The Buying Process

So you’re ready to buy a house!  Understanding the steps involved can help you anticipate what is to follow – as well as be prepared for the unexpected as the process unfolds.

Speak to a Mortgage Broker/Banker – Before you start your house-hunting, you need to know what you can afford in today’s market.  With your Mortgage Pre-Approval Letter in hand you will be treated as a serious buyer by both agents and sellers alike.

House-Hunting – On Long Island 90% of sellers use a real estate agent to sell their home – most of them are listed on the Multiple Listing Service.   In addition to my listings, you can search the entire Long Island Multiple Listing data base from my web site.  I encourage you to register for the Free Home-Finder Service.  You will receive daily updates of homes that meet your criteria from Multiple Listing.  A Home Just For You!  – Once you find your home – and your REALTOR© has successfully negotiated an acceptable price and terms for you – then both parties move toward a contract signing.

Engineer’s Inspection – You will need to arrange for an Engineer’s or Home Inspection as soon as possible.  It takes time to arrange the appointment and then additional time for the report to be finished and delivered back to you.  If you want additional inspections those should be arranged at this time also.

Certificates of Occupancy or “CO’s” – If there are extensions, additions, decks, sun-rooms or out-buildings that have been added – then you will want to check to see if “CO’s” are on file at Town Hall.  In Huntington, you can check first on the Town’s Web Site at    .  If the list is incomplete, you may need to go to the Building Department at Town Hall and request a “Site History Report”.

Attorney – You need to arrange for an attorney who specializes in real estate and is familiar with local housing codes to handle your home purchase.  After the engineer’s inspection report has been received and deemed to be satisfactory, the contracts will be prepared by the sellers’ attorney and sent to your attorney.  After your attorney has reviewed them you will meet with him to sign the contracts.  Your deposit will be placed in the sellers’ attorney’s escrow account when the sellers sign the contracts.

Termite Inspection – If it was not a part of the Engineer’s Inspection, you will have approximately 10 days after the contracts have been signed by both parties to inspect the home for termites.

The Survey – If all “improvements” are shown on the survey, you probably will not need a new one.  However, bank and title company requirements vary on this and you may be required to have a new or updated survey.

Mortgage – Depending on when your closing date is, you will need to apply for your mortgage application as soon as possible.  Once you have signed an application, an Appraiser will inspect the home and send a report to the bank.  A targeted Closing Date is discussed after the attorneys receive the written confirmation of mortgage.  One word of advice:  Don’t just look at the interest rate; look at the terms, any price adjustments and ALL FEES that you will be required to pay.

And Don’t Forget – you will need to Select a Moving Company,  Register your Children in their New Schools, Arrange to transfer all Utilities to Your Name – and then Pack, Pack, Pack!  I have several books about Children and Moving.  Ask me about them.

Closing – Prior to the Closing Date, your agent will arrange for you to “walk-through” the house that you are purchasing.  Your attorney will advise you what certified funds and paperwork you will need to bring that day.  And then the big day finally arrives!  Congratulations on Your New Home!  May you have many happy memories ahead!

Four tips for Long Islanders on how to secure a home loan.

Looking for a home on Long Island? Getting pre-approval for a home loan should be a first step in the home search process. When applying for a home loan, these tips can help ensure that your loan application will be approved.

Check your credit score. Your credit score is used to assess how much of a financial risk you pose to the lender. The higher your credit score, the lower the risk that you will default on your mortgage payments. The first thing you should do is make sure that your credit report is accurate. Everyone can view his or her credit report once a year at no charge thanks to the Fair Credit Reporting Act (FCRA). Your free credit report can be ordered from www.annualcreditreport.com. There are no quick fixes to improving your credit score. Black marks from late payments or unpaid bills remain in your credit history for seven years. While you can’t change your credit history overnight, you can improve your credit score if you pay down any other loans.

Bring proof of income. Lenders will require you to document your income. You will need to show your W-2 forms from the previous year or the past three years of tax returns if you’re self-employed. You might need documentation for other assets as well.

Increase your down payment. Ask for less money by putting more money down. Doing so can improve the likelihood of the lender approving your loan. To avoid paying PMI (Private Mortgage Insurance) you will need to pay a minimum of 20% cash with a maximum mortgage of 80%.

Don’t mortgage more than you can afford. Enjoy your home. Don’t be a slave to it. Speak to a couple of mortgage brokers to discuss what you can afford and the best mortgage product for you. Rates are important – but so are the fees added on. Ask them to itemize any fees that will be charged.

With your Mortgage Pre-Approval in hand you are now ready to start the "Home-Buying Process". Not only will you feel confident about what you can afford, but when you find a home, your Realtor will convey to the seller that you have been pre-approved for a mortgage. Sellers consider Terms, as well as Price, when accepting an offer to purchase their home.

Insurers keep a history of your home on a huge database.

Thinking of buying or selling a home? Then you need to know about CLUE Reports! Insurance companies use a database that tracks claims on homes and homeowners. This Comprehensive Loss Underwriting Exchange Property Database (CLUE) can tell an insurance company if there has been a claim for water damage and the amount of the claim amount. If the insurer decides that the home is too risky he can refuse to insure that home, and without homeowner’s insurance, the purchaser cannot get a loan. For more information about CLUE Reports and how you can obtain a Free Report for your home, you must read this excellent article at MSN Money!.