Langhorne, PA

Before You Begin.....

PRE-QUALIFICATION AND PRE-APPROVAL

Many buyers apply for a loan and obtain approval before they find the home they want to buy. Why?

Pre-qualifying will help you in the following ways:

1. Generally, interest rates are locked in for a set period of time. You will know in advance exactly what your payments will be on offers you choose to make.

2. You won't waste time considering homes you cannot afford.

Pre-approval will help you in the following ways:

1. A seller may choose to make concessions if they know that your financing is secured. You are like a cash buyer, and this may make your offer more competitive.

2. You can select the best loan package without being under pressure.

How Much Home Can You Afford?

There are three key factors to consider:

1. The down payment

2. Your ability to qualify for a mortgage

3. The closing costs associated with your transaction.

Down Payment Requirements:

Most loans today require a down payment of between 3.5% and 5.0% depending on the type and terms of the loan. If you are able to come up with a 20-25% down payment, you may be eligible to take advantage of special fast-track programs and possibly eliminate mortgage insurance.

Closing Costs:

You will be required to pay fees for loan processing and other closing costs. These fees must be paid in full at the final settlement, unless you are able to include them in your financing. Typically, total closing costs will range between 2-5% of your mortgage loan.

Qualifying For The Mortgage:

Most lenders require that your monthly payment range between 25-28% of your gross monthly income. Your mortgage payment to the lender includes the following items:

• The principal on the loan (P)

• The interest on the loan (I)

• Property taxes (T),

• The homeowner's insurance (I).

Your total monthly PITI and all debts (from installments to revolving charge accounts) should range between 33-38% of your gross monthly income. These key factors determine your ability to secure a home loan: Credit Report, Assets, Income, and Property Value.

To learn more about what I can do for you visit me, Carol Swain at www.swainsells.com . Also check out current homes for sale in Bucks County, Pa and surrounding areas.

Seller Agency (Single Agency)

• Agent will represent the best interests of the seller

• Agent will owe the seller fiduciary duties

• Agent must give the buyer all material facts so that the buyer can make an educated decision

Buyer Agency (Single Agency)

• Agent will represent the best interests of the buyer

• Agent will owe the buyer fiduciary duties

• Agent must give the seller all material facts so that the seller can make an educated decision

Transaction Broker (Dual Agency)

• Agent represents both the buyer and the seller equally

• Agent's objective is to get a mutually satisfactory agreement among all parties

• Agent gives all options to the buyer and the seller

• Depending on the local market, all parties may be present at contract presentation to negotiate on their on behalf

• All parties have confidentiality. Agent may do nothing to the detriment of either the buyer or the seller

• Both the buyer and the seller have a right to counsel. Before making any decisions, both parties have the right to seek family, religious, legal, or financial counsel.

In every relationship your agent has the duty to act honestly both with the seller and the buyer.

To learn more about what I can do for you visit me, Carol Swain at www.swainsells.com . Also check out current homes for sale in Bucks County, Pa and surrounding areas.

Now that you have decided to buy your home, what happens between now and the time you legally own the home? A Title Company may handle the following items. NOTE: in different parts of the country attorneys, lenders, escrow companies and other persons who are independent of, title companies perform some or all of these functions.

Earnest Money - An agreement to convey starts the process once it is received at the Title Company. Once you submit the loan application, it is usually subject to a credit check, an appraisal, and sometimes, a survey of the property.

Tax Check - What taxes are owed on the property? The Title Company contacts the various assessor-collectors.

Title Search - Copies of documents are gathered from various public records: deeds, deeds of trust, various assessments and matters of probate, heirship, divorce, and bankruptcy are addressed.

Examination - Verification of the legal owner and debts owed.

Document Preparation - Appropriate forms are prepared for conveyance and settlement.

Settlement - An Escrow Officer oversees the closing of the transaction: seller signs the deed, you sign a new mortgage, the old loan is paid off and the new loan is established. Seller, Realtors, attorneys, surveyors, Title Company, and other service providers for the parties are paid. Title insurance policies will then be issued to you and your lender.

Title Insurance - There are two types of title insurance:

•§ Coverage that protects the lender for the amount of the mortgage,

•§ Coverage that protects the your equity in the property.

Both you and your lender will want the security offered by title insurance. Why?

Title agents search public records to determine who has owned any piece of property, but these records may not reflect irregularities that are almost impossible to find. Here are some examples: an unauthorized seller forges the deed to the property; an unknown, but rightful heir to the property shows up after the sale to claim ownership; conflicts arise over a will from a deceased owner; or a land survey showing the boundaries of your property is incorrect.

For a one-time charge at closing, title insurance will safeguard you against problems including those event an exhaustive search will not reveal.

To learn more about what I can do for you visit me, Carol Swain at www.swainsells.com . Also check out current homes for sale in Bucks County, Pa and surrounding areas.

1. Property taxes and qualified interest are deductible on an individual's federal income tax return.

2. Often, a home is the largest asset an individual has and is considered one of the most valuable investments available.

3. A portion of each amortized mortgage payment goes to principal which is an investment.

4. A home is one of the few investments that you can enjoy by living in it.

5. A REALTORâ can usually show you any home whether it is listed with a company, a builder, or even a For Sale By Owner home.

6. Working through a REALTORâ to purchase a For Sale By Owner home can be very advantageous because someone is looking out for your best interest.

7. Your Real Estate professional can provide you with a list of items you'll need to complete your loan application so you'll be prepared.

8. A homeowner can exclude up to $500,000 of capital gain tax if married and filing jointly or up to $250,000 if single or filing separately. The home must have been the taxpayer's principal residence for the previous two years.

9. Beginning with May 07, 1997, there is no longer a requirement to purchase another home more expensive than the one sold. Homeowners are free to buy up or down with no tax consequences assuming their gain is less than the allowable amounts.

10. Ask the Real Estate professional if they are familiar with the neighborhoods where you want to live.

11. Ask the Real Estate professional whom he/she is representing in the transaction.

12. Ask the Real Estate professional what he/she will do to keep you informed.

13. Your Real Estate professional should provide you with the highest level of service and advice.

To learn more about what I can do for you visit me, Carol Swain at www.swainsells.com . Also check out current homes for sale in Bucks County, Pa and surrounding areas.

What is a Real Estate "Closing"?

A "closing" is where you and I meet with some or all of the following individuals: the Seller, the Seller's agent, a representative from the lending institution and a representative from the title company, in order to transfer the property title to you. The purchase agreement or contract you signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur.

If financing the property, your lender will require you to sign a document, usually a promissory note, as evidence that you are personally responsible for repaying the loan. You will also sign a mortgage or deed of trust on the property as security to the lender for the loan. The mortgage or deed of trust gives the lender the right to sell the property if you fail to make the payments. Before you exchange these papers, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records.

At closing, you will be required to pay all fees and closing costs in the form of "guaranteed funds" such as a Cashier's Check. Your agent or escrow officer will notify you of the exact amount at closing.

What is an Escrow Account?

An escrow account is a neutral depository held by your lender for funds that will be used to pay expenses incurred by the property, such as taxes, assessments, property insurance, or mortgage insurance premiums which fall due in the future. You will pay one-twelfth of the annual amount of these bills each month with your regular mortgage payment. When the bills fall due the lender pays them from the special account. At closing, it may be necessary to pay enough into the account to cover these amounts for several months so that funds will be available to pay the bills as they fall due.

To learn more about what I can do for you visit me, Carol Swain at www.swainsells.com . Also check out current homes for sale in Bucks County, Pa and surrounding areas.