Hometown Real Estate
Buyers Page
Some good questions to ask when buying a home
We want you to have the home you want! Following are is a list of criteris you should consider when searching for a home.
What's most important to you? Urban? Suburban? Rural? View? Waterfront? Acreage?
What are your specific needs?
When do you want to move in? It will take 30 to 45 days to "close" your transaction, (less if you have been pre-approved for a mortgage). Do you need to sell your present home? Do you have a lease? You may get the keys to your new home at "closing" however, the seller of the home you purchase may request some time to remain in the property after closing.
Home Style
Ranch, Bungalow, English, English Tudor, Georgian, Colonial, Cape Cod, 2 Story, Split Level, California Ranch, Condo, 2 Flat, 3 Flat, 4 Flat, Apartment Building, Townhouse, Duplex. click here for a catalogue of home styles.
Present Home
What do you like about your present home that you want to have in your next home?

What don't you like about your present home?

How would you like to change your present home?

Are there any special features you'd like to have?

Lifestyle: What recreational activities you you enjoy? What's important to your family?
Financing Options
When condisering your Financing Options, we need to consider how much mortgage you will qualify for. A basic rule of thumb is: The monthly payment and other debts should not be more that 36% to 38% of your gross monthly income.
Fixed Rate Mortgage
In a fixed rate mortgage the interest rate stays the same throughout the term of the loan -- usually 15 or 30 years -- so the principal interest of your payment remains the same. Payments are stable but initial rates tend to be higher than adjustable rate loans.
Balloon Mortgage
A Balloon Mortgage must be paid off after a certain period. The payments will be calculated as if the loan would be fully paid in 15 to 30 years but you must pay it of before that time, usually 7 to 10 years. The loan will still have a balance and you will need to pay it off or re-finance to cover the balance due to the bank.
Adjustable Rate Mortgage (ARM)
In an Adjustable Rate Mortgage (ARM) the interest rate is linked to a financial index, such as the Treasury, Securities, or Cost of Funds, so your monthly payments can vary over the life of the loan. Interest rates can change monthly, annually or at specific periods (every 3, 5, 7, or 10 years) Some ARM's have a cap on the interest rate increase to protect the borrower.

Here are some important terms relating to adjustable rate mortgages:

ADJUSTMENT PERIOD: The length of time between interest rate changes. Example: In a one year ARM, the interest changes annually.

CAP: The limit on home much an interest rate or monthly payment can change at each adjustment or over the life of the loan.

CONVERSION CLAUSE: A provision in some loans that enables you to change an ARM to f fixed rate loan, Usually after the first adjustment period. This may require additional fees.

INDEX: A measure of interest rate changes used to determine changes in the loan's interest rate over the term of the loan.

MARGIN: The number of percentage pints a lender ads to the index rate to calculate the ARM's interest rate at each adjustment.
VA Loan
The VA does not lend money, it guarantees a portion of the loan so that lenders who originate the loan feel comfortable with their risk. Qualified veterans can obtain loans with no down payment. VA guaranteed loans can be combined with second mortgages and are assumable upon qualifying by any future buyer.
FHA Loan
The FHA does not lend money or make a loan; rather, it insures loans. The downpayment can be as low as 2/25%. Discount points may e paid y either buyer or seller. FHA charger a 2.25% up front Mortgage Insurance Premium (or as little as 2% for a first time home buyer) that can be financed in the mortgage amount or paid in cash (no premium is required for condominiums). The borrower must also pay an annual Mortgage Insurance Premium or .5% which is collected monthly.
Seller Assisted Second Mortgage
With a Seller Assisted Second Mortgage, the seller lends the buyer enough to make up the difference between the purchase price and the down payment plus first mortgage balance ( a commercial lender may also make this kind of loan). The terms including the interest rate, are based on buyer/seller agreement. It is often a short-term (5 to 15 year) loan; sometimes "interest only" payments until the term date when the balance is due in full. A buyer can then refinance the home.
Assumable Mortgage
The Buyer "takes over" or assumes the mortgage obligation of the seller (with the permission of the lender). The interest rate doesn't change and is sometimes lower than current rates.