Buying Tips

• Get pre-approved for the purchase:
  This takes very little time and is of great value. At this time, identify the price range for which you qualify and which fits your lifestyle.
• Submit a strong competitive offer:
  Submit the offer as if there will be multiple offers.
• Include substantial earnest money deposit:
  Acceptance of an offer is sometimes determined by the amount of the deposit. A larger amount may signify a bigger commitment to the seller.
• Minimize or eliminate contingencies:
  The fewer contingencies, the stronger the offer.
• Make a buyer profile available:
  Time on the job, flexibility, reason for purchasing seller's home, etc.
• Be prepared to preview a new property quickly:
  Homes sell sometimes in hours. Be prepared to make decisions quickly and be accessible to change the terms instantly.

Fixed Rate Mortgage

The interest rate stays the same throughout the term of the loan - usually 15 or 30 years - so the principal interest portion of your payment remains the same. Payments are stable but initial rates tend to be higher than adjustable rate loans and often cannot be assumed by a subsequent buyer.

Balloon Mortgage

This is a loan which must be paid off after a certain period. The advantage they offer is an interest rate that is lower than a mortgage that is made for 30 years.

Adjustable-Rate Mortgage (ARM)

The interest rate is linked to a financial index, such as a Treasury security or a cost of funds - so your monthly payments can vary up or down over the life of the loan - usually 25 to 30 years. Interest rates can change monthly, annually, or every 3 or 5 years. Some ARMs have a cap on the interest rate increase, to protect the borrower. Other terms relating to adjustable-rate mortgages:

• Adjustment period: The length of time between interest rate changes. Example: one year ARM-interest changes annually.
• Cap: The limit on how much an interest rate or monthly payment can change at each adjustment or over the life of the loan.
• Conversion clause: A provision in some loans that enables you to change an ARM to a fixed rate loan, usually after the first adjustment period. This may require additional fees.
• Index: A measure of interest rate changes used to determine changes in the loan's interest rate over the term of the loan.
• Margin: The number of percentage points a lender adds to the index rate to calculate the ARM's interest rate at each adjustment.

VA Loan

The VA does not lend money, it guarantees a portion of the loan so that lenders who originate the loan feel comfortable with their risk. Qualified veterans can obtain loans up to $203,000 with no down payment. VA-guaranteed loans can be combined with second mortgages and are assumable upon qualifying by any future buyer.

FHA Loan

FHA does not lend money or make a loan; rather, it insures loans. The down payment can be as low as 2.25%. Discount points may be paid by either buyer or seller. FHA charges a 2.25% up front Mortgage Insurance Premium (or as little as 2% for a first time home buyer) that can be financed in the mortgage amount or paid in cash (no premium is required for condominiums). The borrower must also pay an annual Mortgage Insurance Premium or .5% which is collected monthly.

Seller Assisted Second Mortgage

The seller of the house lends the buyer enough to make up the difference between the purchase price and the down payment plus first-mortgage balance (a commercial lender may also make this kind of loan). The terms including the interest rate, are based on buyer/seller agreement. It is often a short-term (5 to 15 year) loan; sometimes "interest only" payments until the term date when the balance is due in full. A buyer can then refinance the home.

Assumable Mortgage

Buyer "takes over" or assumes the mortgage obligation of the seller (with concurrence of the lender). The interest rate doesn't change and is sometimes lower than current rates. Often the loan fees are less as well.

Choosing a Repairman

good repairperson can mean the difference between a trouble-free project and an unforgettable disaster. Don’t just hire the first person who returns your call. Whether you're looking for a general handyman or a specialty contractor, it's wise to do a little legwork in order to find the best and most reliable talent:

Ask friends, neighbors, and co-workers for recommendations.
The best litmus test is whether they would use the repairperson or company again. If you can, check with your home's previous owners; they may have a list of names to work from. Always check the references of anyone you're considering and trust your gut instincts, too.

Ask for credentials.
Specialty contractors should carry at least a contractor's license (Florida and California require specialty licenses as well) and be fully insured and bonded. If you are hiring a general repairperson, be sure they are bonded and carry worker's compensation insurance. Membership in a trade association or union doesn't guarantee competence, but unions do require members to go through a course of training (from apprentice to journeyman) and many associations require members to meet performance standards.

Ask for an estimate.
Always get a written estimate of the job to be done, including the amount of time it will take to complete the project, how you are to be billed, cost of materials, and any other fees. Billing practices vary from hourly to flat fee, and depend on the nature of the work. In general, hourly billing is more cost-effective for short-term projects.

Ask about materials.
Depending on the work, it may be more cost-effective for you to provide the materials necessary for the job. While contractors usually get materials at a discount, that discount isn't always passed on to you. If the project is small, such as replacing a door or installing ceiling fans, you may get a better deal yourself at the local home center.

Ask about permits.
Be sure any work you have done on your house conforms to local building codes. This is required by law in most jurisdictions, and violations can mean a potentially costly run-in with the building inspector when you go to sell.

Ask for a written guarantee.
Most states require at least a year's warranty on most contracting work.

Ask how the work will be done.
Find out how decisions will be made during the project, and be available to participate by telephone or on-site. Ask about start and stop times in case you need to be there to unlock doors. Alert neighbors if your work is going to be noisy or long-term, and check local codes to be sure you meet noise and clean-up guidelines.

Ask about payment.
Never agree to prepay for a job or put down a deposit. Agree to a payment schedule in writing (if the project has more than one phase) before the work begins.

Ask for ideas.
The better the repairperson, the more creative they will be at solving tricky repair problems. Ask for their solutions up-front.

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