First-Time Home Buyer

What Contingencies Are In My Purchase Offer?

What Contingencies Are In My Purchase Offersusan rupert1

What Contingencies Are In My Purchase Offer – When writing an offer, there are certain contingencies you should be aware of. Contingency is essentially a word for “a way of qualifying your obligation to fulfill a contract”. Purchase offers have contingencies built in that need to addressed before closing on your new home. So what contingencies are typically included in an offer?

Financing

A financing contingency is important and can clarify the financial implications moving forward. This will help to make the sale about you, as the buyer, and will help you to secure an acceptable loan or other type of financing that you are using to purchase the home.

Insurance

Depending on the location of your new home, you might want to consider an insurance contingency. This will help to protect you in the event of a natural disaster like earthquake or flood. You have the ability to make contingent on receiving an insurance commitment from an insurance agent in writing.

Appraisal

Appraisal contingencies can work in favor of the buyer or the seller at any given time. If the buyer can’t get an appraisal that is at least the sellers asking price, the buyer has the ability to walk out of the agreed upon deal. On the other hand, if the buyer is unable to get an appropriate appraisal, they can ask the seller for a lower purchase price. If the seller then refuses, they have to ability to back out of the deal.

Seller Contingency

As a buyer you have the ability to include contingencies in your home offer, so the same goes for the seller. The seller has the ability to put contingencies on the sale of their home to you. For example, they can make the sale of their home to you contingent upon whether or not they’re able to find a new home to move into in the given time period.

Inspection Contingency

Before you purchase the home you can have the home inspected by a professional. If all looks good and the home passes an inspection you can sign off to remove the contingency. If a few issues pop up in the home inspection you may be able to submit a request to remedy to the seller. A request to remedy allosw you to make some of the repairs a part of the purchase contract and negotiate for the seller to help you remedy certain issues with the home. Although not always necessary, it is an option.

Before writing an offer on a home, make sure you know what contingencies are built into the contract your signing so you know your timeline, if you want to add any, or if you want to waive any. If you have any questions, please don’t hesitate to contact me!

Helpful Tips For Buying A Home After College

For young adults just out of school, buying a home is a great opportunity to build wealth and to build your credit. With your initial salary, it may be tough to afford a mortgage and with minimal savings, it could be tough to get approved for a loan. Here are some helpful tips to make it happen…

Getting Approved For A Loan

  • Save During College: If you are still in college, get a job and start putting money away. Even a couple thousand dollars may be the difference between getting approved and not getting approved.
  • Get A Partner: Purchasing your first house with a good friend is a smart idea. By splitting ownership, the hefty down payment could be more affordable.
  • Get A Private Loan: If you think the property could be a good investment, consider presenting your case to a family member for a private loan to help with the down payment. You may be able to convince your relative to not charge interest but instead receive a part of any gains made on the house on the back-end.


Affording The Monthly Payments
After you have been approved for a loan, your next step is budgeting to pay your monthly payments. Unfortunately, in most cases, your monthly payment will also include taxes and insurance which seems to make many properties transition from affordable to un-affordable. Here are some ways to make the payment less painful.

  • Interest Only: Depending on the rates and the environment, it may make sense for you to do an interest-only loan. This can help keep the payment down. This should only be  your option if you are sure you will not be in the property longer than a few years.
  • Find Renters: Make sure your friends have secure jobs and will be able to pay you each month. Avoid freeloaders. Also, consider drafting basic lease agreements to protect yourself.


Position Yourself For The Future
Eliminating debt and putting money away are the basics of positioning yourself. Owning a home at a young age may be an opportunity to continue this process. While your home is unlikely to double in value and you probably won’t pay off much of the interest, you will be investing in an asset and building your credit at the same time. Furthermore, you can take advantage of the tax breaks that home ownership brings.

Being a homeowner for the first time is a great learning experience. You are forced to learn to take care of something and take pride in something you own. You will learn the process of getting a loan and closing a large transaction. It is a great value and learning experience.

For more information check out the original article here.

Can You Buy A Home With No Down Payment?

Oftentimes, first time home buyers are intimidated by the thought of a down payment. Do not let the idea of paying  a lot of money upfront discourage you from searching for your perfect home. If you know where to look, it may not be as difficult as you think to buy a home with little to no money down. Here are some options to look into before buying a home.

 

OHFA’s Down Payment Assistance Grant

Do research on whether or not you’re eligible for one of the grants from the OHFA. If you qualify, you can choose to take advantage of the Down Payment Assistance Grant and they will issue a grant in an amount of 2.5 percent of your home’s purchase price.

 

Conventional Loans

A conventional zero down payment loan can usually be available to people with high credit scores and carry higher interest rates. The mortgage loans usually require a down payment anywhere from 20 to 30 percent of the value of the house being purchased.

 

VA Loans

This type of loan is for veterans and others who qualify, and is usually the best deal around. You can get a loan for no money down and there is no requiremnt for mortgage insurance, because the cost is picked up by the U.S. government. A funding fee of 2.15 percent of the loan amount will need to be paid if you take out the loan with no money down. However, the cost can be rolled into the loan amount so you don’t have to pay it upfront.

 

FHA Loans

The Federal Housing Administration is often the first place most homebuyers look when they are seeking a low-down-payment mortgage. A down payment can be as little as 3.5 percent. Unfortunately, the fees can add up over time so do your research to make sure that this is the best option for you.

 

Creative Zero Down Payment Options

A number of other creative purchasing options exist. Sometimes the seller of the house is willing to finance your home purchase on their own. So, instead of making monthly payments to an institution, homebuyers would make payments to the seller directly.

 

Buying a home with little to no down payment isn’t always easy to find. However, if you know where to look, then you have a better chance of finding the best option for you.

 

To learn more about buying a home with no down payment, visit here.

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What Are the Responsibilities of a Co-Signer?

Are you considering being a co-signer for someone’s home loan?

Many people need a co-signer on a home loan. If someone has poor or no credit, an unsteady job, a high debt-to-income (DTI) ratio, or other credit issues, it can be nearly impossible to be approved for a home loan. In these cases, a person can have a mortgage co-signer who “agrees to back up your loan, guaranteeing the lender that the loan will be repaid”, according to The National Association of Realtors®. Having a co-signer greatly increases your credibility as a borrower and makes it more likely that you will be approved for a loan. However, picking the right co-signer is vital.

Here’s what you need to know about the responsibilities of a co-signer:

If the main owner of the loan fails to make payments, the co-signer is financially responsible for the loan and their credit score could suffer.

Co-signers should be:

  • A trustworthy person

  • Have good credit/someone who will be approved by lenders

  • Willing to be part of a long lasting agreement

  • Have a good income

  • Be 18 years or older

  • Be willing to have their income, credit history, credit score, assets, and debts scrutinized by the potential lender

Agreeing to be a co-signer for a home loan is a very serious agreement, so it is best to draw up a formal contract that both parties will have to sign. “A real estate lawyer can help you and your co-signer draw up an agreement that specifies who will pay the bills, who will occupy the residence, and contingencies, like what happens if the main mortgage holder cannot make the payments”, according to the National Association of Realtors®. This contract can help protect both the main owner of the loan and the co-signer against any fall-outs or worst-case scenarios.

Who would make a good co-signer?

  • A lot of people ask friends or family members to co-sign for them because these types of relationships are often built on trust.

  • Younger people, perhaps someone purchasing their first home, may ask their parents to co-sign on the mortgage.

  • With married couples, typically a spouse will be the co-signer for a home loan.

  • Siblings

  • Aunts or uncles

  • Grandparents

  • Business partners

  • Long-time friends

The National Association of Realtors® says that in an ideal agreement, “the co-signer should never have to hear from the bank after the papers are signed”. Before you ask someone to co-sign for you, be sure that you are ready for the responsibility that is owning a loan.

To read more on the responsibilities of a co-signer, check out this article.

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5 Apps to Help You Discover Your Perfect Home

Nowadays there is an app for everything. Whether you’re looking to get in shape, eat healthier or stay organized, there is an app for that, which many people often use. So, why should discovering your dream home be any different? There are apps that will help you begin your search, determine if the sale is financially right for you, and there are even apps that will help you envision yourself in a new home. Here are five apps that will help you discover your perfect home and make sure that it’s a perfect fit for you.

 

Essential Real Estate Dictionary

If you’re nervous about working with a realtor to find your perfect home, don’t be. For all of the confusing jargon that you don’t understand, use the real estate dictionary app. Not only will the app serve as an essential reference guide for all things real estate, buy the seller and agent will think you’re a pro with how much you know.

 

Zillow

If you already know which area you want to live in, this will be the perfect app for you. Drive around the neighborhood to see how much each home is worth or if any of them are for sale. It’s also a great tool if you don’t know where you want to live. You can pretty much drive around any neighborhood, whether it is familiar or not, and find out exactly how much each home is worth and if they’re for sale.

 

Mortgage and Home Loan Calculator

There are a ton of mortgage and home loan calculators in the app store. It’s all about finding the right one for you. The secret is that they all do pretty much the same thing, so stick to the free ones. All you’ll need to do is plug in number and bam, you’ll know your price range.

 

ColorChange

If you’re viewing a house and you absolutely hate the color of the walls, don’t rule it out just yet. The ColorChange app allows you to snap a picture of any room and it will give you the ability to view it with a different color on the walls. This will also be useful once you move into a new home and can’t decide what colors you want each room to be. You can see it before you actually make the commitment in doing it.

 

Houzz Interior Design App

This free app will help you get settled into your new home and will help reiterate the fact that this new home is perfectly yours. You will be given tips and tricks from the internet’s largest database of interior design photos. You can pull certain looks from different ideas and make everything 100% yours.

 

Using these apps will help you find your dream home more easily and efficiently. So get to downloading them and start your search for your new home!

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How To Get Sellers To Pay Your Closing Costs

 

You already know that buying a home can be an expensive process. On top of spending the money to purchase your home there are closing costs and inspection fees that can add up. You don’t want the prospect of paying those additional fees to deter you from buying the home of your dreams. Here are four ways to get sellers to pay your closing costs.

 

Pay the Full Asking Price or Close to It

Buyers need to understand that it isn’t an obligation of the seller to pay for the closing costs, it is just a nice gesture on their part. Get on the seller’s good side by offering to pay their asking price, or close to it, if they pay the closing costs. If you are in an acceptable range of what they’re looking for, they will be more than happy to take your offer.

 

Do Your Research

Do your research to find out if sellers have paid the closings costs for other homes in your area. What is common in Florida may not be common in Ohio, and you don’t want to insult the seller by demanding that your closing costs be covered. Ask a realtor if this is a common practice and if it is, go for it!

 

Avoid Excessive Demands

If you’re going to ask the seller to cover the closing costs, be willing to accept the home as-is. Sellers don’t want to spend excessive amounts of money updating their home before it sells. However, you might want to ask the seller to pay the cost of anything that didn’t pass the home inspection. Just be aware of what you’re requesting because excessive demands can potentially scare them away.

 

Meet the Seller Halfway

If they seller absolutely refuses to pay the closing costs, see if they’ll meet you halfway. Paying half of the closing cost is a lot more appealing and wallet-friendly for both parties. In the end, both the buyer and seller will come out happy.

 

If you absolutely can’t get the seller to budge, ask your lender if they can include the closing costs in your loan. Being knowledgeable about your options will ultimately help you in the long run. Negotiate and do your research to get the best deal possible so that closing costs are not a factor in purchasing your dream home.

 

For more information on how to get sellers to pay your closing costs, visit here.

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Susan Rupert Group

Realtor, ABR, CRS, SRES, MCNE, e-PRO
Kissinger Bigatel & Brower

2300 South Atherton Street
State College, PA 16801
Mobile/Direct: 814-280-0364
Office: 814-234-4000 ext. 3213
Email: Susan@StateCollegePARealEstate.com

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