Make a comparison of your income and debt payments.  Your debts may include child/alimony support, student loan, co-borrower, car loan, store cards, credit cards and the PITI (principal, interest, property taxes and insurance).  The PITI should normally be between 28% to 33% and the total debt payments between 36% to 38%.  If you are buying income producing property, the rental value may be added to your gross income.  This may seem very strict rule but it protects your daily life too.  After all, you do need to survive, and maintain/increase the ability to meet your financial obligations.

 

Before going to a mortgage broker, make sure you have the followings:

 

1.  A list of all places of residence for last 2 years.

 

2.  A list of all places of employment for last 2 years i.e. employer name, address, phone number and the income.

 

3.  W-2 forms for the last 2 years.  Self employed persons need complete Federal tax returns.

 

4.  Bank statements for last 2 months plus the most recent investment statements i.e. mutual funds, stocks, and 401K etc.

 

5.  Your total earnings for the current year and pay stubs for the most recent month.

 

Reduce your revolving accounts to the minimum.  Start the ones with lowest outstanding balances.

 

Make a list of your liabilities and assets.  You need to reduce the liabilities and increase assets.  Avoid to borrow money for down payment.  However, you may use gifts and/or grants from parents, children, friends, and community groups.

 

Pay attention to your credit records.  You must have very good reasons for any missing and late payments.  The credit scores reflect your borrowing and repayment history.  Most lenders will obtain reports from the following 3 credit-reporting agencies:

 

 

While on this subject, let us advise you to ask for a free copy of your cedit report within 30 days as and when you are refused credit by any organization.  Please check it minutely and address those problems.

 

Now calculate the cash reserves.  Depending upon various lenders, and your credit scores, you may need 0% to 20% as down payment.  Should you decide to make less than 20% downpayment, you will be asked to buy PMI (Private Mortgage Insurance).  There are various types of loans.  Conventional loan is neither guaranteed nor insured by the federal government.  The FHA (Federal Hosuing Administration) loans are available to all borrowers.  Buyers with appropriate government service may qualify for VA (Veteran Administration) loan.  First time buyers may qualify for State-backed loans.

 

We feel we have well prepared you to go boldly to a mortgage broker of your choice.  Don't know anybody  - no problem, we  are Loan Originators and would be glad to assist you without any obligations.  You have a choice.  You may use our services for Insurance, Mortgage and/or Real Estate.

 

As loan orinator, we will explain the requirements, make some math calculations and issue a letter of pre-qualification or pre-approval. 

 

Now you are ready to buy a house.  Your know your income, your know your expenses, and most important you have determined your purchase price.

 

Here again, we would suggest to contact a Realtor - well known to you.  Don't know anybody - no problem.  We are licensed Realtor in all parts of Maine, Massachusetts and Rhode Island.  We have experienced and professional associates in other States as well as over 50 countries abroad.  After all, our Principal Broker is a Certified International Property Specialist (CIPS) and Graduate Realtor Institute (GRI).

 

We would require a copy of your pre-qualification, pre-approval or commitment letter which will indicate your maximum buying power.

 

Based upon your requirements, we will provide you information on all available properties.  We will update you on daily basis.  We will be available to address your concerns.

 

Once you have made your selection,  just drive by those properties to see the exterior as well as the neighborhood.  It will save you plenty of time.  There are all sorts of properties, good and bad, desirable and undesirable.  On your way, you may find few more signs for sale.  Those houses may be for "sale by owner" or not meeting your search criteria.

 

Please keep in mind that majorty of Realtors is member of the National Association of Realtors and is bound to cooperate with each other.  In other words, it really does not matter which Real Estate Agency is exclusively selling a particular property.  Any listing agent has to work in the best interest of the seller.  In order to do so, easy access is allowed to the cooperating Realtor and equal importance given to the "offers" so received. 

 

As soon as you have found properties, you would likely be interested, we will make a showing appointment.  Please note that in many cases the sellers need 24 to 24 hours notice, especially when a property is already rented.  At this time, we would ask that all decision-making buyers come together.  It gives you a helping hand to see the house in details and ask any questions.  Most important is that it helps form a joint opinion.

 

You are most likely to see more than one properties.  The same properties are also seen by other buyers.  There is always a shortage of good properties, especially when they are priced rightly.  Such properties may even go above the asking price.  We are trying to emphasise upon you that if you really like a property, come up quickly with a most reasonable offer.  You may not have another chance to revise your offer.  It's seller's market.  There is always a possibility of other offers, and the seller is most likely to accept the highest bid with least contingencies.

 

We would be glad to draft your offer and request your check for the earnest money.  Once your offer is accepted by the seller, it will be deposited in an escrow account.  The money will be disbursed to the seller only on the day of closing.  At the same time, the money cannot be refunded to you without a release from the seller.

 

On the acceptance of your offer, you have the right to get home inspection within 10 days.  Should you desire, we may request the seller to allow home inspection before you consider making an offer.  We will provide you info on various home inspection organizations.  You are free to contact anyone you like or the one available.  A home inspector will inspect the property and provide professional opinion.  Home inspection is done at the buyer's expense.

 

Should there be any concerns, you have an opportunity to renegotiate your offer.  Once mutually agreed, you are all set to sign purchase and sale agreement with further payment of already agreed amount.  It is also the time to provide a copy of P & S and all other papers to your mortgage broker to process the loan approval.  The lender issues a commitment letter within the stipulated time, home insurance is obtained about a week before closing and you are ready to sign papers at the closing agent's office.

 

Please note that unless you sign an agreement with a Realtor to represent you, all of us generally represent the Seller.  In most of the cases, the commission is still paid by the seller.  Should a Realtor be representing both the buyer and the seller, it must be disclosed to both.  Should there be no compensation offered by the Seller to the "Buyer's Agent", your offer to purchase must mention the amount of compensation to be paid to your Agent.

 

 

Now you are ready to sign the papers.  The closing attorney will explain you every paper you sign, provide you with a complete set of those papers, and register the Deed at the Registry office, which give you legal "Bundle of Rights", namely (a) Possession (b) Quiet Enjoyment (c) Disposition and (d) Control.

 

We have tried our best to explain the procedure in details but there is always a possibility of errors and omissions.  Please perform your due diligence instead of holding us responsible.