Home Ownership Pays
No question about it, home ownership is a big investment, maybe the largest you'll ever make. But over time, it's an investment that pays for itself many times over. Here's how:
Frequently Asked Questions by Home Buyers
Answer: Many experts believe that you can afford to spend up to three times your gross annual household income. The price you can afford to pay for a home typically depends on these key factors:
Lenders analyze your income relative to your projected cost of home ownership and outstanding debts to determine the size loan you can have.
Answer: Buyer brokerage involves an agent representing you as the buyer in a real estate transaction for a fee. Historically in the United States, licensees frequently represented sellers as a matter of custom. However, there is no legal or ethical barrier that prevents licensees from representing the interests of buyers. Just as a seller's agent is hired to obtain the price and sales terms sought by the seller, a buyer's agent is hired to get the best possible price and terms for the buyer. The buyer's agent and the buyer negotiate the fee for service. In more than half of transactions involving a buyer's agent, the home seller compensates the buyer's representative. Less frequently, the buyer pays the agent a percentage of the sales price of the home; sometimes, both the buyer and seller compensate the agent. And, sometimes, the seller makes a payment based on a percentage of the price, finder's fee or even hourly fee for matching a buyer up with a home and negotiating the contract. Check with your agent on what options may be available.
Answer: Apart from helping you find the right property, a buyer broker might negotiate for less earnest money, for all closing costs to be paid by the seller or for other contractual terms most favorable to the buyer. Buyer brokerage assistance may also include helping the buyer obtain legal assistance to review proposed contracts or structural inspections to examine the property. The types of services buyers' brokers offer typically are the same as those provided by sellers' brokers.
Answer: In the past, an agent representing the buyer was far more common in commercial or land real estate transactions. However, interest in buyer brokerage has increased substantially in the residential sector. According to a 2001 survey by the NATIONAL ASSOCIATION OF REALTORS®, nearly half, or 46 percent, of all home buyers used buyer brokers that year.
Answer: It depends upon market conditions. If it's an unrealistic offer compared to the market value of the home, you stand a chance that the seller will not even bother to negotiate because you're so far apart. Also, unless the home is very overpriced, the offer will likely be rejected.
Answer: Risk is involved in selecting an adjustable rate mortgage, or ARM, because rates may go up. In contrast, a fixed-rate loan offers good protection against rising interest rates, but you are locked in to the initial rate if interest rates fall. Choosing between a fixed or adjustable rate mortgage is a matter of personal choice. The former offers stable payments while the latter offers lower initial payments. Consider, too, the length of time you plan to own the home. If you plan to move within three or four years, the ARM is preferable even if rates rise through the whole period.
Answer: No. FHA and VA interest rates fluctuate just like conventional mortgages. It's best to shop around.
Answer: They are principal, interest, taxes and insurance, otherwise known as PITI.
Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged to borrow money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.
Answer: It is typically mandatory if you put less than 20 percent down, to protect the lender against loss if you default. Effective for loans written on or after July 29, 1999, lenders must automatically cancel PMI when the mortgage balance is reduced to 78 percent of the home's original purchase price.
Answer: More and more buyers enter the marketplace with their mortgage in place, including many who have been pre-approved or pre-qualified via the Internet.
Answer: You can easily get a pre-qualification letter by calling a mortgage broker or lender, and providing some basic financial information. Similarly, getting pre-qualified on the Internet is quick and easy. In contrast, a pre-approval letter involves verification of the information, which means that the lender will ask for documentation to confirm your employment, the source of your down payment and other aspects of your financial condition.
Indeed, getting a pre-approval may be more time consuming than getting a pre-qualification but carries far more weight. Sellers often prefer to negotiate with pre-approved buyers because they know that these buyers are financially qualified to get the financing they need to close the transaction. Moreover, a pre-approval letter lets your real estate agent know that you're a well-qualified buyer who is serious about purchasing a home. These factors notwithstanding, pre-approval letters aren't binding on the lender, are subject to an appraisal of the home you want to buy and are time sensitive.
Answer: One of the standard contingencies that should be put into an offer is an inspection contingency, which allows you to have professionals inspect the property to your satisfaction. Typically scheduled within a certain five-to-fifteen day window after the contract is signed, a home inspection is a thorough examination of the physical structure of a home including, but not limited to, foundation, attic, basement, windows and doors, heating and cooling systems, electrical wiring and plumbing. A positive home inspection should increase your confidence that you are making a solid investment, and your agent can advise you about which inspections are recommended or required. Note: The home inspection is a buyer's cost.
Answer: They are expenses over and above the price of a home incurred by buyers and sellers in transferring ownership of a property and can be substantial. Closing costs vary in different parts of the country and usually include a mortgage origination fee, an attorney's fee, accrued
Disclaimer: All information deemed reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change, or withdrawal. Listing broker(s) shall not be responsible for any typographical errors, misinformation, misprints, and shall be held totally harmless
621 Poplar St.
Atlantic, IA 50022
$49,700 - Atlantic, IA
621 Poplar Street
Atlantic, Iowa 50022