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Knowledge and experience are the keys to successful real estate transactions.
Working as your agent, I can provide you with an enormous amount of valuable information. Such data, combined with my expertise, experience and training, can be an essential key to your success.
One of the keys to making the home buying process easier and more understandable is planning. In doing so, you'll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the home buying process.
12 Steps to Financing Your New Home
1. Find a lender. Ask friends, family or co-workers for referrals; speak with local real estate agents; search the Internet.
2. Fill out a loan application.
3. Get an estimate of closing costs from the lender you choose. By law, the lender is required to provide this statement to you within three days of receiving the loan application. Make sure to ask what type of loan program your lender has selected for you, including the rates, terms and any special information, such as prepayment penalties.
4. Compare costs, fees and terms of loans if you are working with more than one lender.
5. Negotiate fees. Sometimes you can negotiate the amount of fees or loan points (a point is 1 percent of the loan amount) the lender charges you.
6. Consider lowering your interest rate by paying more points. The relationship of interest rate to points paid is an inverse one; the more points you pay, the lower the interest rate.
7. Provide required documentation.
8. Pay any up-front fees. Sometimes the lender requires that the appraisal, or processing fee be paid at the beginning.
9. Review loan papers. Approximately one week prior to closing, loan papers will be ready for your review. Make sure the loan matches the original quote you were given.
10. Sign your loan papers and your down payment funds into your account four to six days prior to closing.
11. Bring a cashier's check for the down payment to the title company, escrow company or attorney handling the closing. The lender will send the title company a check for the loan amount.
12. Get ready to congratulate yourself! Once the transaction closes and you have signed off on all contingencies, you will receive a copy of the deed and a set of keys, and you then own the home!
If you have your home on the market to sell, you have a number of options, which include having the buyer become approved through a qualified lender, or financing the buyer yourself. Sometimes, people want desperately to buy a home but due to poor credit or low down payment, they find it impossible. However, these challenges do not mean the people are bad buyers, just not in a good position.
Although financing buyers is not for everyone, you might find yourself in the position to offer this option to a couple wanting to buy. When you offer financing options, you are giving the buyer the opportunity to work based on their terms. In addition to creating a chance for you to sell your home quickly, it could also be a more profitable solution for you. The types of loan programs available are varied just as with traditional financing.
For instance, if you have a buyer that plans to stay in the home for at least seven years, someone interested in a traditional type of mortgage, then perhaps a 10-/15/20/30 Fixed Rate Mortgage, Adjustable Rate Mortgage, or Jumbo loan would work. Just remember that the difference with buyer finance and lender finance is that you are actually securing the loan for the buyers.
Because you are putting yourself out with some risk, this type of process requires strict contracts with consequences written in stone. Typically, buyers that have the seller finance are grateful for the opportunity to own a home and will do everything possible to do things the right way. Unfortunately, sometimes these arrangements do not work out as anticipated. Therefore, to protect yourself, you and the buyer need to work with an attorney and reputable lender so there are no misunderstandings.
By financing a buyer, you have the chance to add on money, which means you make a little more profit while also providing the buyer a chance of becoming a homeowner. For most, the situation is win-win. Keep in mind that if you are the buyer in this circumstance, you want to make sure you work with an honest person and that you understand all the requirements that would be placed on the contract. The key in most cases is working with a good lender that will provide the seller with a great loan and low interest rate, which ultimately can offer a better savings for the buyer.
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