Closing costs are out-of-pocket expenses paid by a homebuyer before the property transfer is finalized.  Many expenses are associated with buying a home in addition to the cost of assuming a mortgage.  Closing costs can vary significantly from one transaction to another, and often depend on a number of factors, including the price of the home, the area in which you are buying, and the type of mortgage that you have selected.

Yet closing costs are not the only upfront expenses that will need to be paid when you are purchasing a home.  You may be required to make a down payment, pay for a home inspection, cover escrow fees, make advance deposits, and incur other types of miscellaneous costs.

Realtors are knowledgeable about the out-of-pocket costs that buyers face when purchasing a new home.  The have extensive experience dealing with closing companies, different types of mortgage programs, and escrow accounts. Therefore, your realtor can be a source of valuable information about buyers´ costs.

This list of possible fees covers many of the items for which you will need to have cash on hand, although it may not be an all-inclusive list. Fortunately, you probably will not be subject to all these types of costs. The specific costs will depend on your particular situation.

Closing Costs
Closing costs are those costs paid by the buyer to the closing company that finalizes the home-purchase transaction. Some sellers will offer to pay a portion of the buyer´s closing costs. In addition, some mortgage programs will offer funding for closing costs, often in the form of a second mortgage or a line of credit.

Down payments are not considered to be part of the closing costs, even though they are generally due on or before the date of closing. Again, assistance programs are available for paying these costs.  Particularly if you are a first-time buyer, it makes sense to research all the available options.

Your realtor can offer extensive information about specific first-time homebuyer assistance programs and can assist you in determining whether the seller is willing to assume some of your closing costs.

Down Payment
A down payment is usually required by your mortgage company.  Some lenders may have special loan programs that offer a 0% down payment. However, you can generally assume that you will be responsible for providing at least a small percentage of the home´s cost as a down payment.

There are federal and state restrictions on the sources of funds that a buyer can use for a down payment.  Lenders may have additional criteria and restrictions.  To use gift funds for a down payment, a buyer usually has to have had that money in his or her possession for a certain period of time.

Investigate down-payment requirements when you are shopping for mortgage programs. This is often a good way to determine which program is best for your specific situation.

Inspection Costs
In most real-estate transactions, the buyer hires a professional home inspector to perform a detailed inspection of the property that he or she wishes to purchase. The buyer is responsible for paying these home-inspection costs.  Spend as much as necessary to obtain a high-quality inspection from a certified inspector.  The up-front investment can help you avoid incurring significant additional expenses in the future.

Your mortgage lender will probably require an appraisal inspection in addition to the home inspection.  The purpose is to evaluate the true worth of the home that you are buying.  A lender will not want to lend you an amount that is significantly greater than the appraised value.  Situations vary, and depending on the home´s location and your lender´s rules, the amount that you can borrow will vary.

Private Mortgage Insurance
Private mortgage insurance is an expense that potential buyers hope to avoid.  It is not required for all mortgage-based home purchases. Whether you will be required to have this insurance depends on your financial situation and your lender´s policies.

Private mortgage insurance (PMI) is a cost associated with taking out a mortgage when the buyer is unable to provide what the lender considers to be a suitable down payment.  Usually the cost of PMI is wrapped into your monthly mortgage payment, but you will probably need to pay an upfront PMI application fee.

New Construction Inspections
This up-front-cost will be part of your costs only if you opt to build a new home.  Most mortgage lenders insist that you independent inspections are conducted throughout the home-building process in order to protect their, and your, interests.

Up-Front Interest
Some lenders require that buyers pay the interest accrued from the closing date to the date of the first mortgage payment on or before the day of closing.  Your lender will be able to provide you with that amount well in advance of the closing.

Credit-Report and Mortgage-Application Fees
Some lenders will waive these fees or wrap them into the amount of the mortgage payment.  A credit-report fee is charged to a mortgage applicant to cover the costs of pulling the potential borrower´s credit report as part of the application process.  This fee should never be significantly higher than the actual cost of the report.  Read your lender´s fee disclosure carefully before selecting a mortgage program. Ask your realtor about ways to decrease the credit-report fee assessed by most lenders.

A mortgage-application fee is basically the cost of doing business for a potential mortgage borrower.  This fee is assessed by the lender in order to cover the clerical and administrative costs associated with processing a mortgage application.  Again, your realtor may be able to assist you in finding ways to reduce these costs.

Transfer Fees
Depending on where you are purchasing a home, you may be required to pay a transfer fee to cover the cost of transferring property records from the seller to you, the new buyer.

Impact Fee (Home Association Fee)
This fee is applicable only if you are purchasing a town home, a condo, or a house that is governed by a homeowners´ association.  Your realtor can help you evaluate the associated fees and determine whether you would be responsible for paying them.  Impact costs are almost always paid on the day of closing, but the actual amount will depend on the specific circumstances.

This list of buyers´ costs is not all-inclusive, but it does include the most common costs that a homebuyer needs to pay before the home transaction is finalized.

Many years of experience have taught realtors to find out whether sellers might be willing to reimburse you for some of your out-of-pocket, up-front expenses. They also know ways to get the costs included in your mortgage amount.

Buying a home requires a tremendous amount of research.  By being prepared to cover the miscellaneous upfront costs of your home purchase, you will save a significant amount of interest in the long run.

^{Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137}

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Congratulations on your decision to join the ranks of millions of home owners! Spring is the perfect season to buy a home, and it is the time of year when many others have decided to buy as well.  While that may seem like it would crowd the market with eager buyers, what it actually means is that those other buyers will need to first sell their current homes before they can consider buying a new one.

In my years of experience as a realtor, I can tell you that spring is a fantastic time to start shopping for your new home.  You will be able to visit and explore many homes for sale. These are homes whose owners have spent all winter preparing for your arrival.

Because lenders often offer their most competitive and attractive interest rates, and introduce new mortgage loan program, during the spring, buyers are more likely to save money when they opt to purchase during this time of year.

Here is some advice about how to structure your search for a new home. I hope you will find it to be very helpful.

Get a Loan Commitment, but Keep the Numbers to Yourself
Buyers who already have a loan commitment in their hands before beginning their home search are able to reduce the number of homes considered for purchase. Having a loan commitment also makes negotiating with the seller much less intense.

In order to obtain a loan commitment from a mortgage lender, you will first need to determine the amount of money that you can afford to pay toward your home loan each month.  Keep in mind other expenses, such as recurring debt payments, as well as possible changes in your financial or family situation over the life of the mortgage.

Once you know what you can truly afford to pay, research mortgage lenders and their specific lending programs.  As a realtor, I know that one of the most time-consuming and frustrating processes that new home buyers face is the process of selecting a mortgage product that works for their specific needs.  Explore the options, negotiate with the lender for a lower interest rate, and consider the amount you have on-hand for up-front costs and a down payment.

Once you have identified the best possible mortgage program for your lifestyle, complete the lender´s pre-approval application process, which will include providing paperwork and information regarding your financial situation and employment status and history.  The lender will investigate your credit history and may verify your employment.  If everything is in order, the lender may issue you a pre-approval decision.

At this point, you need to go one step further.  Request a written loan commitment stating that the lender agrees to give you a mortgage loan of a specific amount. This statement will also contain the maximum amount that you are approved to borrow.  Keep this number to yourself!

Make a Wish List for Your New Home
Before you begin looking at homes, it is a good idea to list everything that you want in a home.  List everything that you can think of, because this is your wish list.  Realize, of course, that the list is not set in stone and that you will probably never find a home that offers every detailed item on the list.

Next, go through your list and prioritize each item.  Mark those items that you absolutely must have with a number 1.  Mark those items that you do not require, but would prefer, with a 2.  Mark everything else with a 3, 4 or 5 depending on the importance of the item.

Take a break for a few days and then revisit your list to ensure that it accurately reflects what you´re looking for in a new home.

Once you have completed your prioritized wish list, share it with your realtor and start looking for the home of your dreams!

Look Online
After you have met with your realtor and shared your list of must-haves, the realtor will look through his or her listings and those of other realtors to identify homes that meet your requirements.

While the realtor is doing this, you can use the Internet to search on your own.  Many online realtor sites allow potential buyers to search for homes against a specific list of criteria, and most of these sites provide photographs of the listed homes.

Make a list of any homes that capture your interest, including their address (if available) or the general location.  Most homes listed on realtors´ websites have an MLS (multiple listing service) number, which allows the realtor to find out more detailed information about the home, including the address if you were unable to find that information.

Finally, contact the realtor to arrange showings of the homes that you are most interested in.

Take a Drive
The Internet is a great tool for researching potential homes and neighborhoods, but if you plan to relocate to an unfamiliar area, take some time to explore the location.  If possible, visit the neighborhood at several different times of day.  Driving through a neighborhood in the evening might enable you to talk to other residents. Driving through the neighborhood late at night might give you some insight into the level of noise, activity and possibly even crime that you might experience while living there.

Communicate with Your Realtor
Your realtor´s top priority should be to help you find the right home for your needs. A good realtor will use years of experience and various types of expertise to work with you to find the perfect match.  If you change your mind about what type of neighborhood or home you´re interested in, simply let your realtor know, so that he or she can adjust the search on your behalf.

When you and your realtor work together as a team, you will successfully find the home of your dreams!
Be Prepared for a Fast Closing
When negotiations have stalled, one of the things that can jump-start the sales transaction is for the potential buyer to offer the seller a 30-day closing.

Remember that many spring buyers are also sellers.  Therefore, some sellers must wait for their current home to sell before they are able to close on their own new home.  By carefully navigating this situation and applying strong negotiation skills, you may be able to move into your new home within a month from the date you make an offer.

Buying a new home is a very exciting process, and buying in the spring definitely carries many advantages for buyers.

A good realtor will be willing and available to help you with each and every step of the home-buying process.  From investigating mortgage programs and developing your wish list, to negotiating with sellers, let your realtor´s expertise and experience work for you.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

Many first-time buyers are unfamiliar with the process when they start looking for a home. Realtors know that the best clients are those who have done their research before starting the process of shopping for a home, because it makes the process much smoother and there are generally very few surprises.  Nothing is more critical for a buyer than being prepared for just about anything.

This holds true whether you are planning to by a small one-bedroom home or a pricey gated home in a beachfront community.  Knowing how the buying process works is definitely advantageous to you as a buyer.

Here are three important questions to ask yourself before deciding to buy a home:

FIRST:  Are You Financially Prepared?
Lenders make it simple for today´s home buyers to determine in advance just how much home they can afford to purchase comfortably.  The first step in making this determination is to use a pre-qualification service through a major lender in order to estimate how much you can afford in light of your current income and large monthly payments.  This process may be as simple as a calculation that tells you what amount you can finance based upon a monthly payment equal to 28% of your net monthly income, or it may factor in your car payments, student loan payments or other mortgage loan payments.  The calculation depends on the lender, but generally the pre-qualification process does not involve anyone reviewing your credit report or other details about your specific situation.

Note that pre-qualification is not a promise to lend.  For that, you will need to select a lender and request pre-approval of a maximum loan amount.  Most lenders use the pre-approval process to determine the borrower´s creditworthiness and decide whether to extend financing and, if so, in what amount.  Once a buyer is pre-approved for financing, he or she receives a pre-approval letter from the lender that states the maximum amount that can be borrowed and the conditions of the loan.

However, pre-approval is not the only thing you need to worry about.  As anyone who has ever purchased a home will tell you, you will need to have about five percent of the home´s purchase price in hand on the day of closing.  This money can and will be used to cover closing costs, such as attorney fees, property taxes, title insurance, documentation fees, and more.  The total closing costs will vary depending on the home´s location and your lender.  If you have made an agreement with the seller in advance, he or she may pay your closing costs for you.

The down payment is one more thing that you need to consider in terms of finances. Traditionally, buyers were expected to make a down payment of about 20% of the home´s purchase price in order to secure equity and demonstrate security to the lender. Fortunately, today´s buyers have access to many programs that provide down-payment assistance and even zero-down mortgages.  Therefore, if you feel that you are unable to put 20% down, research such programs before determining which loan program you will use to purchase your home.

Canadian lenders are more rigid about down-payment requirements, because they are subject to laws that govern the maximum borrowing percentage.  Therefore, Canadian buyers should plan to make a 25% down payment on the closing date.

Making a down payment is more than just handing the lender a check for 20% of the home´s selling price.  As part of the mortgage approval process, you will need to clearly document where

the money came from and how you came to have it.  A gift is allowable for down payments, but only if it is from a close relative or another person with whom you can prove having a very close relationship.  You can use funds from your checking and savings accounts as long as they have been there for several months prior to lender verification. You can also liquidate assets such as homes, vehicles and investments in order to generate the necessary down-payment cash.  Some employer-sponsored retirement accounts will permit you to borrow or cash out funds for the down payment on a home.  In generally, it is not acceptable to borrow funds in order to make a down payment.

SECOND: What Do You Want?
This open-ended question is a prompt to get potential buyers thinking about the list of must-haves for their home-buying process.  Realtors, friends and family alike will probably prompt you to make lists and to constantly revise them in the hopes that before too long you will determine what you can and cannot live without, as well as what you do not want to have in your next home.

A good example is the kitchen.  Do you frequently entertain, or do you have a large family?  If you answered yes, then a modern, well-equipped and large kitchen will probably be on your list of must-haves.  But you may be willing to update a less-than-perfect kitchen as long as the size is right.  Therefore, the size of the kitchen is what will be on your list.  As you make your list, scrutinize every entry and try to be as specific as possible.

THIRD: Where Are You Looking?
Many potential buyers begin searching for their new home on the internet.  Many realtors now include home listings on their website, and there are also sites that include all of the homes listed on the multiple listing service (MLS).  Look online, but only to narrow down the specific type and style of home for which you are looking.

Once you have a good idea of the type of home that you want to purchase, contact your realtor to see what information he or she has about the homes in which you are interested.  Your realtor may have already shown some of the homes and therefore be able to provide you with information that will be useful in determining whether or not a specific home will work for you.

Drive past the homes that you are considering and make a list of those that interest you.  Then make an appointment with your realtor to see as many of those homes as possible, so that you can get a true sense of how the homes compare to one another and how they stack up against your list of must-haves.

Conclusion
By asking yourself the three simple questions above, you are well on your way to a successful home-buying experience.  Remember that your realtor is your best ally in the home-buying process, and never hesitate to ask questions or request assistance in understanding the process.  Every homeowner was once a first-time buyer. You, too, will get through the process of buying a home unscathed.  Learn as much as possible about the local market, know what you are looking for, and know exactly how much you want to spend.  Once you have made those major decisions, you can relax and have a great time looking for the home of your dreams.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

The very last thing a homeowner wants to hear is that his or her home is considered to be a hard-to-sell home.  Many different factors influence buyers and, particularly in a buyer´s market, a home that does not offer what most buyers are seeking could be considered to be hard to sell.

If you are wondering whether your home might be considered hard to sell, consider the requirements that most people have in mind when shopping for a new home:

Kitchen Size and Condition
Most buyers want to avoid the expense of updating or enlarging a home´s kitchen.  It is well known that kitchen renovations are the most costly type of renovation for homeowners.  Therefore, homes with old kitchens that lack updated plumbing and fixtures are often hard to sell.

Lot Size
Depending on your home´s location, a small (or large) lot size could be a deterrent to potential buyers.  For example, if you have a large home with a tiny lot in a neighborhood that is known for being family-friendly, your home may be the last on the block to sell if all the other homes for sale are in similar condition with similar features.  The reverse is true for small homes with large lots.  If you are selling a small home, the interested buyers may be people who are trying to downsize and avoid ongoing maintenance.  A large lot requires a significant investment of time and money in maintenance.  Therefore, your beautiful, large lot could actually be viewed as a disadvantage.

Overall Condition
If your home needs many updates and a lot of TLC and has several large projects that are obviously waiting to be completed, there is a very good chance that your home will be hard to sell.  A home with a leaking roof, rusted plumbing and a fuse box will be valued less than a similar home where these updates have already been completed.  In a neighborhood where several homes are for sale and yours is the only one in this shabby condition, your home will not sell as quickly as ? and will sell for less than ? the other homes on the market.

Odd Shape, Small Rooms
Older homes offer a certain charm and elegance, but they often also have oddly shaped rooms and a lot of wasted space.  Today´s buyers are looking for convenience and open floor plans.  Therefore, regardless of the home´s condition, if your home is older and fits this description, most realtors may consider it to be hard to sell.

Having a Hard Time Selling Your Home?
This is simply an overview of some of the reasons that a home might be considered hard to sell.  Do not immediately assume that a realtor is correct if he or she tells you that your home will not sell.  Every buyer is looking for something different, and there is bound to be that at least one buyer who thinks your home is a perfect match for his or her needs.  However, when that buyer does not surface after a few months and you need to sell you home, there are some things that you can do to get more buyers interested and to attract more realtors who can show the home to their clients.

Reduce the Price
A small price reduction may not capture buyers´ attention immediately, but it definitely will catch the eye of realtors.  People like bargains, and just as in retail settings, even a tiny discount will make them think that they are getting a good deal.  Most major brokers will advertise a home as having a “reduced price” when a seller opts to lower the asking price.  Sure, you will need to disclose the original asking price when asked, but sometimes the question is never asked. An overpriced home will be hard to sell!  If you have listed your home at a price that is considerably higher than that at which comparable homes in your neighborhood have sold, you may need to lower the price to be competitive.  Deciding to lower the price may be disheartening, but accepting a lower sale price is less expensive than continuing to maintain the home for an extra year or two in the hopes of getting your original asking price.

Make Some Updates
If your price is well within the standard market range for comparable homes, you might want to consider the benefits of making some much-needed updates.  First focus on non-cosmetic renovations.  While you may be tempted to pay a landscaping company to beautify your lawn and gardens, it would be much more cost-effective to install new flooring or update the wiring.  If your home lacks a modern kitchen and you can afford to put in a top-end gourmet kitchen, then the kitchen is the first thing to consider.  Kitchen renovations are large projects, but a home with a brand new kitchen will almost definitely sell for much more than a home with an old kitchen.  Also consider your bathrooms. Bathroom updates can be relatively inexpensive if the fixtures remain in place.  A new floor and wall tiles are relatively inexpensive in a bathroom, when compared with larger rooms.  Opt for the best possible materials and craftsmanship. Remember that you are making the updates to attract a buyer.  Therefore, you must remove your own personal taste from consideration.

Offer Buyer Incentives
Many hard-to-sell homes become more attractive to buyers simply because the seller is willing to pay all closing costs, offer down-payment assistance or offer seller-financing.  Consider the options carefully before determining whether any of these ideas might work for your situation.  Seller-financing is excellent for good buyers with bad credit, because although they may be able to afford the mortgage payments easily, they cannot obtain the necessary financing from traditional lending sources.  When you are selling a home but don´t need the sale proceeds immediately, you might want to consider offering the buyer a balloon mortgage for a few years.  Or you might want to offer continuous financing, depending on the buyer´s qualifications and your comfort level in risking default.

Not all homes are equal, and some have better sale potential than others.  When your home is one of those that lack sale potential, you must consider your options for making the home more attractive.  Although not impossible, it can be expensive to make every needed update or repair, which is why you need to learn to prioritize.

Before making any of the changes suggested above, ask for your realtor´s opinion about how you can make your home more salable.  Very few homes are un-salable.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

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As a buyer, you have probably heard over and over again how important a home inspection is in the home-buying process.  Home inspectors need to be certified and come with many good recommendations.  The security and health of your family depend on their attention to detail and ability to see things that are not visible to most other people.

When you are preparing to purchase a new home, the information provided in a home-inspection report is critical for protecting your family.  Here are the top ten findings of home inspectors, and what can be done to resolve the issues:

Inadequate Drainage
In most cases, you will realize that a home has inadequate drainage long before you purchase it.  You will probably smell dampness or see visible water damage along the walls of basement or crawlspace.  If a home inspector indicates that a home´s drainage is inadequate, you will probably need to repair or replace downspouts and gutters.  You may also need to install French drains or, in extreme circumstances, you might have to level the entire lot to facilitate proper drainage.

Out-of-Code Electrical System
This is a very common finding in home-inspection reports. The problem with bad wiring is that it presents a risk of fire and other problems, including ruined appliances and electronics. In general, an electrical system will need to be brought up to code before an occupancy permit can be issued for a home.

Leaking and Damaged Roof
A home inspector will check a home´s roof carefully to inspect the materials for aging and possible damage. In general, roofing materials can be replaced in small sections. Unless there is significant damage, a complete new roof will not be required.

Dysfunctional Heating System
A dysfunctional heating system can be a significant danger for the home´s inhabitants.  Most of the time, this sort of finding warrants replacing the heating system.  The good news for home owners is that furnace installations are relatively inexpensive. In addition, modern furnaces are much more efficient than those made in the past. A new heating system will most likely pay for itself in a few years, thanks to its lower utility costs.

Overall Poor Condition
An indication of overall poor condition means that the previous owners did not keep up on home maintenance.  Some of the indicators of poor condition might include haphazard repairs to the electrical system or plumbing, cracked walls, peeling paint, broken light fixtures, or non-working switches and outlets.  There might also be water damage or problems with the home´s foundation.

Structural Damage (Minor)
Most minor structural problems are easy to repair and do not pose a danger to the home´s inhabitants. The leading cause of minor structural damage is water damage.  Water that comes into the home through windows, doors, or cracks in the foundation will cause minor structural problems.

Plumbing Problems
A home´s plumbing should be up to code and composed of new materials wherever possible.  If a home inspector finds rusting pipes, lead-based materials, or broken fixtures, he or she will probably put these items on the home-inspection report.

Drafts
A home inspector will check to see whether the windows and doors of a home let air pass through.  If this is a problem, it can usually be fixed by re-glazing windows and applying silicone caulking around the openings.

Ventilation Problems
If a home seems to have a problem regulating moisture, chances are that the home inspector will indicate that there are ventilation problems.  This situation can be alleviated by installing fans and/or by adding windows that can be opened to bring fresh air into the home.  Attics require adequate ventilation for heat efficiency.

Environmental Hazards
Few home inspectors specialize in environmental hazards. Therefore, it is a good idea to have environmental inspectors assess the home for hidden dangers either before or after the home inspector has finished his or her portion of the inspection. Here is a list of some of the types of environmental hazards that may be present in homes:

• Lead-Based Paint: The presence of lead-based paint is extremely dangerous, yet a typical home inspector may not be able to locate the problem.  A special test must be performed to determine whether lead-based paint is present in a home.  Removing the danger involves a process through which the walls are either sealed or removed and replaced.  Lead poisoning is dangerous and can be fatal to young children.
• Radon Gas: A typical home inspector will probably not be able to detect the presence of this odorless and colorless gas that is known to cause cancer. If radon is discovered in a home, a mitigation pump will need to be installed to remove the gas.  This installation is expensive.
• Drinking Water Issues: A water test can determine the purity of your home´s water supply.  Correcting problems with the drinking water range from simple pipe replacement to the replacement of the entire home plumbing system, depending on the source of the problem.
• Leaking or Damaged Heating Oil Tanks:  A home inspector or heating system inspector should be able to spot a faulty oil storage tank.  Replacement is generally the only acceptable solution, but it is very expensive.

Conclusion
Now that you are familiar with the top ten problems that home inspectors find, you are better prepared to react to the presence of such problems.  You might be comfortable replacing a few missing roof shingles, but if the home has several of the problems described above, talk with the owners to find out how much they are willing to contribute to fix those problems.  They could offer to pay for repairs and updates directly, or they could agree to lower the home´s purchase price.

Ask your realtor for a recommendation for a local home inspector who is properly certified.  A home inspection is important for the health and safety of you and your family, and therefore the inspector should be chosen based upon the knowledgeable recommendations that you receive from others.

Knowing what to expect from a home inspection will make you a better homebuyer and a better homeowner.  Never skip the home inspection, because that would be like buying a vehicle sight-unseen.  You need to keep your family´s best interests in mind.  A home-inspection report that reveals significant problems is usually an acceptable reason for a buyer to back out of a sale.  Therefore, keep that in mind if you are unable or unwilling to do what is necessary to repair the flaws, backing out of the deal is one of your rights as a potential buyer.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

As you consider buying your first home, you undoubtedly have hundreds of questions about the process. These questions begin as soon as you start thinking about moving and continue far beyond the closing. What should I expect? How can I prepare? Am I ready to own a home?  These questions are perfectly normal and are to be expected from first-time buyers.

In order to make the home-buying process as easy and smooth as possible, you need to know exactly what to expect .  By reviewing the following information, you will be well prepared to begin the process of buying your first home.

How Much Can You Afford?
The first step in buying a home for the first time is making sure that you can afford the home you plan to purchase. Even if you haven´t already found the home of your dreams, you probably have a fairly good idea of the type of home you would like to purchase.  However, you may or may not realize how much you can actually afford to spend on housing each month.  Surprisingly, speaking to a lender about your financial situation may not be the best place to start.

Lenders look at your debt-to-income ratio and not necessarily at your day-to-day spending habits.  Therefore, they will know if you have several credit cards that are responsibly maintained and a car loan that was paid off in full last month.  But they may not realize that you opt to spend several hundred dollars each month on the latest fashions or videos.  Begin tracking where and how your money is being spent and how much of that spending can or will be curtailed when you purchase a home.

Financial Counseling and Pre-Qualification
A financial advisor can help you to assess your financial information and determine how much home you can afford to purchase.  Speak with a financial advisor before beginning the search for your first home ? and know that there is one other thing you can do to ensure that you are looking at the right homes for your price range.

Most mortgage lenders are happy to complete a pre-qualification process for potential buyers who need to find out ahead of time what size of mortgage they can qualify for.  The pre-qualification process is not a guarantee that the lender will offer you funding, but it does takes into consideration your credit score and income level in order to determine how much the lender might be willing to offer through a mortgage program.  The process will also enable you to begin comparing the mortgage programs offered by different lenders.

Shopping for Lenders
With interest rates declining, you need to make sure that lenders are giving you the most competitive mortgage options and interest rates.  Talking to several lenders will help you decide which one can best serve your interests.

Ask the lender about the details of each program that you are considering, including the closing-cost requirements, down-payment percentage, and any early-payoff costs that your might face. Mention that you are a first-time buyer, because this could potentially make a difference in the types of programs that a lender offers to you.

Once you have selected a lender, make sure that the specific mortgage program you are considering is right for your borrowing needs. I can help you find a mortgage professional if you like, I have a list of individuals that I can recommend to you  that reside in Charlotte/surrounding areas.

Here are two of the most common types of mortgage programs:

Traditional 15- or 30-Year Fixed-Rate Mortgage
This type of mortgage loan usually has a 15- or 30-year payoff (amortization) schedule.  Over the years, you make equal payments that are applied to the interest and principal in varying proportions until you completely pay off the loan.  The interest rate does not change.

15- or 30-year Adjustable-Rate Mortgage (ARM)
The ARM is declining in popularity as a result of better fixed-interest rates with traditional mortgage programs.  However, sometimes a new homebuyer will want or need to purchase a home that is more expensive than what he or she can afford at the time of the purchase.  ARMs, which come with low introductory interest rates that are almost always locked-in for the first five years, can be a good option.  After the introductory period, the interest rate becomes variable and may drop or skyrocket, changing throughout the life of the loan according to a pre-defined time schedule and market interest rates.

Finding an Agent
First-time buyers often call the listing agent for homes that interest them, but this may not be the best way to protect your interests throughout the purchase process.  When a potential buyer works with a listing agent to purchase a home that is listed by that particular agent, the result is double agency. Double agency simply means that the buyer and seller have the same agent, who represents both parties and therefore cannot release information that could harm either party.

To find an agent, consider the area in which you want to buy. A local agent will be familiar with the area and can recommend specific neighborhoods for people with your particular lifestyle.  You can also request recommendations from friends and family members.

Before signing a contract with an agent, ask about the commission rate, although this cost is generally covered by the seller´s portion of the closing expenses.

Make sure that your agent understands what you are looking for and how much you are prepared to spend on your home.  As a first-time buyer, you need to work with an agent who is familiar with programs and lenders who specialize in working with first-time buyers. Please let me be that agent. I can be reached on my cell phone at (704)840-4137. My name is Rod Potter, I can help you find a home.

First-Time Homebuyer Programs
Many programs are designed specifically to assist first-time homebuyers with benefits like down-payment assistance and no closing costs.  Others offer first-time buyers competitive interest rates designed to make borrowing easier.  First-time homebuyer assistance programs almost always apply to anyone who has not purchased a home within the past three years.  Therefore, even if you are not a true first-time buyer but you have not bought a home in the past three years, you may qualify for these programs.

Conclusion
First-time homebuyers who approach the home-buying process with adequate preparation can be some of the best customers for lenders and agents.  If you are thinking of buying a home for the first time, do your research and plan for your home purchase.  Doing so will make you an educated consumer and give you a good chance of finding the best home for the best price.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

When searching for a new home, there are certain things that are important to do including….

1) Before you start

Before you start shopping, you should Pre-qualify for a Loan. Being pre-approved for a loan determines how much house you can afford. It also allows you to move more swiftly when you find the right house, especially when you aren’t the only interested buyer. Call me, I have some GREAT contacts for this.

2) Shop for Mortgage Rates and terms

A difference of even half a percentage point can make a huge difference in how much you pay over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent is about $35 per month. Over 30 years, that’s $12,600.

3) Using a buyer agent

As your licensed NC buyer broker, I am legally responsible for representing your best interest in the real estate transaction. In doing this, I will be doing my best to make sure that you are treated fairly and get the best price on a new home as possible.

As the buyer agent, I am usually compensated by the seller at the closing table. Therefore, no money will be coming out of your pocket for my services.

4) Distance to your place of employment or family

If there is a destination that you need to go to frequently like a job or a family member, I recommend that you try to find a home that isn’t to far from that location. Needless to say, it can be quite burdensome to drive back and forth.

5) Crucial items of importance

Make a list of items that your new home “MUST HAVE”. For instance, you must have a large backyard, a basement, or a pool. In any event, those items are important to know BEFORE buying a house. There is nothing worse than buying a home and not having something that is extremely important to you  being missed.

6) Features that help or hurt resale value

In some areas, a swimming pool actually detracts from a home’s value and makes the home harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may impact the home sale and future value. As your Realtor, I will point out features that hurt, as well as those that help, resale value.

^{Feel free to contact myself for more information at (704) 840-4137 or Rod Potter at rpotter@carolina.rr.com.}