Serving Pinehurst, NC & Moore County

HOME BUYERS CHECKLIST


Get pre-approved for a mortgage - Obtain a Credit report, and possibly a FICO score. Learn about different types of mortgages, shop for best rates and programs.

Determine your wants and needs - Style of home, size, price, location.

Seek out an exclusive buyer's agent - Compare the services of different agents and look for good personal chemistry.

Search for homes in the MLS - Sign up for email notification services at a website which will allow you to be informed of properties which will meet your wants and needs. Some websites send any properties which fit your criteria (price, # of Bedrooms, etc.) - we can look at each qualifying property before sending it to you to eliminate ones which obviously won't work.

Check out the neighborhood, schools, zoning, and work commute - You can rely on our expertise and in-company resources. Check this website for helpful information.

Do the due diligence and research on your property of interest - Learn about any zoning changes, liens, easements, or other restrictions which might effect your use of the property. Your Buyer agent can be a great help with their knowledge of the area and local regulations.

Prepare the offer and negotiate - We can prepare a property value study and ask the seller, or their agent, if there are any other offers and his motivation for selling, deadlines, etc. It must be noted that in many cases the selling agency will not be giving out information that might be helpful for the Buyer as they are trying to get the best deal for their client.

Arrange financing - Now is the time to apply for a mortgage or, if paying cash, be sure that your accounts are in order.

Conduct the home inspections and other inspections - Take advantage of the inspection contingencies in your offer and get thorough inspections to eliminate any surprises after you move in to your new home.

Retain an Attorney - Your offer should include the option to have an attorney review your contract. Your attorney will also be doing the title search and possibly conducting the closing.

Walk-through inspection prior to closing - Visit your new home before you sit down at the closing table to make sure everything is as you expect it to be.

Closing - Make sure you have coordinated all aspects of closing with your various support personnel. Your buyer agent can help you do this. You will need to arrange to have whatever portion of the transaction costs you are not borrowing to be available in an acceptable form and will most likely need to have your drivers license with you for identification purposes.


DOCUMENTS YOU'LL NEED FOR PRE-APPROVAL


You can expect be a asked for the following documents and should have them available prior to meeting with your loan officer. In some cases there might be additional documents required.

W-2 forms: Usually need two years' worth. Allow the lender to evaluate income and job history. This helps the lender evaluate risk level.

Profit-and-loss statements: For self-employed individuals to substantiate their incomes. In some cases gross income may appear low but business expenses might indicate that tax deductions are the cause.

Pay Stubs: Help confirm current employment and income level. In some cases a lender might reconfirm employment prior to closing.

Bank statements: Including checking, savings, CD's, and mutual funds. Lenders like to see that you have the resources for the down payment and that you have had approximately that amount for awhile, not recently obtained.

Tax returns: Typically two years' worth. Tax returns give a lot if information to the lender as to your financial situation.


CAN YOU AFFORD TO BUY A HOUSE?


While everyone would like to live the American Dream of buying and owning a Home it is important to understand all the costs involved in buying and owning a home.

Many potential buyers sometimes forget to factor in the down payment, homeowners insurance and the possibility of depreciation, as well as the costs associated with closing the transaction, moving, purchasing major appliances, and home, landscape and pool maintenance, not to mention furnishings and design accessories once you move in.

For a general idea of your buying power, multiply your annual gross income by 2½. For example, if you had a household income of $50,000, you might be able to qualify for a $125,000 home. The actual number may be more or less, depending upon your individual situation, debts and credit history.

Housing Expense Ratio - As a general guide your monthly mortgage payment should be less than or equal to a percentage of your income, usually about a quarter of your gross monthly income. The percentage can change depending on the type of mortgage you choose. However, there are mortgage products available that focus solely on the debt-to-income ratio. Your lender can provide more information on these types of mortgage products.

Debt-to-Income - Your buying power can be affected by factors such as your income, debt and credit history. Your debt, such as credit card bills and car loans, and other expenses such as housing expenses, alimony and child support, should not be more than about 30-40% of your gross income.

How Much Money Do I Need to Buy a Home?

You'll need money for:

  1. A down payment
  2. Closing costs
  3. Other housing-related costs – mortgage payments, maintenance and repair costs

 

Your Down Payment - The down payment is a percentage of the value of the property. What percentage that is will be determined by the type of mortgage you select. Down payments usually range from 3 to 20% of the property value.

You may be required to have Private Mortgage Insurance (PMI or MI) if your down payment is less than 20%.

Closing Costs - Closing costs include points, taxes, title insurance, financing costs and items that must be prepaid or escrowed and other settlement costs. These costs generally range between 2-7% of the property value. You will receive an estimate of these costs from your lender after you apply for a mortgage.

While it may seem that it can take a lot to actually buy your home, you may be closer than you think.