Mortgage points
Mortgage points are a common mis understood topic by home buyers. Mortgage points are in a nut shell up front interest charged to the buyer. Not all lenders charge points. In some cases it may be to the advantage of the buyer to consider a loan that charges points on a home loan. For more on Mortgage interest points see the video below by “Two Mortgage Guys” below.
Mortgage loan process
The Mortgage loan process is the most import part of buying a home. It is also one of the most neglected parts of buying a home on the part of the home buyer. Consideration for what it really takes to buy a home and who will assist the home buyer should be the first two questions a buyer should ask themselves. To eliminate and/or reduce pain in this process, finding a short list of lenders along with an agent should be tackled first. Consult your buyers agent for options to be considered. In most cases the agent will have a list of qualified lenders to interview. My list includes lenders that are local with processing and underwriting handled in house. This cuts down on any potential lost time buyers may face with a large bank that has undewriting on the west coast and processing on the east coast. I have included a link to a video from “Two Mortgage Guys” below. I don’t use them but they have some great videos for consumers to watch that can help make more sense out of the process.
Many home buyers do not know the difference between client and customer
Many home buyers do not know the difference between client and customer. Unfortunately first time home buyers leave money on the closing table because they stay a customer and have no idea what the advantages are for clients.To begin to understand the differences lets look at the simple definition.
A customer is simply a home buyer shopping without representation.
A client has a signed representation agreement with a real estate agent also shopping for a home.
I know, I know no one likes the initial idea of signing agreements. However, there are many more additional advantages to having an agreement as a customer rather than not having one as a customer.
Clients get: Obedience, Undivided loyalty, full disclosure, confidentiality, accounting and reasonable care/diligence
Customers only get: Honesty, accounting, reasonable skill and agency/material fact disclosure
The biggest term in both of these definitions is confidentiality. While you are shopping for a home any information you wouldn’t want the seller to know is at stake without representation. Confidentiality of even the smallest details of your life can cost you thousands, what kind of job do you have, do you have to move soon, where are you from, how long have you been in your job field, etc. These items sound small but a seasoned seller representative has a duty to report any of this information to the seller and help the seller determine if you can afford to pay just a little more or a lot more than you’re offering.
Now an experienced buyer representative will help insulate you from the seller. How? Well for starters a buyer rep will have access to the keys to any home you want to see and keep your sensitive information private.
The next biggest and final term I will discuss in this post is full disclosure. Many buyers are confused about this part, thinking that agents have to give up all information about a house. Agents are only required to give known material facts about the condition of a home. Disclosure on how long the house has been on the market, number of price reductions, comparative market analysis on similar homes for sale or sold in the area is not required.
These are only a few pieces of information buyers need to be aware of when considering buying a home. The best advice to buyers is to shop for a helpful agent first and sign a one day contract with your top candidates so you can discuss exactly what you want in a home. You need that contract just in case you cross paths with the agent on the other side of the transaction so they have to keep any information they learned about you confidential even to their current seller client.
If you have any questions or would like further information I’m always willing to help buyers understand.
Covenant Partners
http://www.sahomelocator.com
