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Blue Mountain MortgageBuying a Home
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Mortgage Rates* 30-Year Fixed 6.375% Jumbo Fixed 6.875% ARM 6.125% *Rates subject to change without notice
Last Updated Monday, December 03, 2007
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Asheville Real EstateBuying a Home
There is a wealth of information on the Internet about how to purchase a home, whether you are a first-time home buyer or not. Our goal, at Blue Mountain Mortgage, is to educate and inform you about items to consider before purchasing a new home.
First of all, make sure you educate yourself prior to looking for a new home. Learn all that you can about mortgage loans, real estate agents, predatory lenders, your credit score and start planning for that investment you will ultimately refer to as your new home. Find out as much information about the entire process as you can. Being informed will help alleviate problems on down the road. |
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Tips for .... Buying a Home
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Find out your credit score so that you know what to expect. Mortgage lenders are going to scrutinize this credit score, so make sure you have done all you can to improve your credit score long before the mortgage process begins. A good rule of thumb is to get a copy of your credit history a few months before purchasing a home and make it as clean as possible.
Other financial considerations, which will affect your equity are: ► Have you made any major purchases recently? ► Do you plan to stay in this new home for a few years, once purchased? ► What is the status of your job? ► Do you plan to have children anytime soon? ► Are your children headed to college soon? ► Do you have enough equity built up to make a down payment? ► Do you realize there's more to the house buying process than the mortgage payment?
The best recommendation we can make is to obtain the services of a realtor, as opposed to a real estate agent. Realtors are typically full time agents who are professionally committed to the real estate business completely. There are dozens of ways to obtain a realtor, but we suggest you ask others about their experience with the realtor. Was the person easy to get along with? Would you recommend or work with them again? Did they help you with the entire process along the way?
Additional considerations, once you have obtained a trained professional: ► How long have you been in the real estate profession? ► Are you a full time real estate agent, realtor, or broker? ► What other certifications have you obtained? ► How long have you worked in the area where I want to purchase a home? ► How often will you notify me about new listings? ► How quickly do you return phone calls? ► Who will you represent during my home purchase? ► Do you have references from previous buyers? ► Do you normally work with sellers or buyers?
Fixed rate mortgage? Jumbo Loan? ARM? How do you decide what type of mortgage loan to use? Make sure you research the loan types before you ever begin the house hunting process. You can also check out our Glossary of Terms page which will help educate you about the different types of loans. Some of the mortgage types are shown below.
► Fixed rate mortgage Its name says it all. A fixed mortgage rate has an interest rate that remains the same for the entire life of the loan. The number of years for a fixed rate mortgage is dependent upon how much you can afford to pay each month.
► One-Year ARM Adjustable rate mortgage (ARM) has an interest rate that changes according to the current market rate, which means your monthly payments will either increase or decrease during the life of the loan. For a one-year ARM, the interest rate will change every year. Most buyers are allowed the lowest rates because of the risk they take with a 1-year ARM.
► Jumbo Fixed
► Balloon Mortgage A balloon mortgage is just as its name implies. While a bit riskier than other loans, interest rates remain the same for the life of the loan but at the end of the loan there could be a rather large payment that is due. Thus resulting in the "balloon" terminology of the mortgage. Be prepared for a very large payment at the end!
► 10/1 Year ARM For these types of loans, the interest rate remains steady for the first 10 years of the loan, and then on the 11th year, the rate will change according to the current market. There are several variations of this type of loan. The 7/1, 5/1, and 3/1 ARMs are similar except for the number of years the rates do not change.
This is the most exhilarating part of buying a new home. This is where you get to browse online for that dream house you've always wanted. Be sure to enjoy your house by exercising a bit of caution. Generally speaking, you can afford a house that is 2-3 times your annual salary, so focus on that goal when house hunting. House hunting, while exciting, can also be time consuming. You will need to thoroughly research the real estate market for trends, job possibilities, new construction, housing, schools, and a wealth of information prior to buying your new home. Be sure to consider the following items when house hunting.
► Take pictures of all houses you view. ► Take meticulous notes on each house you see. ► Take along a friend who's very opinionated. ► How far is the house from your job? ► Focus on your finances; always know how much you can afford. ► Don't make any spur-of-the-moment decisions. ► Ask friends/family for pointers. ► Know exactly what you want out of a house BEFORE you start! Town/city, area, school system, neighborhood, yard, price, etc. Bedrooms, bathrooms, square footage, kitchen, fireplace, garage, basement, etc. ► Utilize the Internet for researching homes
Home inspections play a huge part in buying or selling a home. An inspection is the best way to determine if a new house is in good condition or if it needs repairs. A home inspection includes, but is not limited to:
► Structural items - are there any visible cracks in the foundation? ► Exterior of house - is there anything that needs to be repaired? ► Roofing - what is the age of the roof? Life expectancy of roof? ► Plumbing - any visible leaks? ► Electrical - any code violations? ► Heating/Cooling - find out the age of the systems ► Interior - problems opening/closing windows/doors? Are floors solid? ► Ventilation & insulation
A good idea is to ask your real estate agent about anything you might have missed in the home inspection phrase of buying a new home.
There are several costs involved in the closing process when buying a house. Ensure that you have researched all potential fees & charges you might pay at closing. The closing costs can add up, so make sure you have planned for these costs when buying your new home. Closing costs can include:
► Loan origination/application ► Appraisal ► Attorney's fees & document preparation ► Credit report ► Inspections - pest, radon, etc ► Home & Title Insurance ► PMI - Private Mortgage Insurance - mandatory for all down payments less than 20% ► Points - with excellent credit, you may obtain a loan that doesn't require points. ► Escrow fees
When you work with Blue Mountain Mortgage, they will convey to you exactly which fees you can expect to pay when buying a home.
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