Buyer Tips -

Misc.

Consider the security of your job: you don’t want to close on a purchase and later find out you are being laid off!

Think carefully about how your family income may change over time: Expenses tend to go up every year, such as: property taxes, homeowner’s insurance and Homeowner Association fees (if applicable).

Consider the costs of your child's education in the future: and how that will affect your budget.

If something seems too good to be true, it probably is!

Don't forget Property Taxes: Find out how much the property taxes will be. Remember that the property tax amount that the seller is currently paying, will not be what you will be paying once you own the home. Your new taxes will be based on the final sales price. Within a few weeks after close of escrow, you will receive a “Supplemental Tax bill” from the County. (if your taxes are impounded with the lender – where you pay them together with your mortgage payment, then your lender will most likely pay them, but you would need to contact your lender to confirm as to make sure you have enough funds in your escrow account to cover the amount).

Don’t forget Homeowner’s Insurance: Contact your insurance agent who provides your automobile insurance to request an estimate (you will need to provide them with the basic property information). Your current insurance company may be able to give you a multi-polity discount so make sure you ask them for this. Also, once you move into your new home and if you install a monitored security alarm system, they may be able to offer an additional discount.

Homeowner Insurance protects you and your lender against losses from fire and lawsuits: Shop around for homeowner’s insurance. The costs and coverage can vary from company to company.

Consider the cost of insurance: A fully paid Homeowner’s Insurance policy is required at closing, so arrangements will have to be made prior to that day. In addition to Homeowner’s Insurance, you may also need flood insurance. Determine whether the home you are interested in is in a flood zone by asking your real estate agent or lender.

Title insurance: A Lender’s policy guarantees to the lender that you are buying your home free and clear of any existing liens. An Owner’s policy will cover you.

If you use an escrow account to pay property tax or homeowner’s insurance: make sure you are not penalized for overdue payments, since it is the lender’s responsibility to make those payments.

Keep in mind that your mortgage interest and real estate taxes will be tax deductible: but how much that saves you depends on your tax bracket. Most homeowners get about 20 percent of their mortgage interest and property tax amount refunded by the IRS.

Settlement Costs (closing costs): include points, fees and charges of the lender, attorney costs, advance mortgage, tax and insurance payments, escrow and title fees, initial escrow impound account funding, etc. These are likely to be several thousand dollars. Get an estimate from your real estate agent early in the process and review final amounts a few days before the closing.

There is a federal law (called the Real Estate Settlement Procedures Act (RESPA) that requires you to be informed about all closing costs and payments in advance on a form called the “Closing Disclosure”.

The escrow closing: Closing usually takes place 30 – 60 days after you sign the purchase and sale agreement. You will receive the deed, sign your mortgage and many other documents and pay the balance of your down payment and your closing costs. Thereafter, the deed is recorded in the County Recorder’s Office in the county where the property is located and title transfers from the seller to the buyer.