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Budgeting to buy a home
Dear Valued Client,
I have enclosed some suggestions that will help and protect you in
the process of buying a home. Also, included
is information on budgets. I’m sure most of you have financial
advisers or accountants steering you in the right direction for
financial freedom, however, if you’re like most of us, even
mentioning the word “budget” can make you quiver. Similar to the
word “diet”, it seems to suggest that you are about to deprive
yourself of what you really want. The questions is: what do you
really want? If it is a desire to get ahead of the game and have a
surplus at the end of each month, then read on and empower yourself
with the knowledge to make it happen.
Treat your savings like an expense.
On the reverse side of the Item of Value is a form for working on
your personal budget. It is a blueprint for financial freedom.
I hope you enjoy this months articles and find them useful! Please
call me anytime with any questions or needs.
For example, many of you have requested the value of your home or
the selling price of your neighbor’s home
that recently sold. My service doesn’t end with the transaction.
Please keep me in mind if you hear of anyone looking to buy or sell
a home. It’s referrals, from people like you,
that my business depends upon.
8 Tips for Protecting Yourself When You Buy a House
Low mortgage interest rates and a strong underlying demand for
investing in housing continues to drive demand and sales upward
the first half of 2004.
What this means if you’re buying during this hot market you will
need to do everything you can to protect yourself as you make
offers, obtain your loan, buy insurance, and strike up
contracts.
• Get pre-approved for a loan. With competition fierce, you’ll
want to be ready to make an offer. With a pre-approved loan,
you’ll have more clout as the seller considers your offer.
• Make sure it’s in writing. Don’t settle for verbal agreements.
If the seller says he’ll replace the carpet or leave his washer
and dryer, get it in writing.
• Get a good-faith estimate. Your mortgage lender is required to
provide you with a good-faith estimate of closing costs within
three days of receiving your application. They need to provide
it in writing. If you don’t have to pay loan application fees,
you may want to compare lenders and compare closing costs.
• Don’t settle for the first lender you come across. Contact at
least three lenders and compare rates.
• Lock-in your rate. One of the most stressful parts of the loan
process is watching rates inch up and down each day and trying
to figure out when to lock in your rate. Once you do lock in, be
sure to get a written statement that outlines your interest rate
and length of the lock.
• Get a home inspection. A professional home inspector will
examine the house’s major systems and let you know if there are
any problems or defects. You can then use the information in
your negotiations. Look for an inspector who is a member of the
American Society of Home Inspectors. Members are required to
have completed at least 250 paid professional home inspections
and passed two written exams that test the inspector’s
knowledge. Also, ask for references.
• Shop for homeowners’ insurance as soon as your offer is
accepted. The National Association of Realtors recently
cautioned homebuyers to not take homeowners insurance for
granted. You and your spouse may have a clean claims history and
a stellar credit history – something insurance companies use to
determine whether they will insure you – but it’s not just you
they are looking at. If the house you are eyeing has had claims,
there’s a chance they won’t insure you, especially if it’s a
water related claim.
• Work with a REALTOR. A Realtor’s role extends far beyond just
finding a buyer, or a nice house in a good neighborhood. In many
cases, your Realtor is there to provide a reality check, and to
handle the tough negotiations involved before closing.
• Finally, give yourself enough time between your closing and
your move date, just in case there are delays in the closing
process.
Sincerely,
 Sherry Rich
REALTOR®, ABR, CRP, CRS, GRI
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