New Canaan Norwalk CT Real Estate

Buyer Resources


Home Buyer's Information

When you decide to purchase your home, make sure you are armed with as much information as needed to make smart decisions. Buying your home is one of the most important purchases you will make, so make sure you have the right agent.

Benefits of Owning Your Own Home vs. Renting
All of the interest you pay is tax deductible. The money you pay towards your mortgage increases your ownership and equity in the property. When renting you are building someone else's wealth instead of your own.

How much can I afford?
Finding out what you can afford is one of the first steps, which can be done by pre-qualifying for a home loan. This step will help you narrow your search for both a neighborhood and particular houses. A pre-qualification is a simple calculation that considers several factors, but primarily your income. There are no guarantees with a prequalification, but it will be expected of you when you make an offer on a home.

Knowing what you can afford is the first rule of home buying, and that depends on how much income and how much debt you have. In general, lenders don't want borrowers to spend more than 28 percent of their gross income per month on a mortgage payment or more than 36 percent on debts.

It pays to check with several lenders before you start searching for a home. Most will be happy to roughly calculate what you can afford and prequalify you for a loan.

The price you can afford to pay for a home will depend on six factors:

  1. gross income
  2. the amount of cash you have available for the down payment, closing costs and cash reserves required by the lender
  3. your outstanding debts
  4. your credit history
  5. the type of mortgage you select
  6. current interest rates

Another number lenders use to evaluate how much you can afford is the housing expense-to-income ratio. It is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment on your new home loan, property taxes and hazard insurance (or PITI as it is known). If you have to pay monthly homeowners association dues and/or private mortgage insurance, this also will be added to your PITI.

This ratio should fall between 28 to 33 percent, although some lenders will go higher under certain circumstances. Your total debt-to-income ratio should be in the 34 to 38 percent range.

Making an offer
Most offers include two standard contingencies: a financing contingency, which makes the sale dependent on the buyers' ability to obtain a loan commitment from a lender, and an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction. A buyer could forfeit his or her deposit under certain circumstances, such as backing out of the deal for a reason not stipulated in the contract.

The purchase contract must include the seller's responsibilities, such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.

 

Steps to Home Ownership

Step 1: Buyer Counseling
We will meet to discuss in detail your needs and wants so we can plan the ideal search for your property.

Step 2: Buyer Representation Agreement
We will explain to you the Buyer Representation Agreement with the services and fiduciary responsibilities that accompany representation.

Step 3: Financing
We will offer to arrange a meeting with one of our lenders to identify your range of affordability and to increase your negotiating position through the pre-qualification and pre-approval process.

Step 4: Home Criteria
Our sales associate will provide you with all available properties that meet your property-search criteria. Our goal is to present you, when possible, with properties as they debut or before they appear on the open market.

Step 5: Property Viewing
We will arrange for private showings for the properties that meet the criteria you have selected. Our sales associate will always be present to help you evaluate each property.

Step 7: Property Evaluation
We will discuss the attributes of each property that may affect its present value and future resale value. We will discuss how each property does or does not fit your individual needs and wants.

Step 8: Review of Seller's Disclosure
We will review the seller's written disclosure statement with you to enable you to make the best decision possible on how to write your offer to purchase.

Step 9: Appraisal
We will explain what an appraisal is and when and why it is necessary. We will explain to you the option of an appraisal contingency.

Step 10: Funds Required
We (in conjunction with your lender) will provide you with a good-faith estimate of closing costs and down payment requirements anticipated in the transaction.

Step 11: Offer Preparation & Presentation
We will prepare a written offer on the property you have chosen, with specific terms approved by you and present it to the seller.

Step 12: Monitor the Sale
We will track the progress of your purchase agreement keeping you informed of the status of all contingencies and conditions during the entire transaction period.

Step 13: Final Walk-Through
We will accompany you on a final walk-through of the property prior to closing to make sure everything is just how you expect it to be.

Step 14: The Closing
We will be present with you at the closing table to ensure all goes well.

Step 15: Continuing Service
We will be in contact with you after the closing to ensure all your needs have been met and answer any questions that may have arisen.

 

Jason Milligan
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