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Buy
A Quality Home From A Professional Licensed Builder
Everyone
interested in buying a new home wants to find a quality house
built by a professional. But professionalism is one of those
concepts where you know it when you see it, but
you may have trouble defining it.
There is no single
definition of professionalism, but there are certain
principles that a building professional will practice.
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Building
professionals believe that homes should be well designed,
well constructed and well located in attractive
communities with accessible educational, recreational,
religious and shopping facilities
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They feel a
strong responsibility to their customers and their
community.
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Honesty is
their guiding business policy, and they believe in dealing
fairly with their customers, employees, subcontractors and
suppliers.
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They try to
build high standards of health, safety and sanitation into
every home.
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They are
licensed by the State
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They are fully
insured.
An important
indicator of professionalism is whether the contractor belongs
to a builders association or other professional groups.
Becoming a dues-paying member of such groups usually means
that a builder is an established member of the community.
Builders associations encourage research to develop materials,
new building techniques, new building equipment, and improved
methods of home financing so that home buyers may receive the
greatest possible value for their money.
The quality of a
new home will in large measure be determined by the skill of
the building professional who constructs it. You should shop
for a builder as carefully as you shop for the features of a
home since you are not just buying a structure when you buy a
new home. Along with the structure comes a package of
services, and the quality of those services will have an
important effect on your enjoyment of the house.
Be cautious when
unfamiliar builders offer "special deals" or want to
use your home as a model. Ask for the complete details in
writing, and for an explanation of any differences from
regular prices.
Builders/Remodelers
should be willing to provide names of previous customers, and
be sure to check the previous customers, and be sure to check
the references by asking if they would hire the contractor
again.
Ask for written
estimates and check it for thoroughness.
Ask for a contract
and guarantees in writing. The contract should be complete and
clearly state all the work to be done and the cost. NEVER sign
a blank contract or one with blank spaces. The guarantee
should be a written statement which should include what is
guaranteed, who is responsible for the guarantee (the dealer,
the contractor, or the manufacturer), what is covered beyond
the written guarantee, and its duration.
Do not rush
through the process of choosing a building professional. Set a
reasonable timetable for your search, and do not make your
decision until you feel comfortable about what you are doing.
You will be in frequent communication with your builder during
the construction process and after you move into the house, so
try to choose a builder with whom you feel comfortable.
Home
Mortgage Loan Tips:
How To
Simplify the Process
Whether you are buying your first home or a
move-up house, the process of financing this important
purchase can be the most intimidating part of the process.
Understanding financial terminology and good preparation can
take some of the “sting” out of the process.
Most people look to their bank to borrow
the funds for their mortgage. While this is a logical choice,
it is important home buyers know there are other lenders
available. Mortgage companies, savings and loan association,
credit unions, mortgage brokers and commercial banks all make
home loans. Special assistance is available for people in low-
to moderate - income levels. Many people who never dreamed
they could own a home are pleasantly surprised to learn they
qualify for help with down payments and credit counseling.
To begin your home buying process, you need
to determine the price range you should explore. One of the
most effective ways to determine your price range is by
prequalifying. When you prequalify, your financial situation
is reviewed to determine how much money you can borrow. It
does not mean you are preapproved for a loan, but you will
have a good idea about the price range of homes you can buy.
Your Realtor or financial institution can help you prequalify.
After you choose your home, you will need
to secure the funds to make the purchase. The boy scout motto
“be prepared,” will help you through the loan application
process. You will be required to disclose detailed information
about your financial situation. Having the following documents
with you when you apply for your mortgage will speed up the
process.
Mortgage Application
Checklist
Contract
Legal description of the property
Price
Personal Information
Social Security number and driver’s
license for all borrowers
Home addresses for the last two years
Divorce decree and separation agreement, if applicable
Income
Most recent pay stubs
Documentation on any supplemental income:
bonuses, commissions
Names, addresses and phone numbers of all
employers for the last two years
W-2s for the last two years
If self-employed or commissioned sales,
copies of last two years’ tax returns with all schedules
and year-to-date profit and loss for current year, signed by
an accountant
Documentation of alimony or child
support, if such income is to be considered for the loan
Real Estate Owned
Names, addresses, phone numbers and
account numbers of all mortgage lenders and landlords for
the last two years
Copies of leases and two years’ tax
return for any rental property
Market value estimate
Liquid Assets
Complete names, addresses, phone numbers
and account numbers for all bank accounts
Copies of the last three month’s
statements for all bank accounts
Copies of any notes receivable
Value of other assets (autos, household
goods and collectibles)
Cash value of life insurance policies
Vested interest in retirement funds, IRAs
Liabilities
Names and account numbers for all
revolving charge cards; balance and current monthly payment
amount for each
Names, addresses, phone numbers and
account numbers for all installment debt; approximate
balance and monthly payment for each
Alimony or child support payments
Names, addresses, phone numbers and
account numbers of accounts recently paid off, if used to
establish credit
This information was adapted from
Building
Your Home: An Insiders Guide.
The Home Builder Press, National Association of Home
Builders in Washington, DC
What
Exactly Is The Closing
From the buyer’s perspective, the closing
can be generally broken in three pieces:
1. Review and signing of loan documents
In the first phase of the closing, you,
the buyer, must review and sign all the loan documents
provided by the lender. There may be seven to twenty documents
or more, including the actual mortgage, note, affidavits,
Truth-in-Lending statements, estimate of closing costs, and
the escrow statement letter that outlines how much will be
paid into the real estate tax and insurance escrows.
2. Exchange of documents between buyer and
seller and title company
The second phase of the closing deals with
the relationship between you and the seller and the title
company. There is an exchange of documents that must be signed
by you and the seller, and then other documents that require
the additional signature of the title company. The seller
will provide certain documents for your inspection.
After these documents have been gone over
and signed then the title company will have more papers for
you to sign. These documents generally relate to the title, or
are papers that the title company must send to the Internal
Revenue Service regarding the purchase and sale of the home.
Your documentation may include these:
The RESPA (Real Estate Settlement
Procedures Act) “HUD-1” statement outlines who provides
the money and from which sources, and details how the money
gets paid out. This document is signed by you, the seller. and
the title company.
Disclosure statements about construction
contracts or any agreements entered into within the past three
to six months for work to be done on the property. This is to
ensure there will be no outstanding mechanics’ liens placed
on the property.
Disclosure statement about any tenants who
have access to the property other than the buyer or seller.
Statements about any other matters that
could ultimately affect the title to the property, such as
lawsuits.
Internal Revenue Service form 1099, which relates to sales
price of the home. Once signed, it will be used to cross-check
your IRS form with documentation signed by the title company
regarding the purchase and sale of the home.
3. Disbursement of funds
Once all documents have been signed, dated, and
notarized, the title company can proceed with the disbursement
of funds. It will take the money from you, the buyer, and cut
the checks to the seller, the seller’s lender (if
applicable), the brokers, the title company, and the
attorneys. Since everyone usually gets paid out of the closing
proceeds, it’s easy to see why the title company doesn’t
accept personal checks, even for a few pennies. Title
companies accept only cashier’s or certified checks, or a
wire transfer, because that’s like accepting cash.
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