House Buying Tips

[Silent_Boy]

zillowdotcom

[Silent_Boy]

there are lot of charges other then downpayment.   nenu kuuda initial steps lo unna

[k2s]

there are lot of charges other then downpayment.   nenu kuuda initial steps lo unna

tell us those other steps man..... it might be useful for others 

[Silent_Boy]

closing costs 2-3% on home price

loan points 1-2% on home price

home insurance.  Need to buy before closing loan

title insurance. Need to complete before closing loan.

 

 

Let me find out the more info and paste it here...

[Silent_Boy]

some mortgage terms:

 

re you proud of being a bit “conventional” in life? Well, in the mortgage business, “conventional” can equate with “expensive,” not conservative.

Do you always want the “premium” product? Well, in the mortgage business, premium equates with “expensive,” not necessarily better.

To win in the mortgage world, you have to understand the basic mortgage language. So, spend a few minutes here and learn to speak another language! Rather than being in alphabetical order, these terms are presented in the order you will probably hear them. (Later, we even give you more definitions in our Glossary. And many of our web pages give you definitions also).

Mortgagor

You, if you're getting the mortgage.

Mortgagee

The lender.

Pre-qualification

This is an informal opinion a lender gives you about your ability to borrow money. Unfortunately, many lending institutions use pre-qualification as an often meaningless promotional gimmick to entice you into using their product. DCU has a pre-qualified process, but we do our best to make sure the pre-qualification is as close to “pre-approved” as we can make it.

Pre-approved

A pre-approval is more meaningful. A pre-approval tells you the maximum the lender will give you. It usually is conditional upon the appraised value of the home you are buying, a title search, and other property-related issues. The credit-related issues have been resolved. Some lenders charge you hundreds of dollars for a pre-approval. At DCU, pre-approvals are free.

FHA and VA

These are governmental agencies with programs that may help you obtain an easier or cheaper loan. Read on.

FHA loans

The Federal Housing Authority was formed to help persons with lower income buy a home. If you qualify for an FHA loan, your mortgage company may accept a smaller down payment. It may have a lower interest rate, but often a conventional mortgage is just as good (if not better). We'll tell you if you qualify for an FHA loan. The FHA doesn't make loans itself, it guarantees that you will pay your loan.

VA mortgage loan

If you are on active duty, are a former spouse of a person in the military, or are a veteran – and if you're eligible, a Veteran's Administration (VA) loan can be a good choice. VA mortgages don't require any down payment as long as the value of the house is within certain limits. The paperwork on these can be daunting, but we handle the application process for you. We even provide an online application.

Conventional mortgage

A mortgage loan not insured by a government agency like the VA or FHA. Depending on the lender, conventional loans can be more expensive or about the same. What makes a mortgage conventional? Usually two things: you're making at least a 5% down payment, and/or your mortgage is too big for the government to insure. The maximum size for FHA and VA mortgages usually changes yearly.

Conforming mortgage

You want one of these if your situation allows. A conforming mortgage loan falls within the loan limits set by a government-sponsored agency – either Freddie Mac or Fannie Mae. The advantage of a conforming loan? You'll generally get a cheaper interest rate.

Freddie Mac and Fannie Mae

Freddie Mac is short for Federal Home Loan Mortgage Corporation. Fannie Mae is short for Federal National Mortgage Corporation. They are private companies, chartered and subsidized by the federal government to provide lenders a source of funds to make mortgages. Freddie Mac and Fannie Mae set standards for mortgage loans, purchase mortgages, and resell an interest in them to investors. We'll do our best to make sure your loan follows Freddie Mac/Fannie Mae guidelines. Mortgages that follow them are usually cheaper.

Non-conforming mortgage (also called a Jumbo loan)

A loan that exceeds the loan amount guidelines of either Fannie Mae or Freddie Mac. The amount varies. You pay a higher rate for a jumbo or non-conforming loan. And you'll probably have to pay more than the normal five percent down.

Points

A “point” (the singular use of the word) is simply one percent of any loan. A point may sound small, but can be so large. If you're getting a $260,000 mortgage, a point is $2600.

The number of points charged varies with interest rates. The more points you agree to pay at a given lender, the lower the interest rateon the mortgage. That's the reason points used like this are referred to as “discount points.” A lender might say “we'll give you a 7% loan with no points, an 6.75% loan with one point, or an 6.50% loan with two points.” Of course, they aren't giving you the points, you are giving them the points.

Virtually all lenders will charge you an origination fee. This is typically one point or 1% of the loan amount. This fee compensates the lender for the costs of processing and opening the loan. When most lenders advertise points with their rates, including DCU, any origination fee points are included with the discount points. Make sure your lender does before you apply! Some lenders will only advertise the discount points to make their deal look better than it is. You could get an expensive 1% or higher surprise in your closing costs.

How do you know if you should take a lower rate, or pay the points? Generally speaking, if you plan to keep a loan for a long time, you are usually better off to take the lower rate and pay the points. If you're planning to sell your home in the next five years or so, you're better to take the higher rate. Mortgage interest is one of the few remaining tax deductions. Points when you buy a home are deductible the year you buy. Points you deduct when you refinance must be amortized or spread out over the life of the loan.

How do you know what's best in your specific circumstance, higher rates or points? Ask us. Tell us your plans for the future, and we'll recommend interest rate structure options that will probably be best for you.

Assumable mortgage

An “assumable” mortgage means a person with approved credit can assume your mortgage (take over making your payments and responsibility for the loan) when you sell your home. This feature is a thing of the past thanks to the savings and loan debacle of the eighties. Assumable mortgages played a big role in the failure of savings institutions. The government and lending institutions have virtually done away with assumable loans.

Contingency clauses, contingencies

Read this carefully. Contingencies aren't part of the mortgage itself, but are certainly part of the loan process. Contingencies are conditions that have to be met before a contract can be enforced. Say, for instance, you're making an offer on a home, getting ready to write a check, but you're not yet approved for a mortgage. You haven't had a pest (insects and rodents) inspection done yet, and you want to make sure the home is in good structural condition. Being a smart buyer, you make the seller put clauses in the contract which say you don't have to honor it (and do get your deposit back) if, for example:

• you can't get approved for a mortgage;

• you can't get the interest rate you were quoted;

• there are termites in the woodwork;

• there's a high level of radon gas in the house.

Contingency clauses can also work in your favor if you're a seller, of course. For instance, you might insert a clause in your contract saying any buyer must be able to close the sale within 90 days or the contract is void. Some contingencies are provided by law in certain states.

Surveys

A survey is a check of the boundaries of a parcel of land property and the size and position of any permanent structures on the property. A full survey involves measurement of the property by a licensed surveyor using specialized measuring equipment to precisely locate property lines. The surveyor may also drive metal stakes in the ground at all corners to permanently mark the lines. Drawings are prepared from this process. Such a drawing when recorded with a government agency that maintains land records is called a plat. Surveys don't tell you what a piece of property is worth.

The survey done at time of home purchase is not a full survey and may not be thorough enough to detect potential property line disputes. The surveyor typically makes a simplified copy of the recorded plat and does a quick visual check of the property. 

Appraisal

What a piece of property is worth. The only appraisal worth anything is called a Certified Appraisal. In many states, “Certified” means the appraiser is licensed. It also means the lender will accept the appraisal as the true value of a specific piece of property. Lenders typically have regular relationships with outside appraisers or have appraisers on staff.

The appraisal is important for a variety of reasons. The home buyer wants the appraisal to come in above the selling price. That indicates they negotiated a good deal and reduces the percentage of the value they'll need to finance. A real estate agent will want the property to appraise at or above the selling price so it will not interfere with the sale. A home buyer may need to increase their down payment if the home appraises below the selling price or try to renegotiate the price with the seller. Lenders and investors who buy mortgages want a realistic appraisal to ensure sufficient collateral value in case of foreclosure.

Escrow accounts

There are two kinds. The first is before a sale. In this case, an escrow account is established by neutral third parties to hold money for a seller or buyer. Your down payment or earnest money can go into an escrow account. Some people call these Impound Accounts.

The second type of escrow account occurs after the sale. If your down payment is less than 20% of the home's value, your lender will typically require an escrow account. An amount will be added to your monthly payment to cover property taxes and property insurance. This amount goes into the escrow account. The lender will pay those bills on your behalf from that account. Escrow accounts typically pay interest or dividends on any balance.

Earnest money

A payment that shows you're serious, and not just a “shopper.” This amount is credited to you at closing.

Fully-indexed rate

Another really important term for you to understand, if you are a borrower. We're going to tell you about Adjustable Rate Mortgages in a minute, but first you need to understand the importance of “fully indexed rates.” The fully indexed rate is the true interest cost of an Adjustable Rate Mortgage.

Some mortgage lenders quote you a promotional interest rate to get your loan, but gloss over the fact that the “fully indexed” rate is dramatically higher. We won't let this happen to you, if you're dealing with DCU.

Teaser rate, introductory rate

The “promotional” rate we just mentioned. These rates often deceive borrowers into thinking rates will stay low. Don't pick a mortgage based on the teaser rate. The rate will go up.

Prorations, prorated fees

If the present owner has paid the property taxes or other fees for the year, but you're closing on the house in the 8th month, you are generally responsible for reimbursing the seller back four months of those taxes and fees. Since you are assuming ownership of the property for the last four months of the year.

Some prorated fees, for example, charges for a home security service can be negotiable.

Closing costs

Fees the lender collects for processing a mortgage, plus title costs and prepaid items (taxes and insurance). Closing costs can vary wildly. They are almost always paid by the buyer, but sometimes sellers are willing to pick up some of the cost. This can be negotiated between buyer and seller. A caution: many real estate transactions regularly fall apart over the issue of who will pay closing costs. For instance, if you're buying a very hot property, a seller may refuse to pay certain costs because the seller knows another buyer is in the wings. You have a perfect right to negotiate these costs, but make sure that negotiation doesn't become a “deal breaker,” unless you intend it to be.

Closing

The day you've been waiting for! It's the day you take ownership. At this point, we hope you'll be thanking us for the good help of StreetWise for Homebuying and Mortgages.

 

[Silent_Boy]

Closing Costs

Closing Costs are the expenses over and above your down payment that most buyers normally face when it comes time to close a loan. And these costs generally are not included in your loan amount. Closing costs are therefore usually out of pocket money. And although you can do your best to get the other side to pay the closing costs, you'd better understand what's included in that very loose term.

When you refinance an existing mortgage, you can often finance some or all of your closing costs by adding them to the loan amount. It usually depends on how much equity you've built up in the property. Doing this reduces your out of pocket expenses at closing. However, financing closing costs reduces the benefits of refinancing because you will be paying interest on your closing costs for the life of the loan.

StreetWise Tip: If you are considering a mortgage with no points and no closing costs, look carefully at the conditions. Some programs may be loaded with penalties. Be particularly wary of television and web ads from mortgage companies making no closing costs and no points promises.

We tell you here in advance exactly what we charge for these fees. Most lenders don't do that. In general, closing costs at DCU run $1,700 to $2,700 excluding any points. Any dollar amounts we refer to in this section are accurate at the time of publication and are subject to change without notice.

Lender's Fees

Lender's fees are one of the more common areas of abuse and it's often difficult to find out what you'll be charged until after you apply and get deep in the process. There are thousands of dollars at stake. Learn about these fees and get answers from lenders before you getstuck.

• Loan origination fee – A fee charged by lenders to procure your mortgage loan. Virtually all lenders, including DCU, charge an origination fee. It's an important source of income for us and helps cover our operational costs. The industry standard for Loan Origination Fees is 1% of the loan amount, though many lenders charge more. DCU charges the industry standard 1% of the loan amount.

• Discount points – Depending on the mortgage rate option you choose, you may have discount points. An example would be an 8% rate with 1 point versus a 7.5% rate with 2 points. The combination you select will depend on your available budget for closing costs and the number of years you expect to have your mortgage. We'll help you make the choice that's best for you.

  When most lenders advertise points with their rates, including DCU, the total points includes any origination fee points and discount points. Make sure your lender does before you apply! Some lenders will only advertise the discount points to make their deal look better than it is. You could get an expensive 1% or higher surprise in your closing costs.

• Appraisal fee – An independent written opinion that identifies the property's market value. This document is generally required either by the lender's regulator or if the loans are to be sold by the lender into the secondary market, which most are. The fee can vary widely depending on the type and location of the property. For homes located in urban areas, this fee usually runs $250.00 to $550.00. DCU requires an appraisal on all mortgage loans and only charges you our actual cost for the appraisal. Lenders are required to provide borrowers a copy of their appraisal.

  A detailed appraisal will typically include photographs of the property and comparable properties in the area. Tax assessments and recent sales data for the property and comparable properties will be included. The appraiser will also look inside the home. If the mortgage will be relatively small, the lender may require a less detailed appraisal, often called a drive-by appraisal. Here the appraiser visits the property without a detailed physical inspection. These are less expensive for the lender.

• Credit Report – A document summarizing the applicant's history of repaying debts. The cost of mortgage credit reports can vary depending on the source. A credit report is required for all mortgage loans. DCU only charges the borrower the actual cost of the report – $20.00 to $44.00. Many lenders add profit to this cost.

• Mortgage broker fees – Fees paid to individuals who produce mortgage loans for lenders, usually an independent contractor. Mortgage brokers are paid a portion of the premium pricing earned (check the glossary for a definition of premium pricing). DCU will never charge you a mortgage broker's fee.

• Tax-related service fee – A fee required by lenders to cover the cost of annually researching tax records to insure that the borrower is current on their property tax payments. DCU charges $60.00 to $99.00 to cover the cost we incur.

• Application fee – One-time fee to take your mortgage loan application. This fee helps offset costs to process the application. It is typically not refundable if the borrower cancels the loan request after the lender has already invested time and money in processing the application. DCU charges $300.00, which is much less than many lenders.

• Processing fee – One-time fee to process your mortgage loan application. Like the loan origination fee, this helps offset operating costs to bring a mortgage from application to closing. DCU charges $200.00, which is much less than many lenders. If someone offers you a lower fee, they may be making up the difference by adding so-called junk fees.

• Underwriting fee – A fee charged to review and approve the mortgage application. DCU does not charge this fee.

• Flood certificate – Fee charged to obtain the required government document used to determine whether the subject property is located in a flood plain. DCU only charges for our cost.

Items You Will Generally Pay in Advance

• Private Mortgage Insurance (PMI) – If your loan is more than 80% of the value of the property (meaning your down payment is less than 20% of the appraised value), lenders require PMI. It insures the lender if the proceeds from a foreclosure are not adequate to satisfy the remaining mortgage balance. For certain loans, like FHA, this premium is paid in a lump sum at closing. For most conventional loans, this premium is paid monthly into your escrow account.

• Hazard insurance premium – This is the annual premium for your homeowner's insurance.

Reserves Deposited with Lender

• Hazard insurance premiums – In addition to the annual premium collected at closing, the lender collects an amount equal to two months of hazard insurance as a buffer for any possible increases in premium. These funds are collected monthly along with the mortgage payment and held in an account until the lender receives, and pays, the bill for the hazard insurance. DCU does not require this for mortgages we service (currently all loans we write).

• Mortgage insurance premium reserves, School tax, Taxes and assessment reserves, Flood insurance reserves – the lender usually collects an amount equal to three months of estimated taxes as a buffer for any possible increases in tax rates or property values. These funds are collected monthly along with the mortgage payment and held in an account until the lender receives, and pays, the tax bill. DCU does not require this for mortgages we service (currently all loans we write).

Title Charges

• Closing or escrow fee, document preparation fee – These are fees collected by the title company or attorney handling the closing. The funds are collected and paid as part of the transaction. DCU only charges what our closer charges us and we negotiate the lowest possible fee for our members.

• Notary fees – DCU does not charge a fee for a notary in most states. Where we must pass those costs along, we only charge what our closer charges us and we negotiate the lowest possible fee for our members.

• Attorney fees – Fees paid to an attorney to prepare the closing documents. In many states, an attorney is required to prepare documents in any real estate lending transaction. Again, DCU only charges you our cost and we negotiate the lowest possible fees – $450.00 to $680.00 is typical.

• Title insurance – Provides insurance to owners of real estate to insure that they have clear title to the property they are buying, subject to any exceptions contained in the policy. Title insurance also insures the lender that they have an enforceable lien on the property, subject to any exceptions on the policy. No lender would originate a mortgage without title insurance. Title insurance rates are generally regulated by state Departments of Insurance.

• Tax deletion – Fee to pay the title companies to determine that all current and prior years' property taxes are paid. Again, DCU only charges what we are charged for this assessment.

Government Recording and Transfer Fees

• Recording fees – Fee charged by the county to record the Deed of Trust or any other legal documents in the real estate loan transaction. DCU only charges our cost.

Additional Settlement Charges

• Pest inspection – Required for a FHA loan by the government or possibly by the underwriter/investor as a condition of the loan. DCU only charges our cost of the inspection.

• Survey – Covers a check of the boundary lines of the property and the location of permanent structures by a surveyor and a drawing outlining the exact dimensions of the property. May be required by the title company to establish clear title for a purchase or refinance anytime improvements (such as deck, fence, pool, etc.) have been done since the last survey.

  •  

[Silent_Boy]

don't worry much after reading all those steps.   buyers kante sellers ki inka ekkuva headaches untai ata...

 

So just find a good mortgage agent/broker for you and he will take care everything.  

 

 

[@Shadow@]

EE dabbu unnollu unnare!!! 

 

@3$% @3$%

[Nisacharudu]

ie step 2. take like 6 months lo 20% ki ready chesukoo 

is it possible vuncle??

[k2s]

don't worry much after reading all those steps.   buyers kante sellers ki inka ekkuva headaches untai ata...

 

So just find a good mortgage agent/broker for you and he will take care everything.  

thanx man....gp

[k2s]

is it possible vuncle??

yes man....6 yrs ayindi naadi still not possible yet for me

[Potugaadu]

new house or  used?

 

new ayithe mundu agreement seskuni vaadi ready avvadaaniki time teesukuntaadu..ee lopu super saving cheskunte downpayment ki nadichipoddi

 

used ayithe downpayment dabbulu ready seskovaali

 

20% suggested

 

but u can just put 3.5% down and get fha loan

 

penfed or some credit unions better

 

kaasta credit report and all payments manchigaa undetlu soosko

[hyderabadgreat]

GC unte teesukovachu...H1 ante inko saari alochincali ...

[k2s]

new house or  used?

 

new ayithe mundu agreement seskuni vaadi ready avvadaaniki time teesukuntaadu..ee lopu super saving cheskunte downpayment ki nadichipoddi

 

used ayithe downpayment dabbulu ready seskovaali

 

20% suggested

 

but u can just put 3.5% down and get fha loan

 

penfed or some credit unions better

 

kaasta credit report and all payments manchigaa undetlu soosko

 

 

GC unte teesukovachu...H1 ante inko saari alochincali ...

thanx guys

[BhagatSingh]