| Mortgage Rates |
National |
Average
Rate* |
| 30-Year Fixed |
4.34% |
| 15-Year Fixed |
3.86% |
| 5/1 ARM |
3.39% |
| * Conforming FNMA Loan Amount. Rates may include points.
|
Information updated: 9/03/2010
|
| | |  |
|
Realty World Related Realty Presents:
The Homebuying Guide
1. Why Do You Need a Realtor?
2.S tep by Step…The Buying Process
3. Glossary of Real Estate
Brokerage Relationships
4. The Advantages of a
Buyer’s Agency Agreement
5. How Much Home Can You Afford?
6. Predicting Your Monthly Payment (The PITI)
7. Don’t Get Swept Away When Shopping
8. Choosing the Right Neighborhood
9. Take Notes on Homes You Tour
10. Five Items We Negotiate
11. Loan Application Checklist
12. How to Choose a Good Inspection Company
13. Now we CLOSE your Transaction!
14. We’re moving!
15. Let’s Adhere to “The Plan” To Secure Your Dream Home Quickly!
16. Your Realty Team Roster
17. Glossary
Congratulations! The decision to buy your own home is an exciting one. The experience should be enjoyable as well as get you the perfect home with the least amount of hassle.
Marisol is devoted to using her expertise to make your transaction successful!
Purchasing a home is a very important decision. Marisol would like to help you with honest, accurate information so you can make well-informed decisions regarding the purchase of your home. This booklet will give you an idea of what to expect during each phase of your transaction. It also contains reference pages, note pages, deadline information, etc., and is useful as a reference guide even after the transaction is closed.
Please keep this booklet during all house hunting related activities: meetings, house hunting trips, etc. Use it to take notes and to keep track of deadlines. You can even staple cards to relevant pages to keep related materials together. Making this transaction as easy as possible for you is my job. I am happy to serve all your real estate needs!
Marisol Martinez
Realty World Related Realty Group
187 Washington Street
Easton, MA. 02356
Cell: 617-590-0773
Office: 508-328-2417 Fax: 508-328-2471
Email: marisolm.realtor@gmail.com
A Realtor brings a wealth of knowledge and experience to the business of buying a home. In fact, a licensed real estate professional provides much more than the service of helping you find the home of your dreams. Realtors are not just sales agents. They are expert negotiators, seasoned financial advisors, and superb navigators around the local neighborhood. They are members of the National Association of Realtors (NAR) and must abide by a Code of Ethics and Standards of Practice enforced by the NAR. A professional Realtor is your best resource when approaching to buy a home.
Let Marisol Martinez Be Your Guide —
• Working with Marisol can save you endless amounts of time, money and frustration.
• Marisol knows the housing market inside and out and can help you avoid many a “wild goose chase.”
• Marisol can help you with any house even if it is listed elsewhere, or is being sold by the owner directly.
• Marisol knows the best lenders in the area; she can help you get pre-qualified for a mortgage; and discuss down payments, closing costs, and monthly payment options.
• Marisol is an excellent source for general information about the community, specific information about schools, churches, shopping, transportation, plus tips on house inspections and pricing.
• Marisol is experienced at presenting your offer to the homeowner and can help you through the process of negotiating the best deal. She brings objectivity to the buying transaction, and can point out advantages and disadvantages of a particular property.
And the BEST thing is that all this help normally won’t cost you a cent. Generally, the seller pays the commission to Realtors. However, that doesn’t affect Marisol’s dedication or the spirit of teamwork that she will put into helping you find and buy the home of your dreams. After all, her success depends on your success.
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Step by Step…
The Buying Process
Find a Realtor you can trust… The First Step…
In the home buying process is to find an experienced Realtor that you can trust and sign a Buyer’s Agent Agreement. This guarantees, by the laws of the state, that your needs are met professionally and represented throughout the entire process of buying your home.
Looking for a home… The Next Step…
Is to look at various homes. Marisol is available at anytime to help you find your dream HOME.
Your
Offer Be Careful – This is a BIG Step…
When you find your dream home, you should present a competitive offer immediately. Marisol has extensive experience in contract negotiations. She will ensure you get just what you want for a fair price – a transaction in your best interest.
The
Contract We’re Starting to Jog Now …
When the seller accepts your offer, you “go under contract.” You want to make sure every detail is handled accurately and immediately. Marisol will ensure your home closes properly and on time.
Inspections You’re on the “HOME” Stretch!
Final details are handled and inspections are performed to ensure the property is “perfect” for you. Contract details are further negotiated, and we head to closing!
Now
it is
YOURS! The Next Step Will Be Into Your New Home…
Be prepared to bring your checkbook to the closing procedure – the next steps you will take will be over the threshold of your new home!
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Glossary of Real Estate
Brokerage Relationships
MASSACHUSETTS,
Real Estate brokers and their salespersons are required to disclose the type of working relationship they have with the buyers in a real estate transaction. There are several types of relationships that are available to you. You should understand these at the time a broker provides specific assistance to you in buying real estate. Buyer’s Agent and Seller’s Agent relationships are commonly referred to as “agency” relationships and carry with them legal duties and responsibilities for the broker as well as for the buyer and seller.
BUYER’S AGENT
A Buyer’s Agent acts solely on behalf of the buyer and owes duties to the buyer, which includes the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of, and act as an advocate for; the buyer. The buyer is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to sellers all adverse material facts concerning the buyer’s financial ability to perform the terms of the transaction and whether the buyer intends to occupy the property. A separate written buyer’s agreement is required which sets forth the duties and obligations of the parties.
SELLER’S AGENT
A Seller’s Agent acts solely on behalf of the seller and owes duties to the seller, which includes the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of, and act as an advocate for; the seller. The seller is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to buyers or tenants all adverse material facts about the property known by the broker. A separate written listing agreement is required which sets forth the duties and obligations of the parties.
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The Advantages of a
Buyer’s Agency Agreement
YOUR INTERESTS ARE PROFESSIONALLY REPRESENTED —
Enlisting the services of a professional Buyer’s Agent is similar to using an accountant to help you with your taxes, a doctor to help you with your health care, or a mechanic to help you with your car. So the first advantage is pretty obvious. If you had the time to devote to learning all you need to know about accounting, medicine, and automotive mechanics, you could do these services yourself. But who has the time? You probably already have a full-time career to which you are committed. This is why you allow other professionals to help you in specific areas of expertise.
Marisol has devoted her time to perfecting a career in real estate service. Continuous education, market research, and vast experience are combined with an excellent team of real estate professionals to find you the perfect home quickly. Marisol will take care of all the hassles of every day real estate transactions for you. We let you concentrate on your full-time job, while we do ours. Marisol will guide you through the home buying process and exclusively represent your interests as we help you find a home, present your contract offer, negotiate, and close!
YOU WILL GET A GREAT HOME QUICKLY AND CONVENIENTLY —
The advantage to signing a Buyer’s Agency Agreement with Marisol is that you will have a professional working to find and secure the perfect home for you exactly when you need it. It is nearly impossible to find a home that meets your needs, get a contract negotiated, and close the transaction without an experienced agent. Marisol has vast computer networks to make sure you only tour homes that meet your specific needs. You won’t need to spend endless evenings and weekends driving around looking for homes for sale or trying to search computer networks yourself. When you tour homes with your professional Buyer’s Agent, you will already know that the homes meet your criteria for bedrooms, bathrooms, garage space, square footage, neighborhood, etc. Also, your Agent will ensure you are looking at homes that are in your price range.
YOU GET A PERSONAL SPECIALIST WHO KNOWS YOUR NEEDS —
Just as your accountant, doctor, and mechanic get to know your needs through a steady relationship, your Buyer’s Agent gets to know your real estate needs and concerns. This type of relationship is built by open communication at all times and by touring homes with your Agent so she gets a good idea of your feedback and concerns about each home. If you try to jump from agent to agent, you will not receive the best real estate services possible, and you will be violating your agreement to your agent. There is nothing to gain from trying to find and tour homes on your own, and you will save a lot of time when your agent can tell you everything about any home before you see it.
WHAT IS THE BUYER’S AGENCY AGREEMENT —
Entering into a Buyer’s Agency Agreement has countless advantages and no disadvantages. When you sign the agreement, you are simply agreeing to “hire” a personal representative who, by law, must represent your best interests to the best of his/her ability. All of this personal service is available at absolutely NO COST TO YOU! The Seller’s Agent is responsible for paying your Buyer’s Agent fee. With Marisol, you get a professional devoted to protecting your needs to help you make one of the most important investment decisions of your life –- and you don’t even have to pay the fee!
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How Much Home Can You Afford?
When you are ready to begin looking at various houses to find your dream home, you need to prepare all of the necessary materials to present to the lender. Your lender will tell you exactly what you can afford so that you do not spend time looking at “too much” home. There are three key factors that you will need to consider when determining how much home you can afford. These are 1.) The down payment, 2.) Your ability to qualify for a mortgage, and 3.) the closing costs associated with your transaction.
Down Payment Requirements:
Most loans today require a down payment of between 3.5% and 5.0% depending on the type and terms of the loan. If you are able to come up with 20-25% down payment, you may be eligible to take advantage of special fast-track programs and possibly eliminate mortgage insurance.
It is often thought that bigger is better when it comes to down payments. In many cases, this may be true. However, the arithmetic will differ from case to case. A bigger down payment means smaller monthly payments and lower interest expense for as long as you remain with a mortgage. This can be an important factor for many people. But if you can put your available funds to work for you so that they can earn more than the interest rate on your loan, you could be dollars ahead with a smaller down payment. Also, a smaller down payment may allow you to keep you extra cash liquid and available for an emergency.
Closing Costs:
Don’t forget to think ahead carefully. In addition to the down payment on your dream home, you will be required to pay fees for loan processing and other closing costs. These fees must be paid in full in cash at the time of the final settlement, unless you are able to include these in your financing. Typically, total closing costs will range between 2-5% of your mortgage loan. A more detailed schedule is included herein in the section detailing your closing.
Qualifying for the Mortgage:
Most lenders require that your monthly payment range between 25-28% of your gross monthly income. Your mortgage payment to the lender includes four items….the PITI. These items are discussed in detail on the page entitled, “Predicting Your Monthly Payment (The PITI).” Remember, when you buy a home all interest is tax deductible, so you will qualify for a major tax advantage that will effectively increase your take-home pay. Your total monthly PITI and all debts (from installments to revolving charge accounts) should range between 33-38% of your gross monthly income. This is a general rule of thumb, but other key factors specifically determine your ability for a home loan. These factors are:
INCOME: History of employment, stability of income, potential for future earning, education, vocational training and background, and any secondary income such as bonuses, commissions, child support, etc.
CREDIT REPORT: History of debt repayment, total outstanding debt and total available credit. If you have concerns about your credit report, consider contacting one of the major credit bureaus for a copy of your file: TRW (1-800-422-4879), Trans Union (1-602-933-1200), and CSC Credit (1-800-759-5979).
ASSETS: Cash on hand, other liquid assets such as savings, checking, CDs, stocks, etc.
PROPERTY: The home you are buying must be appraised to determine that it has adequate value and is marketable to ensure it will secure the loan.
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Predicting Your Monthly Payment (The PITI)
Your monthly payment (PITI) is the sum of four items – the principle on the loan (P), the interest on the loan (I), property taxes (T), and homeowner’s insurance (I). To predict your monthly payment for a 30-year fixed rate loan, use the following table to determine the principal and interest part of the payment. Simply divide the loan amount by 1,000 and then multiply that figure by the appropriate interest rate factor from the table below. To that sum add 1/12th of the amount of your yearly taxes and 1/12th the amount of your yearly insurance.
For example: If your mortgage loan amount is $150,000 and the interest rate is 12%, your monthly “PI” would be:
$150,000 = 150
1,000
150 x 10.29 = $1,542.50
Then add your monthly insurance premium (approximately $25-$75) and your property tax to your principal and interest and this is your monthly payment.
PRINCIPAL AND INTEREST PAYMENT TABLE
If your interest is: Your PI Factor is:
6.00%
…………………………………… 6.00%
6.50% …………………………………… 6.32%
7.00% …………………………………… 6.65%
7,50% …………………………………… 6,99%
8.00% …………………………………… 7.34%
8.50% …………………………………… 7.69%
9.00% …………………………………… 8.05%
9.50% …………………………………… 8.41%
10.00% …………………………………… 8.78%
10.50% …………………………………… 9.15%
11.00% …………………………………… 9.52%
11.50% …………………………………… 9.90%
12.00% …………………………………… 10.29%
12.50% …………………………………… 10.67%
13.00% …………………………………… 11.06%
All property owners must pay general real estate taxes. These taxes are also called “ad valorem” taxes because the amount of the taxes varies, according to the value of your property. General real estate is levied for the operations of various governmental agencies and municipalities. Other taxing bodies may include school districts, drainage, water, sanitary, and recreation districts.
Each agency or municipality determines how much money is needed for the budget. They receive these funds through mills levied against properties in their counties. The state limits how much the mill levy can increase each year without voter approval. Each mill is equal to one-thousandth of one dollar ($.001) of assessed value or $1 for every $1,000 of assessed value.
The actual tax is calculated by multiplying the assessed value by the current mill levy. General taxes are a lien against your home as of January 1st, the year of the tax, even though they are not due until the following year.
Properties are valued or assessed by the county assessor. The land and buildings are usually assessed separately. The assessed value is approximately 12-15% of the true value (percentage value is determined by state law). If an owner feels the assessed value of their property is incorrect, they can present their objection through the local taxing authority on an annual basis.
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Don’t Get Swept Away When Shopping
When touring homes you will find that there are many beautiful homes on the market. There are two things you must do before looking at homes.
1. Find out from your lender how much you qualify to spend on the home. It is very easy to become excited about features found in homes out of your price range. Before you get your heart set on that big, tree-shaded colonial on the hill, you need to pin down your financial details. Only then will you know if you can afford Willow Crest, or if it makes more sense to aim for Shady Hollow.
2. Complete this list below. Please take a moment to decide what features are “Requirements” (location, basement, number of bedrooms, eating space, architectural style, garage, etc…) and which features are “Extras” (fireplace, walk-in closets, wet bar, pool, siding, vaulted ceilings, deck, landscaping, etc…) . There are many different features in homes that range from necessary to luxury. It is easy to get caught up in the excitement of a beautiful home loaded with amenities. It is important that you select a home that truly meets all or most of your requirements first and foremost!
As you tour homes, check back to this list to make sure the home meets your requirements. The extras should only come into play when you make your final decision between homes that meet all or most of your requirements.
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Choosing the Right Neighborhood is as Important as Choosing the Right House!
There are many factors to consider when selecting a neighborhood that is right for you. Below are just a few of the many factors -- You may think of others that are important to you. Please write them on your Requirements List so they do not get forgotten.
Neighborhoods have characteristic personalities designed to best suit single people, growing families, two-career couples, or retirees. Investigate to determine that the neighborhood in which you choose to look for a home matches your lifestyle and personality.
Neighborhood Factors to Consider --
Look for things like access to major thoroughfares, highways, and shopping. Listen for noise created by commerce, roads, railways, public areas, schools, etc. Smell the air for adjacent commerce or agriculture. Check with local civic, police, fire, and school officials to find information about the area. Research things like soil and water. Look at traffic patterns around the area during different times of the day and drive from the area to work. Is the neighborhood near parks, churches, recreation centers, shopping, theaters, restaurants, public transportation, schools, etc.? Does the neighborhood belong to a Homeowner’s Association?
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Take Notes on Homes You Tour
HOME #1 ITEM: COMMENTS:
Address
Style of home:
Subdivision Bedrooms:
Home is near: Bathrooms:
Living Room:
Fireplace:
Kitchen:
Dining Area:
Laundry Area:
Additional Rooms:
Garage:
Additional Features:
Lot: Square Footage:
HOME #2 ITEM: COMMENTS:
Address
Style of home:
Subdivision Bedrooms:
Home is near: Bathrooms:
Living Room:
Fireplace:
Kitchen:
Dining Area:
Laundry Area:
Additional Rooms:
Garage:
Additional Features:
Lot: Square Footage:
Take Notes on Homes You Tour
HOME #3
ITEM: COMMENTS:
Address
Style of home:
Subdivision Bedrooms:
Home is near: Bathrooms:
Living Room:
Fireplace:
Kitchen:
Dining Area:
Laundry Area:
Additional Rooms:
Garage:
Additional Features:
Lot: Square Footage:
HOME #4
ITEM: COMMENTS:
Address
Style of home:
Subdivision Bedrooms:
Home is near: Bathrooms:
Living Room:
Fireplace:
Kitchen:
Dining Area:
Laundry Area:
Additional Rooms:
Garage:
Additional Features:
Lot: Square Footage:
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Five Items We Negotiate
1. Price
2. Terms
3. Inclusions
4. Possession
5. Contingencies
We’ll work through all of these together!
That’s My Commitment to You!
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Loan Application Checklist
General:
Picture ID with social security number of borrower and co-borrowers.
Payment to cover the application fee.
Name and complete address of all landlords for the past two years.
Income:
Employment history for the past two years including names, addresses, phone numbers, and length of time with company.
Copies of your most recent pay stubs and W-2 forms (past two years).
Verification of other income (social security, child support, retirement).
If self-employed, you need copies of the past two years signed tax returns including all schedules, and a signed profit and loss statement of the current year. Retirees need tax returns for the past two years.
If you have rental property income, bring a copy of all lease agreements.
Assets:
Copies of all bank and credit union statements for the past three months.
Copies of all stock/bond certificates and/or the past three statements from all investment and retirement accounts.
Prepare a list of household items and their values.
Copies of title documents for all automobiles, boats, motorcycles, etc.
Face amount, monthly premiums and cash values of all life insurance policies. (Cash value may be used for closing costs or down payments. You need documentation from the carrier indicating cash value).
Creditors:
Credit cards (account numbers, current balances, and monthly payments).
Installment loans (car, student, etc.). Same details as for credit cards.
Mortgage loans (property address, lender with address, account numbers, monthly payment and balance owed on all properties presently owned or sold within the last two years). Bring proof of sale of properties sold.
Child care expense/support (name, address, and phone number).
Other:
Bankruptcy – bring discharge and schedule of creditors.
Adverse credit – bring letters of explanation.
Divorce – bring Divorce Decrees, property settlements, quit claim deeds, modifications, etc. for all divorces by yourself or your spouse.
VA only – bring Form DD214 and Certificate of Eligibility.
Retirees – bring retirement and/or Social Security Award Letter.
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How to Choose a
Good Inspection Company
Is an inspection necessary?
You have the right to request an inspection of any property you are thinking of purchasing by a professional inspector of your choice. You should always exercise your option to have the physical condition of the property and its inclusions inspected. Many of the more severe and expensive problems such as mechanical, electrical, structural and plumbing are not noticeable to the untrained eye. If repairs are needed, negotiate these in your contract offer. A professionally conducted home inspection followed by a written evaluation is becoming standard procedure in home buying because of increased buyer awareness and savvy.
Are inspectors licensed?
Since an increasing number of buyers are requesting property inspections, there has been a rapid increase in the number of people entering the inspection field; the State of Massachusetts does require testing and licensing of inspectors.
What does an inspection entail?
A qualified inspector will follow Standards of Practice in conducting their inspection. The inspection consists of a physical inspection of the home with the purchaser present, followed by a written report detailing their findings. They report on the general condition of the home’s electrical, heating, and air systems, interior plumbing, roof, visible insulation, walls, ceilings, floors, windows, doors, foundation, and visible structure. The inspection is not designed to criticize every minor problem or defect in the home. No home is perfect. It is intended to report on major damage or serious problems that require repair for the well being of the home and that might require significant expense.
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Now we CLOSE your Transaction!
What is a Real Estate “Closing?”
A “closing” is the meeting the Buyer, Seller, and their agents (optional), and representative from the lending institution and title company wherein the actual transfer of title to the property occurs. The purchase agreement or contract you have signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur. This meeting is also referred to as the settlement.
The title company transferring ownership of the property to you will prepare a new deed. Your lender will require you to sign a document, usually a promissory note, as evidence that you are personally responsible for repaying the loan. You will also sign a mortgage or deed of trust on the property as security to the lender for the loan. The mortgage or deed of trust gives the lender the right to sell the property if you fail to make the payments. Before you exchange these papers, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records.
What Should I do to Prepare for the Closing?
As previously mentioned, you should have already conducted any inspections, etc. you wish to have done on the property.
There are two kinds of title insurance. A lender or mortgagee’s title insurance policy protects only the lending institution. Lenders require this type of insurance and require the borrower to pay for it. That does not mean that the borrower will receive its protection. An owner’s policy is necessary to protect the owner against loss.
You will also be required to pay all fees and closing costs in the form of “guaranteed funds” such as a Cashier’s Check. You will be notified of the exact amount by your agent or escrow officer at closing.
What is an Escrow Account?
An escrow account is a neutral depository for funds that will be used to pay expenses incurred by the property, such as taxes, assessments, property insurance, or mortgage insurance premiums which fall due in the future. You will pay one-twelfth of the annual amount of these bills each month with your regular mortgage payment. When the bills fall due, they are paid by the lender from the special account. At closing, it may be necessary to pay enough into the account to cover these amounts for several months so that funds will be available to pay the bills as they fall due. You may also be required to refund items prepaid by the Seller. For example, if the Seller has paid the special assessments or taxes for that year, you may be required to refund the value of the months remaining the year when you take possession of the property. An escrow fee is usually charged to set up the account.
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We’re moving!
Now that you have a new address, send out all your change of address notices.
Complete your Change of Address notices and mail them to the following. Keep in mind that the post office will forward your mail for 30 days but they do expect that you are sending notices to everyone who sends you mail.
Post Office
Friends and relatives
Magazine and mail order subscriptions
Professional organizations of which you are a member
Clubs, social or civic organizations with mailings
Charge accounts, insurance carriers, and creditors
Driver’s bureau to receive tag notices
Voter Registration officials
Don’t forget the needs of your furry friends!
Do not transport your pets much farther than they have safely traveled in the past without consulting your veterinarian. To transport animals by air, you need an airline-approved animal carrier. A moving company can inform you of any state regulations for pet entry, vaccination or quarantine procedures. Ask about regulations, licenses, tags, etc. for pets. Also, do not forget to obtain a copy of your pet’s medical records.
Keep detailed records – some moving expenses are tax deductible!
Keep detailed records of all moving expenses if your move is job related. Many expenses, including house-hunting trips, are tax deductible. If your move is 35 miles or more from your home, you can deduct your family’s travel expenses, including meals and lodging; the cost of transporting furniture, other household goods and personal belongings; food and hotel bills for up to 30 days in the new city if you have to wait to move into your new home; and the costs associated with selling your old home or leasing your new home.
Note: There is a ceiling on deductions which is outlined in detail in the IRS’s Publication 521, “Tax Information on Moving Expenses,” available free form the IRS offices.
When you close on your new home, you should complete the following:
Ask your bank about electronically transferring your funds to a bank in your new area. Discuss branch options and arrange for check cashing in your new location.
Close out your safety deposit box.
Obtain travelers checks for traveling funds and for funds while you are settling into your new location.
Ask your insurance agent to transfer coverage to your new home. Make sure all coverage (life, health, automobile, personal belongings, etc.) is in force while you are en route.
Schedule a moving company to assist you or begin notifying people who are helping you of your planned move date.
Begin depleting your store of canned and frozen foods. Defrost your freezer and use charcoal to dispel odors.
Now that you have a new address, you can begin transferring or canceling home services:
Mass Electric 800-322-3223
Verizon Telephone 800-870-9999
Cable Television 888-633-4266
Bay Sate Gas 800-677-5052
United States Postal Service 800-275-8777
Make arrangements for canceling home deliveries and services such as the following. Arrange for service at your new address.
Newspaper
Cleaning Service
Lawn Service
Laundry / Diaper Service
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Let’s Adhere to “The Plan”
To Secure
Your Dream Home Quickly!
A successful real estate transaction hinges on numerous details involving deadlines that must be met so that you can move into your dream home as soon as possible.
TO DO: DATE COMPLETED:
Loan Application:
(Application fee is due at this time).
Seller’s Disclosure must be signed:
Set inspection date and time:
Written notice due – all items from the inspection that you wish to be repaired:
Negotiation of inspection repair items complete:
Title Commitment due:
Insurance: (You are required to arrange for insurance coverage and to inform your mortgage company of your agent’s name and phone number).
Loan approval:
Closing Date:
Please note: During the loan and home-buying process, you will be asked to supply documentation, respond to phone calls requesting information, schedule dates into your calendar, etc….
Please respond quickly to these requests so that your transaction does not encounter problems.
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Your Realty Team Roster
The following is a roster of the members of YOUR real estate team. Please keep this book with you throughout the home-buying process. It is also very helpful if you keep it for future reference.
Marisol Martinez
Realty World Related Realty Group
187 Washington Street
Easton, MA. 02356
Office: 508-238-2417
Fax: 508-238-2471
Marisol Martinez Cell: 617-590-0773
Emai : marisolm.realtor@gmail.com
Mortgage Companies:
MetLife Chistopher Cruise
Office :508-957-6013 Cell : 508-566-4626
HarborOne Credit Union Aguinaldo Fonseca Office: 508-895-1169
First Easter Jim Harrington Cell: 508-245-6302
Insurance Company:
Agent:
Phone:
Address:
Attorney:
Phone:
Address:
Inspection Company:
Contact:
Phone:
Financing Options
Fixed Rate Mortgage
The interest rate stays the same throughout the term of the loan - usually 15 or 30 years - so the principal interest portion of your payment remains the same. Payments are stable but initial rates tend to be higher than adjustable rate loans and often cannot be assumed by a subsequent buyer.
Balloon Mortgage
this is a loan, which must be paid off after a certain period. The advantage they offer is an interest rate that is lower than a mortgage that is made for 30 years.
Adjustable-Rate Mortgage (ARM)
the interest rate is linked to a financial index, such as a Treasury security or a cost of funds - so your monthly payments can vary up or down over the life of the loan - usually 25 to 30 years. Interest rates can change monthly, annually, or every 3 or 5 years. Some ARMs have a cap on the interest rate increase, to protect the borrower.
Other terms relating to adjustable-rate mortgages:
Adjustment period: The length of time between interest rate changes. Example: one year ARM-interest changes annually.
Cap: The limit on how 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 a 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 points a lender adds 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 up to $203,000 with no down payment. VA-guaranteed loans can be combined with second mortgages and are assumable upon qualifying by any future buyer.
FHA Loan
FHA does not lend money or make a loan; rather, it insures loans. The down payment can be as low as 2.25%. Either buyer or seller may pay discount points. FHA charges 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
The seller of the house 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
Buyer "takes over" or assumes the mortgage obligation of the seller (with concurrence of the lender). The interest rate doesn't change and is sometimes lower than current rates. Often the loan fees are less as well.
Questions for your lender:
• Are both fixed-rate and adjustable mortgage loans available?
• What is the interest rate?
• How long can I "lock-in" the financing at the current interest rate?
• Is a float down lock available in case rates drop after I have locked in?
• What are the other fees a lender may charge me in conjunction with my loan?
• Are funds for a second mortgage available?
On adjustable loans:
• How often will the interest rate be adjusted?
• Is there a maximum limit on each rate change?
• How often will the monthly payment be adjusted?
• Is there a ceiling on payment adjustments?
• Can the term of the loan be extended?
• What is the maximum rate that can be charged over the life of
the loan?
• Is there any potential for negative amortization?
• Is there a pre-payment penalty clause?
This involves extra charges for paying off the loan before maturity. About 80% of all loans in the
United States are paid off early.
• What is the "grace" period?
• How late can a monthly payment be made before a late charge
is assessed?
• What will happen if a payment is missed?
• If you sell your house, will the new buyer (if he/she qualifies) be able to assume your mortgage at the same interest rate?
Do you have to pay "points" to get your new mortgage?
Usually lenders charge points for the cost of giving you a
mortgage loan. A "point" is 1% of the loan.
• Will the lender require mortgage insurance?
• Is the loan serviced locally or is the servicing sold?
• Ask for a written "good faith deposit".
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Home Buying Glossary
Agent - A person acting on behalf of another, called the principal.
Appraisal - An expert judgment or estimate of the quality or value of real estate as of a given date.
Assessed Value - The valuation placed upon property by a public tax assessor as the basis for taxes.
Bill of Sale - An instrument which transfers title to personal property (chattels); a "Deed" transfers'' real property.
CC& R's: Covenants, conditions and restrictions- A document that controls the use, requirements and restrictions of a property.
Certificate of Reasonable Value (CRV) - A document that establishes the maximum value and loan amount for a VA guaranteed mortgage.
Certificate of Title - A document signed by a title examiner or attorney stating that the seller has a good marketable and insurable title.
Closing Statement (Settlement) - The computation of financial adjustments between buyer and seller as of the day of closing a sale to determine the net amount of money which buyer must pay to seller to complete purchase of the real estate and seller’s net proceeds. Also, "settlement sheets," "HUD-1."
Commission - Payment to a real estate broker for services performed.
Condominium - A form of real estate ownership where the owner receives title to a particular unit and has a proportionate interest in certain common areas. The unit itself is generally a separately owned space whose interior surfaces (walls, floors and ceilings) serve as its boundaries.
Contingency - A condition that must be satisfied before a contract is binding. For instance, a sales agreement may be contingent upon the buyer obtaining financing.
Deed - A formal written instrument by which title to real property is transferred from one owner to another. Also, "conveyance".
Deed of Trust - Like a mortgage, a security instrument whereby real property is given as security for a debt. However, in a deed of trust there are three parties to the instrument; the borrower, the trustee, and the lender (or beneficiary).
Due-On-Sale Clause - An acceleration clause that requires full payment of a mortgage or deed of trust when the secured property changes ownership.
Earnest Money - The portion of the down payment delivered to the seller or escrow agent by the purchaser with a written offer as evidence of good faith.
Equity - The interest or value which owner has in real estate over and above the debts against it. (Sales Price - Mortgage Balance - Equity).
Escrow - A procedure in which a third party acts as a stakeholder for both the buyer and the seller, carrying out both parties'' instructions and assumes responsibility for handling all of the paperwork and distribution of funds.
Federal National Mortgage Association (FNMA) - Popularly known as Fannie Mae. A privately owned corporation created by Congress to support the secondary mortgage market. It purchases and sells residential mortgages insured by FHA or guaranteed by the VA, as well as conventional home mortgages.
Fee Simple - An estate in which the owner has unrestricted power to dispose of the property as he wishes, including leaving by will or inheritance. It is the greatest interest a person can have in real estate.
Fixture - What was formerly personal property, which is now permanently attached to real property and goes with the property when it is sold.
Graduated Payment Mortgage - A residential mortgage with monthly payments that start at a low level and increase at a predetermined rate.
Hazard Insurance - Protects against damages caused to property by fire, windstorms, and other common hazards.
Home Inspection Report - A qualified inspector's report on a property's overall condition. The report usually includes an evaluation of both the structure and mechanical systems.
Home Warranty Plan - Protection against failure of mechanical systems within the property. Usually includes plumbing, electrical, heating systems and installed appliances.
Joint Tenancy - An equal undivided ownership of property by two or more persons. Upon the death of any owner, the survivors take the decedent's interest in the property.
Lien - A legal hold or claim on property as security for a debt or charge.
Listing Contract - Between a home owner (as principal) and a licensed real estate broker (as agent) by which the broker is employed to market the real estate within a given time for which service the owner agrees to pay a commission. Also, "listing agreement".
Loan Commitment - A written promise to make a loan for a specified amount on specified terms.
Loan-To-Value Ratio - The relationship between the amount of the mortgage and the appraised value of the property, expressed as a percentage of the appraised value.
Market Value - The highest price which a buyer, ready, willing and able but not compelled to buy, would pay, and the lowest price a seller, ready, willing and able but, not compelled to sell, would accept. Basis for "listing price'', or "asking price".
Mortgage - A lien or claim against real property given by the buyer to the lender as security for money borrowed.
Mortgage Life Insurance - A type of term life insurance often bought by mortgagors. The coverage decreases as the mortgage balance declines. If the borrower dies while the policy is in force, the debt is automatically covered by insurance proceeds.
Mortgage Note - A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of indebtedness, and states the manner in which it shall be paid. Also, "deed of trust note."
Origination Fee - A fee or charge for work involved in evaluating, preparing, and submitting a proposed mortgage loan. The fee is limited to 1 percent of FHA and VA loans.
Negative Amortization - Negative amortization occurs when monthly payments fail to cover the interest cost. The interest that isn't covered is added to the unpaid principal balance, which means that even after several payments you could owe more than you did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results in monthly payments that aren't high enough to cover the interest.
PITI - Principal, interest, taxes and insurance.
Planned Unit Development (PUD) - A zoning designation for property developed at the same or slightly greater overall density than conventional development, sometimes with improvements clustered between open, common areas. Uses may be residential, commercial or industrial.
Point - An amount equal to 1 percent of the principal amount of the investment or note. The lender assesses loan discount points at closing to increase the yield on the mortgage to a position competitive with other types of investments.
Prepayment Penalty - A fee charged to a mortgagor who pays a loan before it is due. Not allowed for FHA or VA loans.
Principal - This word has several meanings:
a) to denote the most important;
b) a capital sum lent on interest;
c) one who appoints an agent to act on their behalf;
d) either party to a contract.
Private Mortgage Insurance (PMI) - Insurance written by a private company protecting the lender against loss if the borrower defaults on the mortgage. Prorate - To allocate between seller and buyer their proportionate share of an obligation paid or due. For example a prorate on real property taxes, fire insurance, or condominium fee.
Purchase Agreement - A written document in which the purchaser agrees to buy certain real estate and the seller agrees to sell under stated terms and conditions. Also called a sales contract, earnest money contract, or agreement for sale.
Realtor - A real estate broker or associate active in a local real estate board affiliated with the National Association of Realtors.
Regulation - The set of rules governing consumer lending issued by the Federal Reserve Board of Governors in accordance with the Consumer Protection act.
Survey - A map or plat made by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries, and its relationship to surrounding tracts of land. A survey is often required by the lender to assure a building is actually sited on the land according to its legal description.
Tenancy in Common - A type of joint ownership of property by two or more persons with no right of survivorship.
Title Insurance - Protects lenders and homeowners against loss of their interest in property due to legal defects in title.
Title Search or Examination - A check of the title records, generally at the local courthouse, to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims.
Transfer tax - State tax, local tax (where applicable) and tax stamps (in some areas) required by law when title passes from one owner to another.
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