Texas Real Estate Homes: we buy income properties

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Buyer's Corner

The American dream is alive and well to all those who choose to pursue it.

Congratulations! You have decided to make your dream of owning a home into a reality. You are going to embark on a journey toward the American dream of becoming the owner of your own home. As with any journey toward a prized goal, you may encounter problems along the way. Stewart Title is here to help you leap the hurdles, navigate the obstacles or smooth the snags that might impede your journey.

Before you begin, let's look at some important issues that will provide you with the answers and the steps that will make your journey a pleasant and rewarding experience.

• How much home can you reasonably afford?
• Choosing the best real estate agent for you
• Selecting the most advantageous mortgage lender
• Choosing the right mortgage
• What is an FHA Loan?
  
• Finding the perfect home
• Making the Offer
• Closing the Deal

How much home can you reasonably afford?

Before you begin the search for your dream home, decide how much you can comfortably spend. Mortgage lenders most often will take into consideration all of the following:

• The size of your down payment
• Your job stability
• Existing debts
• Credit references and,
• Payment history.

Knowing your credit status and how credit agencies rate your credit also may be a deciding factor, especially when you begin talking to lenders. There are three main credit-reporting agencies that will, for a small fee, send you the most current credit report on file.

• Experian
  1888-EXPERIAN (397-3742)
• Equifax
  1800-997-2493
• Trans Union
  1-216-779-2378

Lenders usually use the following two qualifying guidelines to decide how much of a loan you can manage:

• Your monthly housing expenses - mortgage payment, property taxes, insurance, etc. These expenses should total no more than 28 percent of your monthly gross income.
• Your monthly living expenses and any long-term debts - utilities, car and school loan, child support, health and car insurance, etc. These expenses should be no more than 36 percent of your monthly gross income.

Choosing the best real estate agent for you

Once you've assessed your spending qualifications, you will need to find a real estate professional. As with any major journey, you need a capable, competent guide, one who clearly is able to lead you through the steps that ultimately will bring you to your final destination - your new home.

Choose an agent with whom you feel comfortable. One who is responsive to your needs and the needs of your family, one who compliments your personality, and one who is prepared to be with you throughout each step of the home-buying process.

A few simple guidelines for finding the 'right' agent are:

• If you already know the neighborhood in which you would like to live, find an agent within that community.
• Seek an experienced agent with a known reputation - look at credentials, track records and awards received.
• Seek someone who is a member of the Board of Realtors®.
• Find someone who is continuing their education - a Certified Residential Specialist (CRS), Certified Residential Broker (CRB), a graduate of the Realtors Institute (GRI) or an Accredited Buyer's Representative (ABR) - this shows the realtor is interested in the business long-term and is willing to invest in their career.
• Seekreferrals from your family and/or friends.
• Interview at least three agents before you make your final decision.

If you are being referred to an agent, here are some questions you will want to ask about him or her:

• What were they like to deal with?
• How hard did they work for you?
• Did they get you a good price?
• Were there any complications?
• Did they always tell you the truth?
• Were they always looking out for you or just interested in getting paid?
• Would you use their services again?

You've narrowed your choices to the top three professionals. It's time to make the final decision on who will be your guide. Ask these questions of your three finalists:

• How many buyers have you successfully represented in the last six months?
• Can I have the names and phone numbers of three to six of your most recent buyer clients?
• Do you deal mostly with homebuyers or primarily with home sellers?
• What professional designations do you have?
• Are you fully automated with your own personal computer, FAX machine, copier, pager, voice mail, etc?
• What is your commission? Or do you have hourly rates or a set fee?
• Do you have a list of home inspectors, insurance agents and reputable lenders for me to consider?
• What clauses will be included in our offer to protect us as buyers?
• Will you try to sell me one of your listed properties before you show me listings from other real estate companies?
• Do you have information about For Sale By Owner properties?
• How will you help me save money?
• How will you protect my interests, and why should I hire you rather than another agent?

Now, here are some questions to ask yourself after the final interview of real estate agents. The answers to the following questions will increase your chances of choosing the best real estate agent for your and your family.

• Which one returned your phone calls?
• Which one asked questions to determine what you want/need in a home?
• Which one performed a financial analysis to determine how much you can afford?
• Which one suggested financing methods?
• Which one seemed most knowledgeable about the community?
• Which one explained things most clearly?
• Which one did YOU feel most comfortable with?

Keep in mind, home buyers - you - need to search for a realtor the same way that home sellers do.

You see, there are two "sides" to every sale. The seller's side is represented by the listing agent. The buyer's side is represented by the selling agent. The selling agent also is referred to as the buyer's agent. Usually, real estate commissions are paid by the seller. For this reason, the selling agent, although representing the buyer, has certain duties to the seller. If you, as the homebuyer, want to have a real estate agent represent only your interests, you will need to hire and pay commission to your own real estate agent. These real estate agents are generally referred to as buyer's agents.

If you call on a single classified advertisement in a newspaper, an ad in a home selling magazines or a listing on the Internet, you most likely are calling the listing agent.

Selecting the most advantageous mortgage lender

With your realtor chosen, you now have someone who can guide you through the process of securing a mortgage lender. Your agent will help you understand and choose the type of lender that best fits your financial needs.

Each lender is different, so be sure to choose one that will work with you and your specific circumstances. Shop for lenders offering the best deals. Check with several mortgage companies and use one or more reporting services. If there isn't a reporting service covering your area, begin the search at your own bank or savings and loan or through any of the following sources:

Independent Mortgage Companies:

Make just over half of all home mortgages, including most VA-guaranteed and FHA-insured loans.

Savings Institutions:

Savings and loan associations and savings banks originate close to a quarter of home mortgages. Most are conventional loans - those not guaranteed by the VA or FmHA, or insured by the FHA.

Commercial Banks:

Active in residential lending. Banks also are a major supplier of loans for mobile-home buyers.

Mortgage Brokers:

Act as intermediaries. A broker keeps tabs on the mortgage market through ties to local, regional and national lenders, and can refer a prospective borrower to a mortgage banker, savings institution or a commercial bank. Brokers don't lend money and can't approve loans.

Credit Unions:

Make close to one-third of all first-mortgage loans, but you must be a member.

Public Agencies:

State and local finance agencies make below-market-rate financing available to eligible low- and moderate-income first-time buyers through the sale of tax-exempt bonds.

Employers and Unions:

Don't overlook your employer as a source of assistance. An employer may subsidize the interest or even act as a lender. Unions are another possibility. The AFL-CIO offers what it calls "Union Privilege." Unions that sign on can make first-time home loans available to eligible members for as little as three percent down.

Again, remember, your realtor should be able to provide a great deal of assistance in finding just the right lender. The following directory also will help you locate a lender right for you.

Lender Directory