.

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