Buyer How To Purchase
Starts with Buyer Finances

Information for buyer how to purchase a house starts with a buyers’ financial ability to pay all the costs and arrive at the settlement table ready, willing and able to complete the transaction. Buyers must always start the purchase process with the end in mind. Total cost to complete the transaction is most important to understand now - before you commit to the process.

The process includes the obvious steps for the buyer how to purchase and additional items you need to know :

• The overall sequence is the list in the left column under the “buyer” heading.
• The terms and jargon you need to understand are in each section you wish to investigate.
• The costs involved for both settlement and ‘other’ personal costs that may occur.
• Protection from risks/mistakes, vulnerability from not understanding the terms and know your exit points as a failsafe.
• How to deal with the stress, ride the turbulence, adjust to possible frustration of terminating this one, and start a new transaction.
• How to be ready physically, mentally and emotionally for settlement day.

Itemized Costs And Your Possible Costs

Your most accurate estimate for your closing costs will be from your mortgage company - and they will be in writing. These costs will not vary more than 1% to the final costs itemized on the HUD-1 settlement sheet. Buyer settlement charges vary up to 4% of the purchase price, and does not include the mortgage down payment.

New federal law prohibits gross understatement of closing costs by the mortgage company. This means the buyer will not have surprise costs added at the settlement. Understand all your costs, which include :

• Mortgage company fees connected to your application and loan.
• Title company fees including title insurance, transfer tax, deed recording and miscellaneous fees.
• Reimbursement to the seller for taxes prepaid.
• Cash paid prior to settlement for earnest deposit to accompany the agreement of sale, mortgage company credit check and appraisal, your inspections and insurance.

Spending May Put Your Mortgage in Jeopardy

Other additional costs to consider are moving costs, new cell phone plans, new cable TV plans, budgeting for utilities (gas, electric, water, sewer, trash), decorating and painting materials, general cleaning, maintenance and repairs of minor items from the inspections or your preference, gardening and lawn maintenance equipment, ladders and tools, and of course furniture for inside and outside.

Mortgage lenders are now required to recheck your credit rating and finances, and verify your employment the day prior to settlement. If their research shows excessive spending that will change your debt to earning ratio then the mortgage terms may change with an increased interest rate and down payment – at the very least, this delay settlement. Loss of employment will automatically terminate the mortgage.

The moral of this doom and gloom is BE CAREFUL!!

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