F.A.Qs


Here is a collection of frequently asked questions to assist you in answering some of the many questions you may have with respect to buying, selling or leasing a real estate property. 

We at Preferred International Realty are here to serve you.  If you have any questions related to the real estate marketplace just pick up the phone and give us a call.  

We are here to assist you!

PREFERRED
INTERNATIONAL REALTY

Sherry Zimmer, Broker

Office: (201) 862-0862

  

AM I READY TO BUY A HOME?

IS PURCHASING A HOME BETTER THAN RENTING?

HOW DOES THE LENDER DECIDE WHAT I CAN AFFORD?

WHAT DO I LOOK FOR WHEN INVESTIGATING A NEW HOME?

WHAT SHOULD I LOOK FOR FROM A HOME INSPECTION?

HOW DO I MAKE AN OFFER?

WHAT ARE MY EXPECTED CLOSING COSTS COMPRISED OF?

WHAT DO I GET AT CLOSING?

ADDITIONAL INFORMATION

 

AM I READY TO BUY A HOME? 

Ask yourself the following questions:

•                Have I been regularly employed for the past couple years?

•                Is my income steady and reliable?

•                Does my credit reflect the regular payment of bills?

•                Do you have enough money for a down payment?

•                Does your income sufficiently cover other regular monthly bills?

•                Can you cover a monthly mortgage, taxes and insurance expenses?

If you answer "yes" to these questions, you are ready to buy a home.

 

IS PURCHASING A HOME BETTER THAN RENTING?

While many comparisons exist, it is not just the monetary issues that must be considered with respect to answering this question. The one primary advantage of renting is being free of most regular maintenance responsibilities.  However, you lose the opportunity to build equity, take advantage of tax benefits, and protect yourself against future rent increases.  Home ownership also enables you to freely decorate your home without landlord approval.

Home ownership has many benefits.  You build equity every time you make a mortgage payment.  Your investment enables you to take advantage of tax breaks.  You will be subject to additional financial responsibilities such as insurance, real estate taxes and maintenance but the freedom, security and stability of home ownership is beneficial.

 

HOW DOES THE LENDER DECIDE WHAT I CAN AFFORD?

Any lender will consider your debt-to-income ratio.  This is a direct comparison ratio of your gross income to housing and non-housing expenses.  Non-housing expenses include such things as automobile, student loan, alimony or child support payments.  Today lenders are also very interested in qualifying you based upon the amount of cash available for making adown payment as well as covering closing costs in addition to evaluating your underlying credit scores.

 

WHAT DO I LOOK FOR WHEN INVESTIGATING A NEW HOME? 

While this varies for each and every person, it is best to start by evaluating these basic criteria:

•                Is there enough room currently and for future expansion?

•                Do the number of bedrooms and bathrooms fit your needs?

•                Is the lot and outside yard size sufficient?

•                At first glance, does the home appear structurally sound?

•                Upon initial examination do the mechanicals and appliances work?

•                Does your existing furniture fit into the floor plan and space?

•                Will I have enough storage space for the rest of my belongings?

There is no rush in picking a home.  You should take the time to visit several properties before you make a decision to place an offer.  That is where your selection of a realtor makes the difference.

 

WHAT SHOULD I LOOK FOR FROM A HOME INSPECTION?

While a qualified home inspector checks the safety of your potential new home the primary focus is upon its structure, construction, and mechanical systems.  There is no valuation as to its value other than what it will cost for repairs to the following:

•                Electrical System

•                Plumbing & HVAC

•                Foundation, Ceiling, Walls, Roof & Floors

•                Presence of Potential Pests 

If possible get the home inspection before you make a final offer and if you can, attend the inspection.  Regardless the home inspector will be able to offer you and unbiased and objective opinion on your home as well as be able to answer questions about the report and any problem areas. If you have additional concerns this is the time to speak up.

 

HOW DO I MAKE AN OFFER?

We will assist you in this part of the process by:

•                Accurately completing the legal description of the property

•                Using comparative recent sales to determine the offer price

•                Determining the amount of earnest money necessary to close

•                Assisting in determining a down payment and financing options

•                Drafting a complete offer sheet covering related standard details

This is why you have hired a realtor.  Listen to what is recommended as their experience is very critical at this stage of the process.

 

WHAT ARE MY EXPECTED CLOSING COSTS COMPRISED OF?

While this depends upon variances in local areas, closing cost are usually made up of the following:

•                Attorney or Escrow Fees

•                Per Diem Property Taxes & Interest

•                Loan Origination, Recording and Survey Fees

•                First Mortgage Insurance Premium

•                Title Insurance

 

WHAT DO I GET AT CLOSING?

•                HUD-1 Form Settlement Statement, HUD-1 Form

•                Mortgage Note

•                Mortgage or Deed of Trust

•                Binding Sales Contract

•                Home Ownership & the Keys

  

ADDITIONAL INFORMATION

Filter:

Buyers

Can a home depreciate in value?
Is an older home as good a value as a new home?
What are closing costs?
What does FSBO mean?
What is a "One-Time Show" listing?
What is a broker?
What is a contingency?
What is a debt-to-income ratio?
What is a Multiple Listing Service (MLS)?
What is a REALTOR®?
What is an escrow officer?
What is homeowners association (HOA)?
What is the difference between being prequalified and preapproved for a loan?
What is title insurance?
What's the Difference between a "Listing Agent" and "Selling Agent"?
Why should I use a real estate agent?

Mortgage

Are lenders limited in the amount of escrow funds they can collect from borrowers?
Can I pay my own taxes and insurance?
How can I avoid private mortgage insurance?
How is interest calculated on a mortgage loan?
How long does the loan process take?
How much time will it take to close my loan (sign the loan documents)?
Is there a minimum credit score?
Must I use the mortgage company that my builder directs me to?
Should discount points be paid to lower (buy down) an interest rate?
What are the benefits of doing a first and second lien conbination?
What benefits do I receive from private mortgage insurance?
What do I do if I receive a tax statement?
What does Prepaid Interest mean?
What does the origination fee cover?
What is a gift letter?
What is a lock in?
What is an ARM loan?
What is an escrow account?
What is my credit score and how is it calculated?
What is PITI and what does it stand for?
What is preapproval or prequalification?
What is underwriting?
Why did my mortgage payment amount change?
Why does the title have to be cleared before I can get a mortgage?
Why is the Annual Percentage Rate (APR) on the Truth in Lending Disclosure higher than the rate shown on my note, which is the rate I thought I chose?

Sellers

Can I back out of my contract with one buyer and accept a new, higher offer from a second buyer?
Do I have to sell to the person with the highest offer?
How should I price my home?
Is there a "best time" to put my house on the market?
What are comparables or comps?
What are disadvantages of pricing my home on the high end?
What does an appraisal mean?
What is a counteroffer?
What is an "Exclusive Right to Sell" listing?
What is an "Exclusive Agency Listing"?
Who is responsible for making repairs, if any, as a result of home inspection reports conducted for the buyer?
Why should I use a real estate agent?