STEP-BY-STEPHOME BUYING

Everything You Need to Know about Buying a Home

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GUIDE

MY MOVE STEP-BY-STEP HOME BUYING GUIDE 1

WHAT’S INSIDE

MY MOVE STEP-BY-STEP HOME BUYING GUIDE 3

WHY BUY A

HOME?

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THE AMERICAN DREAM OF OWNING A HOME HAS NEVER BEEN MORE ALIVE. OWNING A HOME OFFERS A CHANCE TO BUILD EQUITY, PLUS THE OPPORTUNITY TO LAY DOWN ROOTS. THERE’S A GOOD DEAL OF WORK—AND A LEARNING CURVE—THAT GOES INTO BUYING A HOME. THAT’S WHY WE CREATED THIS GUIDE. WHETHER YOU’RE A FIRST-TIME HOMEBUYER OR AN EXPERIENCED REAL ESTATE VETERAN, YOU DESERVE UP-TO-DATE, IMPARTIAL INFORMATION ABOUT THE HOME-BUYING PROCESS. FROM CALCULATING WHAT YOU CAN AFFORD FOR A MORTGAGE TO CLOSING THE DEAL AND EVERYTHING IN BETWEEN, YOU’LL FIND IT ALL HERE.

Top 5 Reasons to Buy a Home

1. SAVINGS. Owning your home tends to be more cost effective over time. Though renting can cost less in the short term, in the long run, paying off a mortgage usually amounts to less money when compared to renting a house of comparable size.

2. TAX BREAKS. Though situations vary, some part of the mortgage interest as well as the real estate tax you pay should be tax deductible. Be sure to consult with a tax expert or accountant to find out the specifics of your situation.

3. FINANCIAL ASSET. By making mortgage payments instead of giving your money away to rent, you’re steadily taking possession of a major investment over a fixed period of time. Think of it this way: After each mortgage payment, you own a little more of your home. Plus, any enhancements and improvements you make, such as adding central air or building an additional bedroom, add to the value of your house.

4. FIXED PAYMENTS. When you rent, there’s a nagging feeling a letter is going to arrive that tells you the lease is increasing. Other than moving, there’s not much you can do about it. But when you lock in a fixed rate with your mortgage lender, you establish a payment plan that is stable and dependable for the length of the loan.

5. INDEPENDENCE. As soon as you take possession of the keys to your home, you can change whatever you like, from that floral wallpaper in the living room to those green tiles in the upstairs bathroom. Unlike arguing with a landlord over new carpeting or a fresh coat of paint, now you’re free to do what you choose to enhance your living space.

Feeling grounded in your community, taking advantage of homeowner tax benefits and building equity are great reasons to buy a home. But don’t forget, this purchase comes with responsibilities. Remember to budget for hidden costs, such as maintenance, property taxes and market trends that can catch you by surprise if you’re not prepared.

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ALL ABOUT

BUYER’S AGENTS

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A BUYER’S AGENT WORKS WITH YOU TO FIND A HOME. SHE’S OBLIGATED TO YOU ALONE AND HAS NO RESPONSIBILITY TO THE SELLING HOMEOWNER. SHE’LL ASSIST YOU IN LOCATING PROPERTIES AND NEGOTIATING THE BEST DEAL POSSIBLE. IN ADDITION, SHE SHOULD RESEARCH THE HISTORY OF EACH PROPERTY TO UNCOVER INFORMATION THAT COULD LEAD TO FUTURE PROBLEMS.

BE CLEAR ON THE SPECIFICS. Schedule an initial meeting and be very clear about your expectations. She should explain her services and prices. Ask thorough questions before using her services.

ESTABLISH A COMMUNICATION SCHEDULE. Agree when and how to contact one another so as to avoid miscommunication.

KEEP YOUR APPOINTMENTS AND BE ON TIME. Whether you’re meeting to discuss contracts or view an open house, always be on time. Rescheduling at the last minute or being late makes her job more difficult.

KEEP WRITTEN DOCUMENTATION OF EVERYTHING PERTAINING TO YOUR PROPERTY DEAL. From emails and contracts to appraisals and lists of services, keep a file of all correspondences. A well-organized file will help answer questions.

EVALUATING YOUR BUYER’S AGENT• She listens to you. A good buyer’s

agent will listen to your concerns and address them in an appropriate manner.

• She patiently explains all procedures and legalities. Your agent should be prepared to explain what’s going on and why.

• She knows how to negotiate for the home you want. She should give you a breakdown of the asking price based on the comparative market analysis (CMA), and negotiate with the seller’s agent to get you the best price.

• She’ll advise you honestly and objectively. Your agent should give you the pros and cons of a situation so you can make informed decisions.

• She keeps you updated and returns your calls/emails promptly. Your agent should be in touch with you regularly.

• She doesn’t wear too many hats. It’s important that your agent tells you up front what is and isn’t part of her job. A buyer’s agent is only one member of a team. Don’t expect yours to be a real estate attorney and home inspector too.

A buyer’s agent also locates silent listings. These are homes that are not marketed by methods other than word of mouth. A savvy buyer’s agent will have a network of other agents who inform her about these hard-to-locate listings. She’ll assist you in making an offer and will follow up so your rights are protected throughout the entire transaction. A good buyer’s agent can save you time, money and a heap of aggravation.

Working with a Buyer’s Agent

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HELPFUL REAL ESTATE

WEBSITES AND APPS

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THERE ARE THOUSANDS OF WEBSITES THAT PROVIDE HOME LISTINGS, MORTGAGE ADVICE, MARKET TRENDS, NEIGHBORHOOD STATS AND NEARLY ALL OF THE INFORMATION A HOMEBUYER NEEDS TO FIND A HOME. YOU’LL WANT TO INVOLVE YOUR AGENT WHEN YOU’RE INTERESTED IN A PARTICULAR PROPERTY, BUT THE FOLLOWING WEBSITES HELP YOU SCOPE OUT THE MARKET AND DO SOME EARLY INVESTIGATING.

Realtor.com: Realtor offers listings, agents, expert advice and much more. Though some might find the articles data-heavy, they’re extremely useful if you need reliable information. In addition, the site offers instant moving quotes and links to rental trucks—it’s a one-stop home-buying and moving site. Realtor offers apps for iPad, iPhone, Android and Windows phones.

Zillow.com: Easy to navigate, visually pleasing and quick to load, Zillow is a reliable source of real estate information. Besides the customary search function, listings, agents, neighborhood information, blogs and advice, it offers a very fun feature called Digs, where users can interact while viewing photos of beautiful interiors and exteriors. When you need a quick break from mortgage points and neighborhood research, a stop at Digs should revive your enthusiasm for buying a home. The Zillow app is compatible with just about any device.

Redfin.com: Redfin takes real estate websites to a new level. In addition to the usual search functions, listings, interactive maps and neighborhood information, the site offers a free buyers’ guide and you can also sign up to attend free buyers’ real estate classes in your area. Redfin’s apps for iPhone, iPod Touch, iPad and Android will come in handy when you’re out and about on a Sunday looking for open houses nearby.

Trulia.com: In addition to listings, Trulia features local Q&A, blogs, advice and a variety of helpful guides. You can also get instant mortgage quotes for any property. A particularly interesting and useful feature is the Market Trends section, which offers up-to-date information about average sale prices and houses sold. Trulia apps are available for iPad, iPhone and Android.

The following real estate websites are notable for their comprehensive content and user-friendly applications.

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IS THIS HOUSE

THE ONE?

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FINDING A HOME IS LIKE FINDING A LIFE PARTNER—SOMETIMES IT’S LOVE AT FIRST SIGHT, AND OTHER TIMES, IT TAKES A WHILE BEFORE YOU REALIZE SOMEBODY IS MR. OR MS. RIGHT. AND JUST LIKE WITH ROMANCE, YOU MAY BE ATTRACTED TO MORE THAN ONE HOME AND NOT KNOW WHICH TO CHOOSE. IN ADDITION, IF YOU’RE LOOKING FOR A PLACE TO SHARE WITH YOUR PARTNER AND CHILDREN, YOU’LL NEED TO TAKE THEIR NEEDS INTO ACCOUNT. THOUGH IT’S TEMPTING TO MAKE AN IMPULSIVE DECISION, WHEN YOU’RE CONSIDERING AN INVESTMENT OF THIS MAGNITUDE, USE A RATIONAL APPROACH.

PROS AND CONSMake a pros-and-cons list for each home you like. Evaluate how the following factors match your lifestyle and budget:

• Maintenance requirements• Space• Number of rooms• Light• Heating• Local amenities• Interior design style• Floor plan• Remodeling costs• Accessibility• Storage• Parking• Yard• Location

In addition, consider the following five points to help decide if a home is the right fit:

1. NEIGHBORHOODS. Explore the neighborhood and evaluate whether everything you need is there, such as schools, parks, restaurants, houses of worship and retail shopping. Does it have a good school system? Note the upkeep of nearby properties. Consider how comfortable you feel there.

2. LOCAL CRIME RATE. Whether you’re looking at a downtown loft or considering a villa in a wealthy suburb, look into the crime rate. Contact the local police department and ask for an overview of current crime to evaluate the safety of each neighborhood.

3. PROXIMITY TO WORK AND SCHOOLS. Research how long it would take you to get to work, and—if you have school-aged children—how close you’ll be to schools. Remember that driving distance doesn’t always equal the time you’ll spend on the road, especially if you’ll be using congested routes.

4. LOCAL REAL ESTATE APPRECIATION. “Appreciation” and “depreciation” are real estate terms for property value increase and decrease. Check the re-sale values of other nearby properties. See whether their values are increasing or decreasing to better understand whether you’ll see a positive ROI on the potential homes if you decide to sell in the future.

5. SIMILARITY TO OTHER HOMES. Real estate studies show that homes that fit into a neighborhood and are similar in size, layout and amenities are more likely to sell than homes that seem out of place. Compare each home with adjacent properties to see how similar it is. This will give you a good prognosis of how easy it will be to re-sell.

COMPROMISE If, at the end of this evaluation process, you and your partner still have different favorites, it’s wise to compromise. Take a few minutes to independently list your must-haves. For example, if he wants a state-of-the-art kitchen and a home gym, and you want a multi-car garage and a pool, discuss whether a home that fits all your other needs but doesn’t have a gym or pool would work if you joined the local fitness and aquatics center.

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CALCULATING

WHAT YOU CAN

AFFORD

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THE FIRST FINANCIAL STEP ON THE PATH TO HOMEOWNERSHIP IS TO CALCULATE YOUR BUDGET.DETERMINE WHAT YOU CAN AFFORD BY CAREFULLY LOOKING AT YOUR INCOME, EXPENSES, AND CREDIT SCORE.

DECIDE ON OWNERSHIP. If you’re single, you’ll be the sole owner of the home, but if you’re married or in another form of civil partnership, consider whether co-ownership is prudent. Some people co-sign, while others choose one partner to be the only owner. Do what works best for your financial and legal situation.

REVIEW YOUR CREDIT REPORT. A good credit score is essential. Get a copy of your credit report. You can request up to three free credit reports per year through Annual Credit Report. You’ll receive your credit score, with an overview of loans and credit history. Correct errors and note derogatory data. Remember, your credit report provides key information for FICO, a credit risk calculating bureau whose reports form the foundation of any lender’s decision regarding the amount you can borrow.

STRENGTHEN YOUR CREDIT. With strong credit, it’s much easier to be approved for a mortgage. If you have credit card debt, pay it off. Stay below your credit limit: preferably below 30% of your credit limit for at least 12 months.

SAVE. You’ll need cash for a down payment, as well as approximately 6% of the price of your home in broker’s fees; appraisal and inspection costs; remodeling costs and moving expenses. Avoid opening or closing bank accounts or credit cards so your financial activity remains stable when applying for a mortgage.

MAKE SURE YOU CAN AFFORD TO BUY. Financial experts recommend reserving 33% of your monthly income for housing. CNN Money’s home affordability calculator is a useful tool to estimate what you can afford.

Note that interest on mortgage payments is deductible from your federal taxes.

BUDGET FOR HOMEOWNERS INSURANCE. Once approved for a mortgage, your lender will require proof of insurance. Rates vary per structure and location, so contact your insurance company for more information.

BUDGET FOR TAXES. A home is an asset and subject to federal, state and local taxation. Contact the appropriate organizations, such as the IRS, your state tax agency and city hall for further information on taxation.

OTHER COSTS. Moving costs, remodeling costs and appliances are factors to consider. Evaluate the energy and maintenance costs of a new home. Create a fund for emergencies and repairs. You’ll be glad you did.

LOCAL COST OF LIVING. Groceries, gas, consumer goods, cable, phone … the price of almost any product or service you purchase varies depending on location. Research how moving will affect your expenses and budget accordingly.

LOOK TO THE FUTURE. Future plans can impact your budget significantly. For example, if you’re expecting twins, you’re looking at the costs associated with having a family—twice! Take these increased costs into account when budgeting.

Calculating Your Budget

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GETTING PREAPPROVED

FOR A LOAN

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A LETTER OF PREAPPROVAL FROM YOUR MORTGAGE LENDER IS ESSENTIAL IN TODAY’S MARKET. A PREAPPROVAL LETTER STATES THAT THE LENDER HAS APPROVED YOU FOR A SPECIFIC MORTGAGE OVER A SET NUMBER OF YEARS. THIS BENEFITS YOU, AS YOU KNOW WHAT YOU CAN AFFORD, AND A SELLER KNOWS YOU CAN FOLLOW THROUGH ON AN OFFER.

HOW TO PREPARE FOR PREAPPROVALYour lender will need to review your financial history to make an informed decision. Before applying for preapproval, make a file that includes:

• Federal, state and local tax returns for the past two years

• 1099 income statements or W2s for the past two years

• Bank statements, including both checking and savings, for the past three months

• Pay stubs for the past three months• Proof of other income, including

investment income

Remember: Hard inquiries from lenders impact your credit score, so get your finances in order before applying for preapproval.

RESEARCH THE DIFFERENT TYPES OF MORTGAGES. There are many mortgage options; your homeownership success depends on choosing the right one. According to experts, approximately 70% of first-time buyers choose a conventional mortgage with a 5% down payment and a 30-year loan term. However, it’s important to understand that mortgages come in various configurations, whether it’s a short-term 5-year loan with a balloon payment, a 15-year term or the traditional 30-year mortgage. Compare mortgages to find the term that best suits you.

LEARN THE LANGUAGE AND THE MORTGAGE PROCESS. Mortgage terminology is often a mystery to new homebuyers. Learn the language and how the application process works.

UNDERSTAND THE DEFINITIONS (see glossary) of points, closing costs, FRM and ARM, GFE, TIL, per diem interest, underwriting, rate locks and warranty deed (see glossary for definitions). Other aspects to consider are points charged (one point equals 1% of your mortgage amount), estimated closing costs and lender’s reputation.

REVIEW THE QUALIFICATION RULES. For example, the standard rule is that your monthly mortgage payment (including insurance and property taxes) should not exceed 28% of your gross monthly income (not take-home pay). Your total debt, including estimated mortgage payment and all other loans (credit card, auto, student loans, etc.) should not exceed 36% of your gross monthly income. If your favored lender has different qualifications, find out before you apply for preapproval.

SHOP AROUND. Even if you’re interested in the first mortgage you research, it’s advisable to shop around. And if you’re feeling overwhelmed, check out this interactive mortgage comparison tool. It’s a great way to determine which mortgage fits your situation. Additionally, schedule appointments with financial consultants at banks and credit unions to find out which lender offers the best deal.

LIMITATIONS. Once you receive a letter of preapproval, make sure to check its expiration date. Most are valid for 90 days. Keep in mind that the letter’s quoted rate may vary from the actual rate when you sign, as lenders use current interest rates.

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MAKING AN OFFER

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IT’S COMMON FOR BUYERS AND SELLERS TO NEGOTIATE BACK AND FORTH UNTIL A FINAL AGREEMENT IS REACHED. SO WHAT’S AN APPROPRIATE OPENING BID?

No matter what the current market trends are, there are telltale signals about how to approach bidding. The following questions will help you ascertain whether to start low and slow, or bid fast and high:

• How long has the home been on the market?

• Has the price been dropped? If so, how many times and by how much?

• How desirable is the area? • Is there a large inventory

of homes for sale?• Is it buying season or off-season?

As a rule of thumb, the more homes on the market and the longer a home has been on the market, the more room there is for negotiating. However, if you’ve found your dream home in a desirable neighborhood with low inventory and a competitive buyers’ market, you should probably match or offer above asking price, pronto!

NEGOTIATIONSOftentimes, a monetary offer can be offset by other aspects, such as appliances the buyer would like included or an adjustment to the cash amount being paid. A buyer may also request repairs be made to meet a higher asking price. Other bargaining points can be termite inspection, closing costs, survey costs and closing date. Exactly what you negotiate will depend on the individual property. Work with your agent to ensure you get full monetary value for whatever give-and-take occurs.

WHAT’S IN AN OFFER?Your offer serves as a blueprint for the final sales contract. Besides the address of the

property and the sale price, an offer contains all other important factors of the transaction:

• Method of payment and the amount of earnest money you’ll pay upon acceptance

• Closing date• Promise of clear title by the seller• Provisions regarding which party will

pay for inspections, title insurance, etc.• How taxes and utilities are to be

adjusted between the seller and buyer• State-specific requirements, such as

environmental hazards disclosure or the presence of legal review of all documents

• Type of deed the seller will provide• Last-minute inspection of the

property by the buyer• Date upon which the offer expires• Contingencies that specify that the

offer hinges on the buyer securing a mortgage, and that a satisfactory inspection report of the house must be obtained by a certain date

HOW TO HANDLE A BIDDING WARWhat’s a seller’s dream and buyer’s nightmare? A bidding war. When more than one buyer makes an offer, the seller can reject all offers until he hears the price he wants. Though it’s never easy to remain calm in this situation, the trick is to not lose your cool. Know your limit, and don’t go beyond that amount. Keep your emotions out of this business transaction.

MY OFFER’S BEEN ACCEPTED! Once the seller accepts your offer, your agent will get it in writing and you’ll be bound in a legal agreement. This means that the transaction will take place, contingent on all conditions being met.

Signals of a Smart Offer

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HOME INSPECTION

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A CRITICAL COMPONENT OF HOME BUYING IS A SATISFACTORY HOME INSPECTION CONDUCTED BY A PROFESSIONAL HOME INSPECTOR. A COMPETENT INSPECTOR WILL CHECK YOUR NEW HOME FROM TOP TO BOTTOM, DOCUMENTING EVERYTHING IN AN OFFICIAL REPORT. IT’S HIS JOB TO LOCATE PROBLEMS PRIOR TO THE SALE SO YOU DON’T WIND UP IN A MONEY PIT.

HOME INSPECTION REPORTA professional home inspection report includes photos and a step-by-step analysis of the condition of the property. It can also suggest solutions to find issues that you and the seller have not considered. Carefully read the report. Pay special attention to the following points:

MOLD & MILDEW. Mold and mildew can pose serious threats to your home and your health. The home inspector will look for signs of this creeping problem and may suggest solutions. The main cause of moisture inside a home is poor drainage from the roof and foundation. If water is allowed to accumulate near basement walls or spill over gutters, it’s a recipe for disaster.

ROOFS & CHIMNEYS. It’s often easy to tell if the roof is in need of repair. Broken and missing shingles, crooked gutters and depressed spots can signal more serious issues. The chimney can be a prime cause of house fires. In many states, home inspection reports list the condition of the chimney and advise whether it’s clogged or ready for use.

PLUMBING. Faulty plumbing can mean huge repair bills. Expect the home inspector to check water pressure and drainage from the plumbing system. This is all the more important if the house has a septic tank or leech field, as these areas can signal issues before they are apparent inside the home.

ELECTRICAL SYSTEMS. It’s critical that the electrical system can handle a modern homeowner’s needs. Many homes have inadequate and outdated electrical systems. The inspection report will advise if the electrical system can handle normal everyday use.

WHAT HOME INSPECTORS WON’T EXAMINEA partial list of items inspectors likely won’t examine includes pools, spas, fencing, accessory buildings, wells, pumps, sprinkler systems, washing machine connections, alarm systems, heat exchangers, humidifiers, dehumidifiers, window AC units and appliances. They also won’t examine anything that’s not readily accessible or enter areas they consider a safety hazard, such as spaces that contain hazardous chemicals or asbestos. Crawl spaces, attics and roofs are often excluded from inspections as a result of these safety concerns.

In addition, a home inspector cannot examine structural issues that require an expert (such as an engineer). However, a responsible professional will alert you to questionable issues and instruct you which expert to contact to get more in-depth and accurate information.

HOW TO FIND A REPUTABLE HOME INSPECTORThere are two trade associations for home inspectors: the National Association of Home Inspectors (NAHI) and the American Society of Home Inspectors (ASHI). The best way to find a reputable, experienced home inspector is by searching on either website for a professional in your area. Your agent will likely be able to recommend an inspector she has worked with in the past.

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CLOSING

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ONCE YOUR OFFER HAS BEEN ACCEPTED, THERE ARE STILL A NUMBER OF STEPS TO COMPLETE.

There are many documents to sign during closing. Here’s an overview:

• Affidavits: Depending on the specific transaction, you may be required to sign affidavits pertaining to your employment status or intended use of your home.

• Mortgage: This documents the amount and terms of your mortgage and your promise to repay it as outlined. It includes specifics such as how to repay your loan, monthly payment amount, and any penalties due if you’re remiss.

• Deed of Trust: This is a legal document that states the mortgage lender has a claim on your home in the event you default on your mortgage payments.

• Truth in Lending (TIL) statement: This legal document states the total amount of your mortgage loan and the details of your repayment schedule. It also includes the terms and conditions for early repayment.

• Deed: Finally, you’ll sign the deed. This is the legal document by means of which the ownership of the property is transferred from the seller to you, the buyer.

6 STEPS TO YOUR NEW DOOR1. PURCHASE TITLE INSURANCE AND HIRE A REAL ESTATE ATTORNEY TO REPRESENT YOU DURING THE CLOSING PROCEEDINGS. A small investment to protect yourself now can save you a lot of money and stress down the road. Your agent should be able to give you a referral for an attorney.

2. WRITTEN OFFER AND FIRST PORTION OF EARNEST MONEY. As soon as your offer has been verbally accepted, it will be followed by a written offer that serves as the blueprint for the legal sales agreement. Your offer will be accompanied by a portion of your earnest money, which will be kept in escrow by the seller’s real estate attorney.

3. INSPECTION RESPONSE. As the buyer, it’s your responsibility to have your new home inspected within 10 days of mutual acceptance. Note that if the inspection reveals any significant problems, you’re advised to return to the negotiating table with the seller.

4. PURCHASE AND SALE. Any issues pertaining to the inspection have been resolved and all terms of the transaction are agreed upon by the time that you sign the purchase and sale agreement. Typically, the second portion of your earnest money will be put into escrow at this time.

5. COMMITMENT LETTER. Two weeks after this, you will have to produce a commitment letter from your mortgage lender that you will have the funds to pay for the home.

6. THE CLOSING. Between 30 to 45 days later (or whatever timeframe you’ve negotiated), the official closing date will be scheduled. This is when you will sign all of the final transaction documents at the local registry of

deeds or the lawyer’s office. Oftentimes, you’ll do a last walkthrough of the home before the closing. Bring a government-issued photo ID, as well as a cashier’s check to cover the closing costs. Depending on the terms of the transaction, you may receive the keys to your new home at this time or at a later date.

Documents

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RESOURCES

FOR

HOMEOWNERS

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CONGRATULATIONS! FROM A HOMEBUYER’S CLASS TO NEGOTIATING THE DEAL, COMPLETING THE ROUTE TO YOUR NEW FRONT DOOR IS A MAJOR ACCOMPLISHMENT. WE HOPE THIS GUIDE HAS HELPED YOU NAVIGATE THAT ROUTE WITH MINIMUM STRESS.

RESOURCESNow it’s time to get more resources. From tips on how to move with pets and kids to stopping hidden energy losses, you’ll need articles, videos and a comprehensive checklist to not just help you move, but to enjoy your new home and community when you’re done unpacking.

It’s easy to forget even the simplest of things when moving. Use a new homeowner checklist to make it a smooth transition. The following points should give you a general idea of what to remember.

Change Your Address: File a change-of-ad-dress online. This is easy to do, costs $1 and makes sure important bills and personal mail are forwarded to your new address when you move. Inform banks, physicians, the department of motor vehicles and other important entities of your new address.

Packing Inventory: Make a list of the boxes and items you’ve packed, and where they need to go. Simply marking “bedroom” or “kitchen” on each box or item will be enough for your movers to know where to put your stuff. For added ease, download a writable inventory list.

Utilities: You’ll need water, gas and electricity as soon as possible. Find out which utilities providers cater to your area—oftentimes there are multiple competitors—and inquire about packages. Start your contract on the day before or the day of your move.

Home Services: Compare phone, TV and Internet packages online to get the best deal.

Garbage: Visit your town or city’s website to find out which day garbage is collected, what types of receptacles or containers are required and if there is a recycling program.

Water and Gas Meters: Locate where your water and gas meters are, as well as your breaker box. If you can’t find them, call your agent and ask her. Usually, agents have this on file with the home information.

Smoke Detectors, Carbon Monoxide and Fire Extinguishers: Even if your home is already equipped with smoke and carbon detectors and fire extinguishers, double-check to see if they’re in good working order. If there are none, make it a priority to install them within your first week and remember to check them regularly.

First-Aid Kit: Purchase a good first-aid kit and keep it easily accessible.

Take Advantage of Savings for New Movers: Visit a comprehensive resource for deals and save on everything from appliances to home décor.

New Homeowner Checklist

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GLOSSARY

APPRECIATION: Any increase in a home’s value. This can be due to any number of reasons such as a change in interest rates or the amount of homes for sale on the market. It is the opposite of depreciation.

ARM: An adjustable rate mortgage is a specific type of mortgage during which the interest paid is not permanently locked, but is instead reset based upon the remaining balance. This type of mortgage may also be known as a floating rate mortgage or variable rate mortgage.

CLOSING COSTS: Any costs in addition to the home’s price that must be paid to close the transaction. Surveys, loan fees and title insurance are examples of extra expenses that homebuyers or sellers agree to pay.

CMV: The current market value, as applied to a home, is its resale value on the competitive market taking into account all existing conditions for a fair sale to occur.

DEPRECIATION: Any decrease in a home’s value, usually brought on by the conditions of the housing market. Opposite of appreciation.

EARNEST MONEY: Usually held in an escrow account, it is a deposit a homebuyer makes to the seller. It is a good faith indication that the sale will occur and allows the buyer time to finalize financing.

ESCROW: Refers to any item of value, such as money or property, which is held by a third party, typically an escrow agent, while the conditions of a binding agreement are met. In real estate terms, ‘in escrow’ often refers to the time during the home buying process

when the home’s title and the purchaser’s money are held by a third party until the final transfer of ownership occurs.

FICO: The Fair Isaac Corporation made the FICO credit score that serves as the crucial part of any lender’s assessment of the credit risk of a mortgage applicant.

FRM: A fixed rate mortgage is a type of mortgage with a consistent rate of interest locked in throughout the entire loan term. For homeowners who do not want to contend with changes in interest rates, this type of mortgage is a popular choice.

GFE: A good faith estimate is an estimated calculation of total fees due at a mortgage closing. Lenders must supply a borrower with a GFE within three days of the loan application being made.

PER DIEM INTEREST: The charge of interest on an outstanding loan for a period of one day. It’s important to note this term does not indicate the loan’s interest is compounded daily.

POINT: A point is the equivalent of 1% of a loan’s amount. It may also be used to indicate the difference in percentage of the prime interest rate and a mortgage’s interest rate.

PREAPPROVAL: When a mortgage lender checks a potential homebuyer’s financial history, including credit rating and income, and approves the homebuyer for a maximum amount of a possible loan.

RATE LOCKS: When a homebuyer locks in a set interest rate with a lender for a set amount of time. It’s important to note that if a homebuyer does not lock in an interest rate based on the current market, a lender can charge a higher interest rate.

ROI: Return on investment is a performance measurement that evaluates whether an investment is prudent to make. The ROI can be determined by dividing the return by the cost of any investment.

SILENT LISTINGS: A property that, in order to maintain the privacy of the seller, is not advertised publicly but is marketed discreetly by a realtor.

TIL (TRUTH IN LENDING): The Truth in Lending Act of 1968 is intended to protect consumers in business dealings with creditors and lenders. It specifies that before any credit is extended, the lender must present conspicuously in writing to the consumer the following information: the term of the loan, the annual percentage rate and the total costs to the consumer.

UNDERWRITING: The process of evaluating the creditworthiness of a borrower, as well as the capacity of the property to redeem its own value.

WARRANTY DEED: A legal document that states the owner of a property, as well as that said property is free of any liens or claims against it. Warranty deeds are part of closing documentation and guarantee that the seller will be responsible for any claims challenging the buyer’s ownership.

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ABOUT MY MOVE&

ACKNOWLEDGMENTS

Acknowledgements

This guide would not have been possible without the insights and pointers from central Massachusetts residential broker Laura McCourt. Thank you, Laura.

K.C. Roads and Kena Ravel were critical to the execution of this guide. Thank you, K.C. and Kena, for your hard work and dedication.

About My Move

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