Provo, UT

Utah County Home Buyer 101 - Getting Pre-Approved

The time has come to start shopping for a Utah County Home to purchase. The first thing that you should do is to get pre-qualified for a Utah County home loan. It is very important to understand what your price range is prior to looking so you don't waste time looking at properties that are out of your price range.

Where do you begin?

Most Utah County Realtors work with a trusted network of Mortgage professionals, who can assist you in getting pre-approved for a loan so that you can comfortably begin looking at homes with the assurance that you can obtain the proper financing.

Generally, Utah County loan officers can help you with a pre-approval by getting some basic information (address, social security number, etc.) over the phone or Internet.

If you choose to purchase a Utah County new home, many builders have mortgage companies that will offer large incentives to use them.

Most Utah County Realtors prefer that their clients begin the loan process before they begin looking actively at homes, in order to best utilize your time as well as theirs. It also helps immensely having a pre-approval letter in hand when you are making an offer on your new home.

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We need Positive Price Action to confirm market bottom. One month of price improve isn't sufficient to confirm the market bottom. We need to see appreciation month over month for three months.

PRICE ACTION

Other good signs in addition to positive price action is lower DOM (days of the market), lower new listings and higher percent of new listings being SOLD.

SUMMARY

Currently we are not seeing the needed positive price action (along with other indicators) to confirm a market bottom. This is NOT a good time for those with low and/or no risk tolerance to purchase.

High and medium risk tolerant investors are making buying decisions and are doing some bottom fishing.

Some are trying to time the market and market timing is risky. Trying to time the bottom is not for the inexperienced buyer and extremely difficult.

Those waiting for a market bottom confirmation will (almost always) miss the bottom. This is because confirming factors are lagging indicators.

Buy and hold is the best buying strategy.

Data considered accurate... However is NOT Guaranteed. Contact your Mark Watterson your Local Property Resource Specialist for the most up-to-date data and help to determine your specific risk tolerance.

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Mark Watterson is a Utah licensed Real Estate Broker with Principle Realty Group, Inc. and a Utah license Loan Officer with Springwater Capital, LLC

Contact Mark Watterson your Local Property Resource Specialist for the most up-to-date market conditions data for Salt Lake, Davis, Utah and Weber Counties. View comprehensive property resource information at www.markwatterson.com

It's Not About the Money -It's about life long relationships that are based on Customer Service Excellence.

The "Voice of the Customer" is where it all begins. Customer Service Excellence is not just words. It's our CULTURE.

My customers refer their family and friends because of the exceptional attention to detail, customer focus and the value added services they receive. An unmatched passion and love for providing these services is the thread that binds the entire business process together making it a smooth and seamless event.

In fact it doesn't even seem like business. Because it's all about you, your goals and objectives.

You should expect the highest level of service and you deserve it. It's about you, the right property and your GOALS. YOU Deserve the BEST!

Utah County Home Buyer Representation - Buyer Agent vs. Seller Agent

During the past 25 or so years, Utah County home buyers have been able to choose between Buyer agents or the Sellers agent representing the Seller, to buy a home from. Many buyers didn't even know that they could use a buyer agent or even if they were available. Most home buyers assumed the agent showing the home represented them. Seller agents were obligated to represent the seller's interest unless they had a separate written agreement with the buyer to represent them.

The FTC did a study of the Real Estate brokerage industry in 1983 and determined that most home buyers actually thought that the Real Estate agent showing them homes was working in their best interest, the vast majority were wrong. The FTC started putting pressure on the states to have real estate agents disclose in writing to the consumers whose side they were representing. In the early 1990's most stated adopted agency disclosure laws requiring real estate agents to finally tell consumers the truth about who they were working for. The NAR endorsed buyer agency as an alternative in 1993.

Today agency is broken down into 3 categories. Seller, Buyer and Limited (Dual). The Real Estate agent has to disclose in writing, which he is representing in the transaction and the other party has to acknowledge their understanding of the representation during the process of buying and selling of a home.

There are three big advantages of having an Utah County Exclusive Buyers Broker agreement when you are purchasing a new home.

Unbiased view of the Utah County Real Estate Market

Seller agents want to sell you their own property that they have listed. Buyer agents want to show you as many properties as possible to help you make an educated decision.

Negotiate in Utah County Buyer best interest

Seller agents typically try to get the highest price they can for their seller client. The higher the selling price the larger their commission and happier their client is.

Savings on Loans and costs

Once a buyer agent has negotiated a purchase contract, then he works hard to save you money on loans, inspections, repairs and closing costs. The buyer benefits by having his agent focus completely on him and trying to make his experience a good one.

Why Use an Utah County ABR®: REALTOR® Experienced in Buyer Representation

Buying a home is no small matter. Besides being the largest financial transaction you may ever undertake, it's probably also the most complex. There are many good reasons to work with a qualified real estate professional-especially a trained professional who has earned the Accredited Buyer's Representative (ABR®) designation, representing best-in-class buyer services.

When you look for an ABR® before you look for a home, you'll be served, not sold. Your interests become their interests. And you'll be working with someone who has gone the extra mile by completing specialized training in delivering the best in buyer-representation services. Plus, a REALTOR® who has an ABR® Designation also has an established track record, with proven experience in representing the concerns of homebuyers.

The ABR® Designation is awarded through the Real Estate Buyer's Agent Council, or REBAC, which was founded in 1988 to promote superior buyer-representation skills and services. REBAC is an affiliate of the National Association of REALTORS® (NAR).

ABR® vs. Buyer's Rep: A REALTOR® Designation

A buyer's representative (or simply buyer's rep) is a licensed real estate professional that represents prospective homebuyers in their property transaction. If you've formalized an agency relationship, typically by signing a buyer's rep agreement with a buyer's rep, you can expect him or her to:

• Understand your specific needs and wants, and locate appropriate properties.
• Assist you in determining how much you can afford (pre-qualify your mortgage).
• Preview and/or accompany you in viewing properties.
• Research properties, to identify any problems or issues you should consider.
• Advise you in formulating your offer.
• Help you develop your negotiation strategy.
• Provide a list of potential qualified vendors (such as inspectors, attorneys, lenders, etc.) for other related services that may be needed.
• Keep track of all the details throughout the entire transaction-to closing and beyond.

In other words, a buyer's rep should make your home buying experience go as smoothly and successfully as possible.

But not all buyers' reps are equal. A Utah County buyer's rep who has earned the Accredited Buyer's Representative (ABR®) REALTOR® designation has made an extra effort to raise the bar, with additional training and experience in serving you, the homebuyer. If you work with an ABR®, you can feel more confident that you'll receive the highest level of buyer-representation services.

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First-Time Home Buyer - Utah County Homes for Sale

Utah County Home Loans and Private Mortgage Insurance - Early Exit - Utah County Real Estate

Private Mortgage Insurance (PMI) is the safety net of the lender. PMI benefits lenders because it guarantees payment on the balance of loans not covered by the sale of Utah County foreclosed properties.

If a borrower makes a down payment of 20% of the cost of the Utah County Home, the lender can generally trust that he will make his mortgage payments faithfully to protect a large investment. In this case, the lender comes out ahead if the borrower is forced to foreclose on his house, because the lender loans 80% of the cost of the house, but will probably recover 100% of the cost of the house. But, if the borrower makes a smaller down-payment, such as 3%, 5% or 10%, and borrows the rest, and then defaults on his loan, the lender loses money.

If a house is purchased with a conventional mortgage and a down payment of less than 20 percent, PMI is almost always a requirement. The insurance benefits the lender, but the borrower pays for it. An initial premium is included in the closing costs, and a monthly amount in the house payment.

The PMI cost varies depending upon the size of the mortgage and the percentage of the down payment. If the down payment is more than 15 percent but less than 20 percent, the borrower will generally pay about 0.32 percent of the loan amount annually in PMI premiums. That totals about $40 a month for a $150,000 mortgage.

But PMI is not fool-proof. Utah County homeowners can sometimes eliminate private mortgage insurance by refinancing their loans -- even if they continue to owe more than 80 percent of the value of the house. And there are new laws that require lenders to remove PMI if a mortgage does not exceed 80% of the value of a home. But, this new law only applies to loans recorded after July 29, 1999. If a borrower has a loan that was recorded before July 29, 1999 and thinks he might like to cancel the mortgage insurance after a few years, he could, depending on the conditions and whether the insurer allows cancellation.

The most common method used to avoid paying private mortgage insurance is for a borrower to get a "piggyback loan" - a second mortgage that allows him to make a 20 percent down payment. For example, a borrower can pay 10 percent down; get a first mortgage of 80 percent, and a second mortgage of 10 percent. The piggyback loan is always at a higher rate. The borrower is not paying for PMI, but is still making a monthly payment, probably for roughly the same amount as PMI. A piggyback loan also has an income tax advantage because it allows the borrower to deduct the interest from his taxable income. However, he can't deduct the cost of PMI.

For Utah County homeowners who owe between 80 and 83 percent of the house's value, the best way to avoid PMI when refinancing the loan is to find a lender that won't immediately sell the mortgage on the secondary market. Generally, to eliminate PMI, a homeowner must have a spotless mortgage payment history and be able to fit a certain profile of borrower. Examples of good candidates include:

· A homeowner who is refinancing a mortgage and has had no late payments in the last year or two.

· Someone who is barely over the 80-percent PMI threshold. (For example, if he owes $85,000 on a $100,000 house, he probably won't get a break on PMI, but someone who owes $82,000 might.)

· A homeowner who is otherwise creditworthy -- has a high credit score, a stable job, and a good ratio of income to debt.

Even with these credentials, the homeowner must try hard to find a lender that keeps mortgage loans on its books and is willing to take the risk. Most mortgage lenders don't hold loans for long. They bundle mortgages together and sell them to large investors such as big banks, insurance companies, pension funds and institutions such as the Federal National Mortgage Association, known as Fannie Mae.

The reason for selling mortgages is to free up money to lend again because the original lender gets most of its money (and profit) from fees and the sale of the loan, not from interest. The investors who buy pools of loans ultimately earn the interest that borrowers pay.

PMI assures investors that their bundles of loans won't go bad. Homeowners who put less than 20 percent down are more likely to default. That is why they're required to have private mortgage insurance. Otherwise, the loans won't be marketable.

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