Home Buyers Handbook

I asked the MoneySaverHQ team endless questions. And I started to feel a tad ashamed of how much I have buried my head in the sand. So I followed the advice we published. Calling the different companies and asking for a bill comparison became quite addictive and I could not believe the price variations. Next, I looked at my home loan. I rejected their first offer and, as they kept putting me higher up the chain of people authorised to lower my rate, I just kept saying no until I got to a rate I was happy with. Finally, I seriously looked at whether an investment property was the right choice for my husband and I.

We have made sure all the information presented in this magazine is easy to understand because the home buying process is complex; sorting your cash is not fun; and the whole thing can be dull if you are not into it. Editing this magazine got me excited about sorting my finances, a previously impossible task. We promise, it will do the same for you too.

To join the conversation, please Log in. Don't have an account? Join the conversation, you are commenting as Logout. Typically, each monthly home loan payment will go toward paying off the principal loan balance and interest. Most monthly payments also include additional amounts for taxes and insurance. The part of your payment that goes to principal reduces the amount you owe. The part that goes to interest doesn't reduce your balance.

At the start of your loan term, you owe more interest because your loan balance is still high.

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Near the end of the loan, you owe less interest, and most of your payment goes to pay off the principal. This process is known as amortization. Loan terms can usually be shortened when borrowers pay more than the minimum loan payment each month. The additional funds go to pay down the principal loan balance. Mortgage Insurance is money paid by borrowers to insure the loan when a down payment is less than 20 percent. Mortgage insurance may be paid as an add-on to a monthly mortgage payment, paid upfront or at closing.

The amount required is determined based on loan program type, property type, credit score and ratio of the loan value to the value of the property being purchased. Home loan interest rates are tied to a type of Bond called Mortgage Backed Securities. At the heart of home loan rate movement is the push and pull between Stocks and Bonds as they compete daily for the same investment dollars. Economic conditions, inflationary pressures and geopolitical events all influence the direction of Stocks and Bonds. When economic reports are weak or disappointing, investors often move their money from riskier investments like Stocks into Bonds, which are considered safer.

Since home loan rates are tied to Mortgage Bonds, they can improve. In contrast, strong economic news often causes investors to move money into Stocks. This can cause Mortgage Bond prices and home loan rates to worsen. Inflation also reduces the value of fixed investments like Mortgage Bonds. A low inflation environment tends to be good for Bonds and rates, while high inflation can cause both to worsen. Political turmoil or economic crises around the world can also cause investors to move their money into the safety of the Bond markets, helping home loan rates improve.

A home appraisal is a required part of the loan process and is conducted by a certified appraiser.

The appraiser's job is to provide an objective, impartial and unbiased assessment of the property's fair market value. The appraiser's report includes a detailed look at the home's general condition and a review of the surrounding area. Appraisal guidelines are dictated by legal requirements as well as the type of loan being issued. When the big day arrives, you'll be reviewing many pages of paperwork and signing and initialing several documents before getting the keys to your new home.

ASSETS & AVAILABLE FUNDS

Here are some tips to prepare, and if at any time during the process you have questions, please don't hesitate to ask. A home purchase is a significant, long-term commitment, and we want to ensure you are comfortable and confident with your decision. By law, you must receive your Closing Disclosure three business days before closing. Once you receive this, compare it to your most recent Loan Estimate for any discrepancies or questions you may have. Make sure you have handy the date, time, location, phone number and name of the person who will be conducting your closing.

Contact the individual handling your closing to confirm how closing funds must be provided usually a cashier's check or wire transfer and other items to bring to closing. Often, this will include photo identification, a checkbook and your Closing Disclosure. Make sure you understand if property taxes or homeowners insurance is included in your monthly payment or if you have to pay them separately.

Also find out who you should contact in the future if you have questions about your home loan. Throughout the process, you will be asked to initial or sign pages of documents that are reviewed.

Before you initial or sign, ask for clarification on anything that is unclear. When you complete a home purchase or refinance with Ryan Buckholdt we will cover the cost of your home appraisal. Just let us know you found us on Coastal Bay Real Estate! Bob Henkel's team is here to assist you with all of your home buying and selling needs. The entire team is dedicated to providing you with the best service possible. The Coastal Bay Team represents commercial real estate locally in Santa Cruz County and throughout California, with a clear understanding of national trends in commercial investment property.

We have placed our clients in strong income producing properties with value added fatures such as location, solid NNN leases, and exceptional tenants. Featuring a full-service team, we specialize in apartment houses, Strip Centers, Industrial Warehousing, office buildings, manufacturing facilities, exchanges, development and commercial leasing. Sign in to your account. Phone Number Need to reset your phone number? Don't have an account with us?

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Click here to sign up. Buying Your Home A Quick Look at the Process Introduction Purchasing a home, whether it's your first or last, is a big decision that raises all types of questions, especially about the loan process. The Loan Porcess Get acquainted with the basics of the home loan process for a smoother overall buying experience.

The most common types of loans are listed below. Construction Loan This short-term interim loan is to finance the cost of construction. Fixed-Rate Mortgage A loan term, or mortgage term, is the length of time the homebuyer will pay the loan back in full with interest. Veterans Affairs VA Loans VA loans are available to eligible veterans and are made by private lenders, such as banks or mortgage companies, for the purchase of a home for a buyer's own personal occupancy.

Loan Documentation Checklist Your loan application will require supporting documentation regarding your finances and work history. Below is a breakdown of the most common elements of a home loan payment. Annual Percentage Rates All lenders are required by law to state the total cost of obtaining home loan financing, which is reflected through the Annual Percentage Rate APR.

Escrow Funds Escrow funds are like a mandatory savings account tied to your home loan payment.

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Interest Rates Finding a good interest rate is important because it can save you tens of thousands of dollars in interest payments over the life of your loan. Principal and Interest Payments PITI Monthly home loan payments are primarily made up of principal, interest, taxes and insurance payments.

Mortgage Insurance MI Mortgage Insurance is money paid by borrowers to insure the loan when a down payment is less than 20 percent. The Lowdown on Home Appraisals A home appraisal is a required part of the loan process and is conducted by a certified appraiser. For buyers, appraisals can be a safeguard to ensure that a home's sales price is reasonable.