Home buying Process from GreenPath Debt Solutions

The Home Buying Process

Phase 1 - Determine home ownership needs

What type of housing should I (we) buy?
How much can I (we) afford to spend?

Phase 2 - Locate and evaluate a home

Where do I (we) want to live?
How much negotiation movement exist?

Phase 3 - Price the property

What is an appropriate market price?
How much negotiation movement exists?

Phase 4 - Obtaining financing

How much down payment is available?
What are current mortgage rates?
Can I (we) qualify for a mortgage?
What type of mortgage should be selected?

Phase 5 - Close the purchase transaction

What is the closing date?
What funds and document will be needed for the closing?
Is everything understood before the final signing?

Qualifying for a Mortgage

Determine an estimated value of the home you would like to purchase.
Obtain funds for a down payment from savings or through gifts or loans from family members.
Reduce other debts or improve your credit record, if necessary.
Compare fees, services, and mortgage rates for different lenders.
Prepare the mortgage application.

Your mortgage acceptance will be based on your credit record.

The amount of the mortgage for which you qualify will be influenced by:

Your income
The amount available for a down payment
Current mortgage rates

Types of Mortgages

Fixed-rate, fixed-payment mortgages:

Conventional, 30 year mortgage
Conventional, 15 or 20 year mortgage
FHA / VA fixed-rate mortgage
"Balloon" loan (3-10 year terms)

Adjustable-rate, variable payments

Adjustable rate mortgage (ARM)
Graduated-payment mortgage
Growing-equity mortgage

Other financing methods:

Buy-downs
A shared appreciation mortgage (SAM)
A second mortgage (home equity loan)
Reverse mortgages
Refinancing

Closing Cost

At the real estate transaction settlement, commonly referred to as the "closing," the following costs are commonly incurred by a person buying a home:

Title search fee ($50-$150)

Title insurance ($100-$600)

Attorney's fee ($50-$700)

Appraisal fee ($100-$300)

Recording fees; transfer taxes ($15-$30)

Credit report ($25-$75)

Termite inspection ($50-$150)

Lender's origination fee (1-3% of loan amount)

Reserves for home insurance and property taxes (amount varies)

Interest paid in advance (if applicable)

Source: Choices & Decisions

		The Home Buying Process Phase 1 - Determine home ownership needs What type of housing should I (we) buy? How much can I (we) afford to spend? Phase 2 - Locate and evaluate a home Where do I (we) want to live? How much negotiation movement exist? Phase 3 - Price the property What is an appropriate market price? How much negotiation movement exists? Phase 4 - Obtaining financing How much down payment is available? What are current mortgage rates? Can I (we) qualify for a mortgage? What type of mortgage should be selected? Phase 5 - Close the purchase transaction What is the closing date? What funds and document will be needed for the closing? Is everything understood before the final signing? Qualifying for a Mortgage Determine an estimated value of the home you would like to purchase. Obtain funds for a down payment from savings or through gifts or loans from family members. Reduce other debts or improve your credit record, if necessary. Compare fees, services, and mortgage rates for different lenders. Prepare the mortgage application. Your mortgage acceptance will be based on your credit record. The amount of the mortgage for which you qualify will be influenced by: Your income The amount available for a down payment Current mortgage rates Types of Mortgages Fixed-rate, fixed-payment mortgages: Conventional, 30 year mortgage Conventional, 15 or 20 year mortgage FHA / VA fixed-rate mortgage "Balloon" loan (3-10 year terms) Adjustable-rate, variable payments Adjustable rate mortgage (ARM) Graduated-payment mortgage Growing-equity mortgage Other financing methods: Buy-downs A shared appreciation mortgage (SAM) A second mortgage (home equity loan) Reverse mortgages Refinancing Closing Cost At the real estate transaction settlement, commonly referred to as the "closing," the following costs are commonly incurred by a person buying a home: Title search fee ($50-$150) Title insurance ($100-$600) Attorney's fee ($50-$700) Appraisal fee ($100-$300) Recording fees; transfer taxes ($15-$30) Credit report ($25-$75) Termite inspection ($50-$150) Lender's origination fee (1-3% of loan amount) Reserves for home insurance and property taxes (amount varies) Interest paid in advance (if applicable) Source: Choices & Decisions