Buying a home can be a daunting experience...

Advice for First Time Home Buyers Types of Mortgages Mortgage Calculator Newsletter Benefits if Using a Buyers Agent Buyer Specific Contact Form

...that's why Mindy Oberhardt and her Team of Experts have assembled a wealth of information and helpful tools to assist you. Once you're past the information gathering stage, Mindy and her Team can simplify the very complicated home buying process for you.

In addition to her professional awards and designations, Mindy has continually distinguished herself in community involvement and other causes which help her remain close to her customers and sales area. Here are some of the other ways she has assured personal excellence in serving the needs of her customers and community:

Advice for First-Time Buyers

• Pre-Qualification: Meet with a mortgage broker and find out how much you can afford to pay for a home.
  
  
• Pre-Approval: While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved (and you'll avoid being disappointed when going after homes that are out of your price range). In this scenario, the buyer actually applies for a mortgage and receives a commitment in writing from a lender. This way, assuming that the house you desire is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for that property. Costs for pre-approval are generally nominal and often lenders will permit you to pay them when you close your loan.
  
  
• List of Needs & Wants: Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wish list, things you would like to have (pool, den, etc.) but that aren't absolutely necessary. Realistically for first-time buyers, you probably won't get everything on your wish list, but it will keep you on track for what you're looking for.
  
  
• Representation by a Professional: Consider hiring your own real estate agent, one who is working for you, the buyer, not the seller.
  
  
• Focus & Organization: In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:
  1. One or more detailed maps with your areas of interest highlighted.
  2. A file of the properties that your agent has shown to you, along with ads you've cut out from the newspaper.
  3. Paper and pen, for taking notes as you search.
  4. Instant or video camera to help refresh your memory on individual properties, especially if you're attending a series of showings.
  5. Location: Look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive (shopping, parks, freeway access) and negative (abandoned properties, garbage dump, source of noise) features of the area?
     
     
• Visualize the house empty & with your decor: Are the rooms laid out to fit your needs? Is there enough light?
  
  
• Be Objective: Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don't make a hurried decision that you may regret later.
  
  
• Be Thorough: A few extra dollars well spent now may save you big expenses in the long run. Don't forget such essentials as:
  1. Include inspection & mortgage contingencies in your written offer.
  2. Have the property inspected by a professional inspector.
  3. Request a second walk-through to take place within 24 hours of closing.
  4. You want to check to see that no changes have been made that weren't agreed on (i.e., a nice chandelier that you assumed came with the sale having been replaced by a cheap ceiling light).

All of the above may seem rather overwhelming. That is why having a professional represent you and keep track of all the details for you is high recommended. Please email me or call me directly to discuss any of these matters in further detail.

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Types of Mortgages

Fortunately for buyers, there are a variety of mortgages to choose from. It is in your best interest to investigate each of them to determine which is the best for your situation. You probably won't qualify for all of them. In fact, you may only qualify for one. But if you do qualify for more than one, you may save yourself money (or worry) in the long run if you do your homework before signing on the dotted line.

Fixed Rate Mortgages

Consider a fixed rate mortgage if either of the following describes you:
A) You plan on living in your new home for many years, and/or
B) You are not a risk-taker and prefer the stability of knowing how much your payment will be each month.

Since most home loans are for a period of 30 years, if you want a payment you can count on for that long of a period of time, a fixed rate mortgage may be what works best for you. Once your loan amount and interest rate are calculated and locked in, a fixed rate mortgage will guarantee that you will have the same payment over the life of the loan. Making extra payments to principal will allow you to pay your loan off sooner.

This may not always be the best choice, however. If interest rates are very high at the time you take out your loan, with a fixed rate mortgage you'll be stuck with that high interest for the life of the loan (unless you choose to refinance). Conversely, if interest rates are very low, you'll come out the winner with interest rates that will stay low no matter how high interest rates go in the future.

The following are descriptions of the varying lengths and terms of fixed-rate mortgages:

• 15-Year Fixed-Rate: You to pay off the loan in half the time of a 30-year loan. Equity builds up more quickly than in a 30-year loan. Payments are higher (which may be a problem if you lose your job or become unable to work).
• 20-Year Fixed-Rate: You to pay off the loan in 2/3 the time of a 30-year loan. The overall interest paid is considerably less than for a 30-year loan.
• 30-Year Fixed-Rate: The most common choice, especially for first-time home buyers, as it is easiest of the fixed-rate loans to qualify for.

Monthly payments are lower than for 15-year and 20-year loans. (Especially helpful if you don't have a lot of "padding" between the amount you can afford to spend & the monthly payment for your desired property). More desirable if you plan on staying in the same home for years, since equity builds more slowly than for shorter term loans. For income tax purposes, this term provides the maximum interest deduction.

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Adjustable-Rate Mortgages (ARMs)

If you are more comfortable in taking a risk with your money, or if interest rates are very high at the time you take out your loan, an adjustable-rate mortgage (ARM) may be the type for you. You might also choose this type of loan if your planned ownership of the property is short-term or if you expect your income will increase to cover any potential rise in the interest rate.

Generally, the interest rate when you take out your loan will be lower than a fixed-rate mortgage. Please note that this is true initially, not necessarily long-term.

Since an ARM rate rises and falls depending on the prevailing interest rate, your mortgage payment will rise and fall accordingly. If your income isn't sufficient to cover the highest possible payments, then this option isn't for you. On the positive side, the lower initial payments will allow you to qualify for a larger loan than if you chose a fixed-rate type. The downside is that your payments will increase if/when the rates go up.

Typically, ARM interest rates are tied to a specific financial index (such as Certificate of Deposit index, Treasury or T-Bill rate, Cost of Funds-Indexed Arms or COFi, or LIBOR [London Interbank Offered Rate]) and your payment will be based on the index your lender uses plus a margin (generally two to three points). Get the formula used by your lender in writing and make sure you understand what it means.

Fortunately, the amount an ARM can rise is not unlimited. There are "caps" on how much your lender can increase your rate, both for a period of one year and for the life of the loan. Plan ahead, and have your lender calculate what the maximum payment would be if your rate went to the highest amount allowed by the cap for your particular mortgage. If you're not confident you'll be able to pay that amount on a monthly basis, perhaps you should reconsider this type of loan.

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Convertible ARMs

If neither the fixed-rate nor the adjustable-rate mortgage seems the best option, perhaps the convertible ARM will be right for you. This alternative combines the initial advantage of an ARM with a fixed rate after a predetermined number of years. Obviously, this type of mortgage has more advantages when the initial interest rate is low and the future rate is not guaranteed.

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Government VA & FHA Loans

Another mortgage option for some people is a government loan, providing that you meet the qualifications for these loans.

• VA Loans: Veterans may qualify for a loan from the Veterans
• Administration. There is a limit on the amount you can borrow, so this option works best for those buying a lower priced home.
• FHA Loans: The Federal Housing Association offers loans to lower-income Americans. Look for the phrase "FHA approved" when looking at ads for home.

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The Benefits of Using a Buyers Agent

A Buyer's Representative Will:

• Evaluate the specific needs and wants of the buyer and locate properties that fit those specifications.
• Assist the buyer in determining the amount that they can afford (pre-qualify), and show properties in that price range and locale.
• Assist in viewing properties -- accompany the buyer on the showings, or preview the properties on behalf of the buyer to insure that the identified specifications are met.
• Research the selected properties to identify any problems or issues to help the buyer make an informed decision prior to making an offer to purchase the property.
• Advise the buyer on structuring an appropriate offer to purchase the selected property.
• Present the offer to the seller's agent and the seller on the buyer's behalf.
• Negotiate on behalf of the buyer to help obtain the identified property -- keeping the buyer's best interests in mind.
• Review and explain documents to the buyer.
• Assist in securing appropriate financing for the selected property.
• Provide a list of potential qualified vendors (e.g. movers, attorneys, carpenters, etc.) if these services are needed.
• Most importantly, fully-represent the buyer throughout the real estate transaction.

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Buyer Specific Contact Form

Have questions about buying a new home? Contact us!

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Mindy Oberhardt | RE/MAX United
9131 Anson Way, Raleigh, NC 27615
Toll Free (800) 526-7383 | Office (919) 518-8163 | Fax (919) 846-0825

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