READY TO BUY? DON’T KNOW WHERE TO START?
THIS IS YOUR GUIDE TO
HOME BUYING LISA HUBER REAL ESTATE BROKER Berkshire Hathaway HomeServices Chicago
lhuber@bhhsChicago.com | 312.610.0755 bhhschicago.com/lisahuber
TABLE OF CONTENTS
TABLE OF CONTENTS 4 REASONS TO BUY NOW ...................................................................... •
Prices will continue to rise
•
Interest rates are projected to increase
•
Either way you are paying a mortgage
•
It’s time for the next step in your life
STEPS FOR HOME BUYING .................................................................... •
Step #1: I Want to Buy
•
Step #2: Develop a Plan
•
Step #3: I Love this Home
•
Step #4: My Offer is Accepted
•
Step #5: Apply for a Mortgage
•
Step #6: My Loan is Approved
•
Step #7: Closing Day
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Q&A .............................................................................................................
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MEET THE TEAM ......................................................................................
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NOTES ......................................................................................................... 10
4 REASONS TO BUY NOW
4 REASONS TO BUY NOW 1. PRICES WILL CONTINUE TO RISE •
According to CoreLogic’s Home Price Index
(2016),
home prices have
appreciated 6.3% over the last year. •
Prices will continue to increase at a rate of 5.2% over the next year.
2. INTEREST RATES ARE PROJECTED TO INCREASE •
According to Freddie Mac’s Primary Mortgage Market Survey
(2016),
interest rates for a 30-year mortgage remain at 4%. Experts predict they will start to rise over the next year. •
This will increase your monthly mortgage payment.
3. EITHER WAY YOU ARE PAYING A MORTGAGE •
You either pay your own mortgage or your landlords — take your pick! Average Chicago Rent: $2,200 x 12 months = $26,400 x 3 yrs. $79,200
•
Want to learn how much you can save by buying? Visit my website: bhhsChicago.com/LisaHuber > Financial Tools > “Am I better off renting?”
4. IT’S TIME FOR THE NEXT STEP IN YOUR LIFE •
The cost of a home is determined by the price and current mortgage rate — both are on the rise!
•
According to the latest Rent vs. Buy Report from Trulia,
(2016)
homeownership remains cheaper than renting, with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.
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HOME SEARCH
STEP #1: I WANT TO BUY SET-UP A MEETING •
One-hour meeting with Lisa.
•
Discuss the home buying process.
•
Develop an action plan.
TOTAL REPRESENTATION •
Receive exclusive representation.
•
Important to understand the various agent representation/relations: BUYER’S AGENT: represents only the home buyer’s best interest throughout the home buying process.
SELLER’S/LISTING AGENT: represents only the home seller’s best interest through the home selling process.
DUAL AGENT: represents both the buyer and seller ethically and honestly, safeguarding the confidentiality of both clients.
FREE TOOLS & RESOURCES • • •
HomeSnap Lending App InTouch
• • •
MLS KR Reports Realist
• • •
Pocket Listing HomeMap DocuAgent
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STEPS FOR HOME BUYING
STEP #2: DEVELOP A PLAN STEPS FOR A SUCCESSFUL PRE-APPROVAL 1.
Three ways to apply for a pre-approval
FACE-TO-FACE
PHONE
ONLINE
INFORMATION COVERED DURING THE PRE-APPROVAL PROCESS •
Range of purchase price/down payment.
•
Income verification, credit history and asset information.
•
Determine a monthly payment comfort level.
•
Budgeting for closing costs.
2. Start gathering documentation: •
1–2 month(s) of pay stubs
•
2 years of W2’s/1099’s/K1’s
•
2 years of 1040’s (tax returns)
•
2 months of broker/bank statements (checking, savings, 401K’s, etc.)
3. Shop with confidence!
DETERMINE YOUR NEEDS •
Set maximum home buying price, location and criteria.
PROPERTY SEARCH •
Search the database for homes that meet your needs, including new construction.
•
3
Outline the “pros” and “cons” of each property to narrow your search.
STEPS FOR HOME BUYING
STEP #3: I LOVE THIS HOME YOU FOUND A HOME •
Consider making an offer.
•
Ask Lisa to pull recent comparable sales information.
•
Determine the fair market value of the home.
PRESENTING THE OFFER •
Once an offer is determined, Lisa will present to the seller.
•
If the offer isn’t accepted, discuss seller’s counter offer with Lisa.
•
Repeat until an accepted offer is reached.
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STEPS FOR HOME BUYING
STEP #4: MY OFFER IS ACCEPTED HOME INSPECTION — CONTINGENCY #1 FIVE AREAS TO CONSIDER WHEN CHOOSING A HOME INSPECTOR 1.
Qualifications — determine what’s included in your inspection and if it warrants specific certifications/specialties.
2.
Sample Reports — request a sample to determine their style.
3.
References — request contact information from past clients.
4.
Memberships — not all inspectors belong to national/state associations, but memberships often mean additional education.
5.
Errors & Omission Insurance — determine what the liability of the inspector or company is once the inspection is over.
HOME INSPECTION TIPS & STEPS •
Talk with your inspector about also attending the home inspection.
•
You will receive a detailed inspection report.
•
This report will be forwarded to your attorney. They will notify the seller attorney of deficiencies and will request to repair or credit.
ATTORNEY REVIEW — CONTINGENCY #2 •
Attorney will review the accepted sales contract and handle legal notifications of inspection issues.
•
Attorney will attend closing to review all documents with you.
MORTGAGE CONTINGENCY — CONTINGENCY #3 •
Apply for written mortgage application.
•
Provide
evidence
(clear to close).
5
of
a
written
mortgage
commitment
letter
STEPS FOR HOME BUYING
STEP #5: MY LOAN IS APPROVED AFTER LOAN APPROVAL •
Once you receive clear to close from lender, the attorney will schedule closing with seller attorney.
•
You will receive a Closing Disclosure from lender at least 3 days prior to closing, reflecting the actual terms of your loan transaction, as well as the final amount due (closing costs). CLOSING COSTS: Also known as settlement fees, closing costs are fees charged by the people representing your purchase — lender and other third parties. These fees are typically between 2-5% of your purchase price.
PREPARING FOR YOUR CLOSING DAY DO
DON’T
1.
Do tell your mortgage loan officer or loan originator about all debts or liabilities.
2.
Do continue to make all your payments on time.
3.
Do contact your mortgage loan officer before changing your jobs, quitting your job, becoming self-employed or any changes to your income.
1.
Don’t authorize any inquiries into your credit (that is, don’t apply for any new financing including credit cards, furniture, appliances, vehicles, boats, cell phones, cable, alarm companies, etc.)
2.
Don’t incur any additional debts, including increases in credit card balances and co-signing for others.
3.
Don’t close any open accounts.
4.
Don’t sign-up with any credit repair or “consolidation” company.
5.
Don’t spend money you have set aside for closing.
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STEPS FOR HOME BUYING
STEP #6: CLOSING DAY SET-UP A FINAL WALK THROUGH •
Preferably arrange walk through 72-hours in advance.
•
However, can be arranged as soon as 24-hours.
CLOSING DAY WHAT YOU NEED ON CLOSING DAY •
A valid driver’s license, proof of insurance and the monetary amount your lender told you to wire.
•
When buying in Illinois, any amount greater than $50,000 must come by wire. Always confirm with your title company before wiring any amount of money!
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Q&A
Q&A
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MEET THE TEAM
•
G R O U P
•
Lisa Huber, Team Leader 312.610.0755 Ross Wall 312.343.0657 Jamie Clemons 773.844.3829. Adam Massri 312.709.9165
RICK PANTOGA, MORTGAGE LOAN OFFICER NMLS 552590 Mortgage Loan Officer
HomeServices Lending, LLC 980 North Michigan Avenue, Suite 700 | Chicago, IL 60611 Office (312) 893-1397 | Cell (773) 899-5100 RickPantoga@HomeServiceslending.com RickPantoga.HomeServicesLending.com
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Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act. Georgia Residential Mortgage License Number: 32253. Regulated by the Colorado Division of Real Estate. Licensed by the Delaware State Bank Commissioner to engage in business in Delaware, License # 5837, Expiration 12/31/17. Illinois Residential Mortgage Licensee MB.6761077. Kansas Licensed Mortgage Company, License Number: MC.0025365. Ohio Mortgage Loan Act Certificate of Registration: 490683 SM.501899.000; Ohio Mortgage Broker Act Certificate of Registration: 490683 MB.804161.000. Oregon Mortgage Lending License ML-5251.
