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[A325]After Buying A Home

by Julie Jalone, Jul

The steps below are generally what happen after the contract has been accepted by the sellers.

Step 1: Contract Acceptance ? Yippee! ? Celebrate (briefly, and then let your Realtor get to work!)

Step 2: Escrow Opens ? Selecting a title company is most often done by the sellers and the selling agent generally opens the escrow. Occasionally opening of escrow will be done during the listing period.

Step 3: Loan Application and Income/Employment Verification: Most buyers have started this process before looking for a home and if you were pre-qualified much of this work is complete. Make sure your Realtor and Lender are working together.

Step 4: Inspections ? Most transactions require the seller to provide a Pest Inspection and good Realtors insist their buyers get a Home Inspection to verify the house systems are in working order and the building is in compliance with local regulations. Generally sellers will pay to have all section I items on the pest inspection repaired. Section II items on the pest inspection and items that need repair or replacing as found in the home inspection may be subject to further negotiation.

Step 5: Disclosures and More Disclosures - The mandatory sellers disclosures include California Statewide buyer/seller advisory, Supplemental Statutory Disclosure (SSD), Transfer Disclosure Statement (TDS), Natural Hazard Disclosure (NHD) , Lead Paint Disclosure. Your Realtor will make sure you get and understand each of these.

Step 6: Preliminary Title Report ? Provided by the title company this report will alert you to liens, easements, taxes and other items filed on the property.

Step 7: Property Appraisal ? This is ordered by and is primarily for your lender to confirm the value of the property. Most often the appraised value will be the amount you have agreed with the seller to buy and sell. Read this report carefully, there is a wealth of information about your new home.

Step 8: Removing Financing Contingencies ? Unless otherwise stated in the California Purchase Agreement this happens 17 days after the contract is signed.

Step 9: Removing Inspection/Property Contingencies ? You, as the buyer, have, unless otherwise stated, 17 days to have the home inspected and review reports before you must remove this contingency.

Step 10: Deposit Increase ? If asked this will happen after the inspection period and removal of property contingencies.

Step 11: Selecting and Obtaining Hazard Insurance ? This is coordinated with the Lender and Title Company but it is your task to make happen. If this is your first home your Realtor and Lender will be able to guide you.

Step 12: Home Warranty ? If the sellers agreed to acquire a Home Warranty as part of the purchase, now is the time for it to be ordered. If the sellers are not buying the policy, you may order and pay for one. They generally cost between $300 and $400 and are well worth the expense.

Step 13: Signing Documents ? This will be scheduled by the title company and most often will be in their office or if you are not is the same town can be done at a title company in your city. If you have a good Realtor or Lender they will be there to help answer any questions you have. You will be signing more documents than you ever imagined!

Step 14: Final Walk Though ? This is an important inspection made by you to make sure the home is in the same or better condition as it was when the Purchase Agreement was signed. Make sure your Realtor is with you and has a check list of items to review. This is where you can verify the seller made required repairs agreed to under the contract and subsequent amendments.

Step 15: Close of Escrow ? This happens when all conditions of the escrow have been met including the receipt by the title company of ?good? funds.

Step 16: Title Transfer ? Often referred to as ?Recording,? this is when the actual title of the property is transferred from the seller to the new owner. It is at this point, you will have access, unless otherwise arranged, to your new home.

What I have described in the steps above is a typical transaction between a buyer and seller. The steps may happen in a different order or in the case of issues, which are not abnormal, may happen more than once. For example it is not uncommon for a property appraiser to re-inspect the property if there were code or safety violations.

Buying a home is a big step and for most of us, one of the largest transaction we will be part of. Be prepared, for more information about each step and how they may change depending on the situation, give me a call at 916 276-6883 or email me at julie@jalone.com. In addition, read my articles on Reports and Inspections and What You Need to Look for on Your Final Walk Though for more detailed information.

Owning a home is the ultimate American dream. It is also the best way to build wealth for yourself and for future generations. Having bad credit should not prevent you from owning a piece of the American dream.

If you have poor credit - you are not alone. It is estimated that approximately 30 million Americans struggle with bad credit from having excessive credit card debt and not paying their bills on time. Unfortunately, rising medical costs, job layoffs, ridiculous gas prices and escalating home prices are exacerbating the rate at which Americans are falling into the bad credit pit.

Without a doubt, no other process renders you more ashamed and more aware of your bad credit score than the act of purchasing a home. Buying a house with good credit is horrendous enough, for first time homebuyers. For people with bad credit, it is an act of congress but it need not be. Here are four easy ways to buy a house with bad credit.

Keep it in the family. Get a relative who has good credit to purchase the house on your behalf. A family member with a solid credit history, will get a good interest rate thereby making your monthly mortgage payments more affordable. You will also get some exposure to the home buying process without being overwhelmed.

After your relative closes on the house, you must take over the mortgage payments, insurance and taxes. This will ensure that you get the tax benefits of being a home owner right away. Arrange for your relative to sign a “Grant Deed,” to add your name to the title of the property. This makes you a co-owner of the house.

At this point, you should focus on rebuilding your credit score to between the 675 to 715 range – the higher, the better but you can make this your initial goal. To improve your score, you must live by these three rules:

· Pay your bills on time – always.

· Do not open up too many lines of credit. Keep one or two lines of credit.

· Do not max out your credit cards.

Once you have achieved a good credit score, your relative can sign another “Grant Deed” to take their name of the property title – making you the full owner of the house.

Self Serve. If you do not have a family member or friend, who can buy the house on your behalf, then you will have to buy the house on your own. You will need the services of an experienced mortgage broker. A good mortgage broker has access to a variety of mortgage programs and can find one that fits you. Since you have bad credit, you will get a not-so-great interest rate. This is to be expected.

According to the Fair Issacs Corporation (FICO), if you have a FICO Score of 550, your likely interest today would be 9.289%, while a person with a FICO Score of 700 would get an interest rate of 5.867%. On a $200,000 mortgage, the difference in monthly mortgage payments would be $426.00. This is a lot of money, but do not obsess over it. The lesson from this exercise, is to realize the importance of improving your credit score. Once you raise your credit score, you can refinance the mortgage to get a lower interest rate thereby reducing your mortgage payments.

Rent to Own. You have seen the advertisements in the newspaper. If you are a renter and can afford monthly mortgage payments but do not have the 10% to 20% down payment required to buy a home – this is a great option. “Rent-to-own,” legally referred to as “Lease Option” works as follows:

· Buyer finds a home.

· Buyer and seller agree on a sales price (for example $250,000)

· Buyer pays seller a non-refundable option fee. This fee is the price that the buyer pay the seller for granting them the option to buy the house.

· Buyer and seller agree on interest rate, option term and down payment. For example, the terms of the contract may be 8%, 24 months and a down payment of $2,500. The buyer does not to pay the $2,500 in one lump sum but rather over the period of 24 months.

Total monthly payments to the seller will be the principle and interest on a $250,000 mortgage loan at 8%, which is $1,834 (assuming 30 year fixed) plus $104.17 ($2,500/24 months) for a total of $1,938.17. At the end of the 24 months, you have the option to purchase the house or pass up the deal.

The biggest advantage to the “Rent to Own” process, is your ability to lock-in a price today for a future home purchase. In other words, if the house is worth $260,000 in 24 months – you immediately have $10,000 equity in the home.

Seller Financing. Get the seller to finance your home purchase. Bypass the hassle of getting a conventional loan and find a motivated seller, who is willing to finance your home. The way to do this, is through a “wraparound mortgage,” legally termed an “Inclusive Trust Deed”. In a wraparound mortgage, you purchase a house by assuming a subordinate mortgage to the original mortgage on the house.

This scenario works as follows:

· Buyer finds a home.

· Seller is currently carrying a mortgage on the house, in the amount of $200,000 at a 7% interest rate.

· Buyer and seller agree on a new sales price, interest rate and down payment (for example $250,000, 8.5%, $25,000).

· Buyer puts down $25,000 as down payment and assumes a loan for $250,000 at 8.5%. Buyer makes payments to the seller on monthly basis.
· Seller pays original loan mortgager on a monthly basis and pockets difference.

This option negates the arduous process of finding a conventional loan. In addition, you avoid closing costs, which can be quite steep in some states (up to 5% of the sales price).

Any of these four options will lead you down the path of home ownership. Buying a home with bad credit is an attainable goal.

Article Source : Buying and Selling Home

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Both Julie Jalone & Delia Galley are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Julie Jalone has sinced written about articles on various topics from Sell Home, Buying and Selling Home and Lose Weight. Julie Jalone is an experienced professional Realtor serving the need of buyers and sellers of residential real estate in the Greater Sacramento area including Placer, El Dorado, Yolo and Yuba counties. Some of the communities served by Julie include Sacra. Julie Jalone's top article generates over 33100 views. to your Favourites.

Delia Galley has sinced written about articles on various topics from Buying and Selling Home, Build Online Business. . Delia Galley's top article generates over 3600 views. to your Favourites.