Atlanta Real Estate Tips

How To Buy A Home in metro Atlanta

Financing Your Home

• Depending on current interest rates, seller financing may be an option.  You can always ask if the seller will finance the mortgage for you.

• The seller's mortgage may also be assumable, depending on the terms of their mortgage.

• Ask your Metro Brokers real estate agent to help you prepare.

Questions to ask the lender

• What are the differences between the various types of adjustable-rate loans and fixed rate loans?

• Is the mortgage open-ended?  Can you borrow up to the amount of principle you've paid to make home improvements?

• Will mortgage insurance be required for loans other than FHA-insured or VA guaranteed mortgages?

• How much principle must be paid before the insurance requirement is dropped? What are the premiums and are the premiums refundable if you prepay the mortgage?

• What reserves, such as those for property taxes or hazard insurance, are required?  How long must you pay into these reserves?  At some point, will you pay these costs directly?

• What fees will be charged at closing, including such things as points, loan origination, abstracts, attorney's fees, appraisals, termite inspection reports or credit reports?

What the lender will ask

• What is your total monthly income (including alimony, child support, savings interest and dividends)?

• What are your assets?  These include bank accounts, stocks and bonds, real estate, retirement funds and so forth.

• What are your liabilities?  These included installment loans, charge cards, auto or real estate loans and other debt.

• What are your anticipated housing costs?

• Do you have a copy of the contract of sale?

• Can you provide credit references, including account numbers and balances on loans?

• What is your job history?

Understanding financing options

The number and variety of financing options can seem overwhelming at first, but most fit in one of these main categories:

Conventional financing
Conventional mortgages are labeled as such to differentiate them from government-backed loans, such as FHA or VA loans.

ARMs
The interest rate on an adjustable-rate mortgage changes throughout the term to stay current with present interest rates.  ARMs are most popular when rates are relatively high and appear to be dropping and when the difference between the ARM and fixed-rate is greater than 2 to 3 percent.

Standard fixed-rate mortgages
This traditional mortgage option is a loan with a constant interest rate and level and equal payments during a set period of time.  These loans are predictable and particularly suited to people with steady incomes.  These mortgages are most competitive against the adjustable-rate mortgage when their rates are less than 1.5 percentage points apart.

Farmers Home Administration (FmHA) loans
The government makes these loans available to persons of moderate to very low income in rural or non-metropolitan areas.

FHA-insured loans
The Federal Housing Authority will insure a mortgage on a new or existing single-family house for up to 97 percent of the property value.  Down payments on FHA-mortgages are low, and the loans are assumable.

VA-guaranteed loans
The Veterans Administration guarantees lenders against loss if a property is foreclosed due to default.  These loans are available to eligible veterans and may be used to buy, refinance, construct or repair a house.

Settling up with the lender

• Within three days of applying for the loan, your lender should issue you a good faith estimate of the fees charged for closing.  This estimate may not include deposits for hazard insurance or property taxes.

• Loan origination fees are a percentage of the loan that cover the lender's administrative costs.  The loan discount, called points (with each point being 1 percent of the loan), is extra interest paid to the lender to make up the difference between market interest and the interest of the loan.

• Other charges at closing may include the costs of a survey, appraisal or inspection, as well as the lender's services in obtaining mortgage insurance for you.  If you assume a mortgage, you'll pay an assumption or transfer fee.

• Charges for fees include title/abstract searches and recording and transfer charges.

• Mortgage interest, the first year's hazard insurance, and first year's mortgage insurance (if required) are paid to the lender in advance.

• Reserved deposits used by the lender to pay for hazard insurance, property taxes and possibly mortgage insurance are paid at this time.

• Commissions and other fees include a variety of services, such as document preparation, notary services, handling the schedule, warranties and others.

Rely on the expertise of your Metro Brokers real estate agent during the critical final stages of the home buying process.  He or she can answer questions, serve as your representative, and attend to the important details that affect your purchase.

Final details and closing the deal

• Take a final walk-through of the property just before closing to see that everything is as it should be.  If there are any problems or unresolved issues, take care of them before closing.

• Sign the not promising to repay the loan and mortgage, with the house as your security for the note.

• Sign the other papers fulfilling governmental regulations and transaction information.

• Look carefully over the numbers in the closing or settlement statement - the last one to appear - before signing.

Here's the day you've been waiting for.  The papers are in order and money has been exchanged.  You're handed the keys - the home is now yours!

Deciding to buy
How much house can you afford?
What type of house do you want?
Choosing a neighborhood
Picking the right home
Making the purchase: Extending the offer
Protecting yourself
Calling it your own