Home
Sweet Home
With
interest rates still historically low and the school year winding down, many
people are starting to think about looking for a new home. Whether you’ve done
it a few times before or are a first-time homebuyer, there are many things to
keep in mind. Read the following and don’t hesitate to contact a Bank of
Luxemburg mortgage professional with questions.
Home
Buying 101
With a generally improved employment
picture and continuing low mortgage interest rates, more Wisconsinites are
considering buying a home this year. Whether you have your eye on a starter
home or a new construction, planning ahead can help ensure you’re happy with
your new abode after move-in day.
Maybe you’ve been planning for a while
and are clear about what you want. In any case, be sure to consider whether you
want to live close to your job or particular schools, the size of the ideal
yard, your desire for a garage, the number of rooms, and the composition of the
neighborhood—young families, retired couples, or a mixed group?
You can also benefit from identifying
your lender, such as a community bank. Consider whether it’s important to have
a good relationship with a local banker if questions arise down the road.
Ask friends and relatives for their
recommendations. A lender will pre-qualify you for a loan of a certain amount,
which can help narrow your house search. Based on your credit report, income,
and assets, a lender can also provide pre-approval, guaranteeing a loan up to a
certain amount and shortening the mortgage application process.
You can then contact a real estate
agent who is a buyer’s broker and will help identify potential properties that
fit your needs. You can also look at properties yourself and then contact the
seller’s realtor on your own, but beware that this agent is working in the
interests of the seller. When you’re ready to make an offer, your buyer’s
broker can help you draft the offer to purchase. You may want to include various
contingencies, such as specific repairs or a home inspection to prevent any
maintenance issues or other unwelcome surprises later.
After you reach a deal with the seller,
your lender can help you decide which type of mortgage is best for you—for
example, a fixed rate mortgage where the monthly interest and principle payment
remains the same for the life of the loan or an adjustable rate mortgage (ARM)
where the lender may increase the interest rate over time. Your lender can also
help you apply for government loans, such as FHA, VA, or WHEDA (Wisconsin
Housing and Economic Development Authority) loans.
The last stage of home buying is the
closing, when you sign the mortgage note and related paperwork. Ask about any
item you do not clearly understand. If you are unhappy with any part of the
transaction, several regulations including the Real Estate Settlement
Procedures Act are designed to help resolve problems. Begin by contacting your
lender. Other resources are the Wisconsin Department of Financial Institutions
and the U.S. Department of Housing and Urban Development (HUD) at 1-800-669-9777.
These tips are largely from “Buying a
Home,” a brochure published by the Wisconsin Department of Financial
Institutions. Read it by following the Financing brochure link on this web
page: www.wdfi.org/ymm/brochures/default.htm.
