Mortgage F inancing With A Personal Touch

Buying Your HomeMartha Harvey - Senior Loan Officer, NMLS# 33096

About MarthaSENIOR LOAN OFFICER, NMLS#33096

• Started in the mortgage industry in 1989

• Helped thousands of borrowers

• Over $1 Billion in loan volume

• Licensed in Massachusetts and New Hampshire

• My favorite customers are first time homebuyers and the ability to walk them through the entire home buying process

• Tougher Loans and finding a home loan for everyone is my niche

• I started in the industry as a processor, underwriter. I know the process from the beginning to the end which gives me a unique take on getting the job done.

Buying Your Home

You’re ready to buy a home! We’ll focus on the home-buying process — the steps you need to go through on your way to shopping for, selecting and making an offer to purchase on your version of the American Dream:

What to look for in a homeHow real estate agents can helpWhat to do before you make an offer on a propertyHow to make an Offer to Purchase

What To Look For in a Home

Once you’re ready to start looking for a home, think carefully about what you want — there is so much to consider: Sales price. Neighborhood. Distance to work, schools, shopping.

If you have children, you may want to know if there are other kids in the neighborhood and whether schools and playgrounds are nearby. As a working person, distance and travel time to and from work or the availability of public transportation may be a factor.

You’ll also want to consider the condition of the plumbing, heating, electrical systems, and whether these are up to code. Closet space. Number of bedrooms. The list goes on and on.

*Ask me for Home Buyer Checklist.

How Real Estate Agents Can Help

Real estate agents can be helpful because they know about the local real estate market. Most agents belong to multiple listing services that publish directories of all properties listed for sale in a particular market.

The real estate agent will consult the multiple listing directory for you and determine which properties are available that meet your specifications. He or she will then arrange to show you these properties.

Another advantage of working with a real estate agent familiar with the area you would like to live in, is that he or she will usually have information about such things as school systems, tax rates, water and sewer charges, public transportation and other concerns that might affect your decision to buy a particular home.

How To Find a Real Estate Agent

There are a variety of ways to find a real estate agent:• Ask for advice from a friend or relative who may be able to

recommend a real estate agent. • Meet agents by going to open houses. • Contact the real estate firms that are advertising properties

that you are interested in.

Usually, it’s best to choose one real estate agent — provided that you’re comfortable with that person — and work with that person until you find the home you would like to buy. Real estate agents usually specialize in particular areas. You may want to find someone who knows the area that you are most interested in to assist you in your home search.

Typically, sellers will “list” their home with an agent and agree to pay a commission if the house is sold within a specified period of time. During the time the listing is in effect, the real estate agent will try to sell the property by advertising it and having open houses.

A real estate agent will help you find a home, but understand that the agent usually represents or works for the seller. Therefore, the agent has certain obligations to the seller and will relay any information that you provide. There are buyer’s agents who work directly for the buyer, and may be paid by the buyer, but the vast majority of real estate agents work for the seller.

Real estate agents generally work on commission. Their fee is based on the sales price and is paid by the seller. If another real estate agent finds the buyer, the two will share the commission.

The Real Estate Agent’s Role in the Home Buying Process

Before You Make An Offer

Look at a wide range of homes before making a decision to buy. It is rare — and not well-advised — for a buyer to look at a single home, fall in love with it and purchase it immediately.As a homebuyer, it’s especially important not to buy too quickly just because you have waited a long time and are eager to own a home. If you’ve found one or more neighborhoods that you like, look at enough homes there to get a feel for real estate values, or prices. Then, once you’ve narrowed down the choices, do your homework. Check out the taxes, the school system, the cost of utilities, the quality of community services (such as fire and police) and any other factors that will affect your life once you own the home. If you are working with a real estate agent, he or she may already have this information.When you find a home you really like, take some time to think about it before making an offer. In some markets, you may have to act quickly if there aren’t many homes for sale in the area but there are a lot of buyers. Still, think about your purchase carefully. You are making a big investment. It is important to make an informed decision so that you will be happy with the home you’ve chosen.Once you’ve found the home you want and have checked up on taxes, the school system and the cost of utilities, you’re ready to make an offer.

How To Make An Offer to Purchase

Typically, when homebuyers are ready to make an offer, they meet with the real estate agent and complete the Offer to Purchase form together. You may also want to write your offer with the help of an attorney. Although you can prepare an offer yourself, it is not recommended.

An Offer to Purchase includes detailed, complex information. If you try to write an offer by yourself, you may make mistakes, omit or include items that would put you at a disadvantage relative to other buyers or trap yourself into an agreement that is not in your best interest.

When you are ready to make an offer, get a copy of your state’s form from the real estate agent and look it over carefully. Have either the real estate agent or an attorney thoroughly explain every item on the form to you so that you understand exactly what you are committing to before you actually write an offer.

Making The Offer

• How much you have to spend • How badly you want the house • How many other buyers are interested • How motivated you think the seller is • How much work might need to be done on the house • How the property compares with other similar properties

How much should you offer? There are many factors that may influence the amount you would offer for a home:

How To Make an Offer to Purchase

Other common contingencies include:• Getting a satisfactory home inspection within a specified period of time • Obtaining a termite inspection • Obtaining satisfactory well and septic tests • Requiring evidence that the property meets building and safety code requirements • Obtaining an appraisal with a value not less than the offered price • Getting a satisfactory attorney review of your Offer to Purchase (if offer was not prepared

by an attorney)

ContingenciesContingencies will be an important part of your Offer to Purchase. Contingencies are conditions that must be satisfied or you will not be required to go through with the purchase after your offer is accepted.

Most buyers make an Offer to Purchase contingent upon their ability to obtain satisfactory mortgage financing. Without this contingency, you could risk losing your earnest money, or worse, if you cannot get a mortgage loan.

Counteroffers

Once you make an offer, the seller has the option to accept it as is, reject it or make a counteroffer. If the sellers want to change some of the terms of the offer, they will make a counteroffer. It then becomes your decision whether the counteroffer is acceptable or not.For example, the seller may counter with a higher sale price. Or, they may change or delete some of your contingencies. Or, the seller may exclude a piece of personal property that you wanted included in the sale, such as appliances. If you receive a counteroffer, you have the option of accepting or rejecting it — or making another counteroffer. This is the negotiation process that leads to a final offer that both parties agree upon.

Home Inspections

A home inspection should not be confused with a property appraisal. An appraisal is an estimate of value that is prepared by a professional appraiser. A home inspection is an examination of a property to determine the condition of the structural and mechanical systems. This inspection should be completed by a professional home inspector. Although home inspections are optional, it’s recommended that you include a home inspection contingency in your Offer to Purchase. By making your offer contingent on an acceptable home inspection, you have the option to withdraw the Offer to Purchase if the inspection reveals major problems that neither you nor the seller is willing to correct.In fact, you may want to have the inspection completed before you apply for your loan. That way, you will uncover any problems with the home before you spend money or time on securing financing.Usually, it is your responsibility as the buyer to pay for an independent home inspection and it is always money well spent. A professional home inspection usually only takes two to three hours, but, it gives you valuable information on the home’s structural condition and mechanical systems.

Finding a Qualified Home Inspector

It’s important that your home inspection be done by a qualified professional who has training and experience in a field such as engineering, architecture or construction. To find a qualified home inspector, ask your lender or real estate agent for names of companies that have a good reputation.

If you are unable to find a home inspector through a reliable recommendation, you may wish to look for someone who is a member of the American Society of Home Inspectors. This nonprofit organization was formed in 1976 as a voluntary professional society.

To qualify for ASHI membership, inspectors must pass a series of tests that measure their technical and professional knowledge. Before they can formally join ASHI, they must also perform at least 250 paid professional home inspections according to the ASHI standards of practice, and they must undergo a one-year review and trial period. All ASHI members must subscribe to the society’s Code of Ethics and they must meet a yearly quota of continuing education credits.

Finding a Qualified Home Inspector

The ASHI standards of practice require that inspectors judge the condition of a number of structural and mechanical components of a home and give a written report to the buyer. Examples include:

Central heating and air conditioning systems Interior electrical and plumbing systems Interior walls, ceilings, floors and stairs Visible insulation Ventilation systems Foundation, basement, attic and roof Exterior wall coverings, flashing and trim, gutters and downspouts Windows and doors Surface grading and drainage

Finding a Qualified Home Inspector

You should insist that each of these items be covered in a detailed report that you get to keep. It is highly recommended that you go with the home inspector when he or she conducts the inspection. This will give you the chance to ask questions about any of the conditions that may exist in the home and get an estimate of the cost for repairing these items. It will also give you the chance to ask questions about home maintenance.

Getting An Attorney

Depending on your situation, other contingencies may be appropriate. This is another reason why it’s a good idea to have an attorney look over your offer before you present it to the seller. If any contingencies specified in the Offer to Purchase are not met, you have the option of not going through with the purchase.

Make sure when you are deciding upon the contingencies that you are adequately protected, but at the same time, be realistic. Consider the situation in your market and make sure your offer terms and price are fair.

Earnest Money

When you submit an offer, you should be prepared to make a deposit. This deposit is often referred to as “earnest money.” It’s given to the real estate agent to be held in an escrow account as a show of good faith on your part that you are sincere about your offer.

If the sale goes through, the amount of earnest money you put down will be deducted from the amount you owe the seller at closing. If the seller rejects your offer, or the sale falls through because one of your contingencies is not satisfied, your earnest money should be returned.

Buying Your Home Tips

What to look for in a home • Some important considerations when selecting a home include sales price; distance to

work, school or shopping; and condition of plumbing. • To help you keep track of all of the homes you consider, use a Homebuyer Checklist, which

documents the specific practical features of each home, including environmental concerns, age of electrical wiring and roof condition.

How real estate agents can help • A real estate agent would typically, on behalf of the buyer, consult the multiple listing

directory to help narrow down the choice of homes to consider, help fill out the Offer to Purchase, and provide information on local schools, employment, and amenities.

• Unless a real estate agent is a "buyer's agent," he/she is obligated to work to secure the best price for the seller.

Before you make an offer on a property • Once you’ve narrowed down the choices of properties, considering property taxes, the

local school system and cost of utilities will help you make a sound, practical decision.

Tips on How to make an Offer to Purchase• Number of other buyers, motivation of the seller and the amount of necessary repairs to a property

would all influence the amount of an Offer to Purchase. • If the seller does not agree to the contingencies on the Offer to Purchase, the buyer is not legally required

to purchase the house. • Typical examples of contingencies that may appear on an Offer to Purchase include a requirement for an

asbestos inspection or evidence that the property meets safety code requirements, obtaining satisfactory well and septic tests and a time frame within which a buyer must secure financing.

• A home inspector’s visit would include covering the condition of windows and doors, the foundation and basement and the electrical system.

• It's highly recommended to obtain a detailed written report of the results of the home inspection, as well as a cost estimate for repair.

• It's wise to complete a home inspection because you may make your offer contingent on an acceptable inspection; you will be aware of potential costly repairs, thus affecting your offer, and it will give you an idea of what to expect for home maintenance.

• The buyer usually pays for the home inspection. • It's a good idea to get an attorney during the Offer to Purchase process to prevent mistakes that could

affect the legal passage of property title, to ensure the property meets safety code requirements and because additional contingencies that you had not considered may need to be added to the offer.

• The deposit with the Offer to Purchase, called earnest money, is given to the real estate agent to be held in an escrow account. If the sale goes through, the amount of earnest money will be deducted from the amount you owe the seller at closing. If the sale falls through, your earnest money is returned.

• The seller may change some of the contingencies in the buyer’s offer, may choose to not include items such as appliances, and may reject the counteroffer and sell to another buyer. The buyer doesn’t have to agree with the seller’s counteroffer.

This information is for example purposes only.

Rent Ownership

Payment $1,500 $1,279

Taxes, Insurance & Other $10 $457

Total Payment $1,510 $1,736

Tax Benefits $0 $350

Principal Paid $0 $433

Net Monthly Payment $1,510 $953

Rent vs Own Monthly Analysis

Figured assume a purchase price of $350,000 with 20% downpayment

If Rent: • By 5 years, your asset account is $0• By 10 years, your asset account is $0

If Buy: (not including any appreciation)

• By 5 years, your home’s equity is $25,980• your asset account is $0; Total Net Worth will reach $25,980

• By 10 years, your home’s equity is $51,960• your asset account is $0; Total Net Worth will reach $51,960

Rent vs Own Equity Over 5 & 10 Years

Your Dedicated Mortgage Professional . . .

© 2015 Mortgage Network, Inc. NMLS ID# 2668 All rights reserved. Trade/servicemarks are the property of Mortgage Network, Inc. 300 Rosewood Drive, Danvers, MA 01923. Also doing business as MNET Mortgage Corp. Connecticut 3785; Licensed by the Department of Corporations under the California Residential Mortgage Act Finance Lenders Law License 603B322; Delaware 010168; Florida Mortgage Lender Servicer MLD170; District of Columbia Mortgage Dual Authority License MLB2668; Georgia Residential Mortgage Licensee 15441; Illinois Residential Mortgage Licensee MB.0006470; Indiana-DFI First Lien Mortgage Lending License 16783; Indiana-DFI Subordinate Lien Mortgage Lending License 16784; Maryland Mortgage Lender License No. 19266; Massachusetts Mortgage Lender and Broker MC2668; Massachusetts Third Party Loan Servicer Registration LS2668; Maine SLM2499; Minnesota Residential Mortgage Originator License Other Trade Name #1 MN-MO-20261162; Licensed by the New Hampshire Banking Department 5573-MB; 300 Rosewood Drive, Danvers, MA 01923 – Location authorized to conduct New York regulated mortgage activities, MNET Mortgage in lieu of Mortgage Network, Inc. in New York - Registered Mortgage Broker – NY State Banking Department RMB 207997; Licensed by the NJ Department of Banking and Insurance-New Jersey Residential Mortgage Lender License 0755551; North Carolina L-113607; Ohio Mortgage Broker Act Mortgage Banker Exemption MBMB.850051.000; Licensed by the Pennsylvania Department of Banking 21978. Rhode Island Licensed Lender 95000456LL; South Carolina-BFI Mortgage Lender / Servicer License MLS – 2668; Texas Reg. 43205; Texas Regulated Loan License 10569-46959; Licensed by the Virginia State Corporation Commission MC-2593. Some products may not be available in all states. This is not a commitment to lend. Rates, terms, fees, and equity requirements are subject to change without notice. Restrictions apply. Equal Housing Lender.

Martha HarveySenior Loan OfficerNMLS #33096Office: 978-399-1303mharvey@mortgagenetwork.com

Start the loan process atwww.MarthaHarveyMortgage.com

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