Information For the Home Buyer


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When checking out a house, leave your emotions at home

Homebuyers often follow their hearts, and they should. Sometimes just going with a gut feeling is the best indicator. But when it's house-touring time, it's important to set those emotions aside and replace them with clear-headed thinking and a critical eye. Otherwise, your potential dream house might just turn into a money pit.
Although you should always hire a professional inspection before you complete ttle sale, you can spot the more obvious trouble signs early in the process simply by knowing what to look for. You can quickly check five key
areas to determine if the home has serious problems.

Foundation. A cracked foundation is a serious matter. It can cost tens of thousands of dollars to fix, and, in severe cases, may not be fixable. Keep an eye out for these potential warning signs:

Piping. Copper piping rarely corrodes and is the plumbing of choice these days, but many older homes have galvanized steel plumbing. After 30 years or so it tends to rust out and leak. Replacing it can cost $5,000 or more, so it's something you'll want to watch out for. Call a plumber if you have specific questions.

Flooding. If a house is poorly situated on its lot, flooding can occur under the house, which can seriously damage the home. In the basement, check for water stains on the foundation indicating flooding during rainy periods. If you find these, call in a soils engineer to confirm the problem and suggest solutions.

Unapproved work. All improvements to the property should have been done with permits from the local building department. Work done without permit may be substandard and, if discovered later, may need to be ripped out.

Go down to your local building department and request copies of permits for all work that was done at the property address. Compare these with any additions or replacements done by the seller. If work was not done by permit, you may ask the seller to obtain permits for the work and bring it up to building-code standards before you purchase.


A home inspection is well worth the cost (Do I need a home inspection?)

When buying a home, how do you know what you're getting?

Most people probably only think of one or two questions to ask a home inspector: "How much is your fee?" and "When can you be there?" But these only scratch the surface.

Here's a list of suggested questions you might ask:

The inspector may not inspect swimming pools, wells, septic tanks, and other systems and items, and many inspectors will not conduct environmental tests or wood-destroying insect inspections. You will likely need to arrange for these inspections separately.

You can find a blank copy of the standard inspector report form at www.trec.state.tx.us to give you an idea of what mayor may not be covered in the inspection.


Questions buyers should ask a mortgage lender

How do you decide which lender is best for you?

There is a lot more to the mortgage process than getting a good rate. High costs in fees and poor service can come as very unhappy surprises.

Here's a list of suggested questions you might ask a lender:

Currently, Texas-licensed mortgage brokers must use the standard Conditional Qualification and Conditional Approval letters when representing that an applicant is prequalified or preapproved for a mortgage loan. Mortgage bankers may be required to do so in the future.


How to secure home financing the smart way

Three elements are crucial to the purchase of a home-the down payment, closing costs, and qualifying for a mortgage. Here is a quick rundown of what you should know:

Down payment
Typically, conventional lenders will require a 20% down payment, although you may be~able to find loans with down payments of as little as 5% (perhaps less in some cases). With down payments less than 20%, you likely will have to pay private mortgage insurance, which guarantees the lender will be repaid in case of default.

Mortgages insured by the Federal Housing Administration (FHA) and those available to U.S. veterans often require very low down payments. Ask your lender if you can qualify for one of these loans.

If you are having trouble coming up with the down payment, here are some tips to ease the burden:

Closing costs
No matter what home you buy, there will be closing costs. These can include: discount points, title insurance, escrow fees, attorney fees, termite report, recording fees, appraisal fees, document preparation fees, notary fees, and a loan underwriting fee. Usually these are due in cash, but sometimes they can be folded into the mortgage.

Loan qualification
The size of the mortgage you qualify for is based mainly on the interest rate offered and your income. The higher the interest rate, the higher the monthly payment. And, the higher the monthly payment, the more income you will need to qualify for the mortgage.

Contacting a lender before you're actually ready to make an offer on a house can be a good idea. This head start gives you a chance to work out any problems that may arise without the pressure of contract deadlines.


Homeowners insurance: 7 tips for Texans

Save on homeowners insurance
Here are seven ways to cut the cost of your home insurance from helpinsure.com, a Texas consumer-friendly Internet site:

  1. Shop around - and do it early!
    Check with several different home insurance companies to get rate quotes. (An independent insurance agent can provide rate quotes from a variety of companies.) And definitely do it well before your policy expires, just in case you run into any snags along the way.
  2. Raise your deductible
    The deductible is the amount of money you have to pay toward a loss before your insurance kicks in. Home insurance deductibles usually start around $250. However, if you increase your deductible to:
    1. $500, you'll save up to 12% on your premiums
    2. $1,000? Save up to 24%
    3. $2,500? Save up to 30%
    4. $5,000? Save up to 37%
  3. Buy your home and auto policies from the same company
    Many companies will give what's called a "multi-line" discount if you buy both home insurance and auto coverage from them.
  4. Don't skimp when buying a home
    If you're looking at buying a home, think about the cost of insuring the home. A newer home's electrical, heating, and plumbing systems and overall structure are likely to be in better condition than those of an older home - and can lead to a discount on your premiums.
  5. Insure your home, not the land
    While your home and its contents are at risk from fire, theft, windstorms, and other perils, the land your home sits on is not. Don't include the value of the land in deciding how much home insurance you need to buy.
  6. Improve security and safety
    Items such as dead-bolt locks, burglar alarms, and smoke detectors can usually bring discounts of 5% each. Your insurance company may also offer a significant discount of 15% or sometimes even 20% if you install a sophisticated home-security system.
  7. Check your policy annually
    Your policy should reflect the value of your home and belongings. If you review your policy every year, you can easily make the necessary adjustments. If, for example, you just sold a valuable painting, you won't need the same amount of personal property coverage. But if you've added a garage or other addition, you'll need to increase your dwelling coverage.

Welcome to Texas!

Information to help you settle into the Lone Star State

If you just moved to Texas, you'll soon learn plenty about the culture, customs, and history of the state. In the meantime, here are a few items to consider as you get acclimated.

Get legal on the road
As a new Texas resident, you have 30 days to register your vehicle and get your driver's license. Before you register your vehicle, though, it must pass the state inspection process. In order, here are the three steps to follow:

  1. Take ytlur vehicle to a state inspection station. You can find a list of what types of inspections are required in your county and an inspections-station locator at www.txdps.state.tx.us/vi. When you go, make sure you take your driver's license and proof of insurance. If your insurance policy wasn't issued in Texas, you may need to show proof that you carry the minimum coverage required by the state: $20,000 bodily injury or death to one person; $40,000 bodily injury or death to two or more persons; and $15,000 injury or destruction to other property.
  2. When your vehicle passes inspection, the inspection station will give you a verification form to bring to the county tax assessor-collector's office. This is where you obtain a Texas vehicle registration sticker and license plates. You'll need proof of ownership, such as registration or title from your previous home state, as well as proof of insurance. Again, you may need to show that you carry minimum coverage amounts.
  3. Apply for a Texas driver's license at the Texas Department of Public Safety (DPS) office in your area. To find the location nearest you, visit www.txdps.state.tx.us.Bring an 10, proof of Social Security number, proof of liability insurance, and proof of Texas vehicle registration. Expect to provide a thumbprint and surrender any valid out-of-state license you currently have.

Register to vote
While at the driver's license office, you can register to vote-or you can pick up a voter-registration application from the county voter registrar's office, a library, post office, or from the secretary of state's Web site at
www.sos.state.tx.us. The application must be received 30 days before an election to vote in that election.

Go online
You can find a wealth of information about the state at TexasOnline.com. You can also search here for links to Web sites for counties, cities, chambers of commerce, schools, and libraries. If you're looking for answers to questions about state laws, required business licenses, taxes, and more, you may also find that information here.

Don't fall for misleading solicitations to file your homestead exemption
There is no fee to file a property-tax homestead exemption. You might receive letters, though, on official-looking stationery offering to file your homestead exemption for you for a fee. Even some people who have lived in Texas their entire lives confuse these letters as a form from a state agency requiring a mandatory fee. Don't fall for it. The process is simple and costs nothing. You can download the application from their website at www.window.state.tx.us/taxinfo/taxforms/50-114.pdf, fill out the form, and send it in to your appraisal district.

If you have other questions, please feel free to get in touch with me.

Welcome to your new home!


Four ways to fix bad credit

Credit problems can seem like an insurmountable barrier to getting a home loan. It's not an easy task, but with patience and some insight you can turn things around. Here are four ways you can get on the road to credit
repair-and put yourself in a better position for homeownership.

  1. Develop a budget
    Stop all cregit transactions right now. It might sound harsh, but you should hide or destroy ~11 of your cards if necessaryl Now you can manage your inflow of cash and, more importantly. your outflow-money in and money out. Develop a flexible budget. Consider all necessary expenses such as housing, food, and healthcare. Then, eliminate expenses that can be trimmed such as entertainment and dining out. For more help, contact a nonprofit credit counseling agency, such as the TCA at 866/528-0588 or takechargeamerica.org.
  2. Contact your creditors
    If you aren't making timely payments, don't wait for your account to be turned over to collectors. Your creditors may be able to help you get on a lower-interest payment plan or agree to a settlement. A helpful tip: If your balance is unmanageable, offer a 30% settlement payment first. Some creditors will take payments of 30%-40% rather than have you default. Make sure to get the agreement in writing. Once you've paid in full, send the settlement letter to each of the credit bureaus (Equifax, Trans Union, and Experian/TRW) for reference so they will update your credit report.
  3. Consolidate your debt
    Another approach to consider is acquiring a debt consolidation loan. This type of loan will allow you to payoff your outstanding balances with one, lower-interest monthly payment. A home equity loan for debt consolidation could allow the interest you pay to become tax-deductible.
  4. Avoid bankruptcy if you can
    A last resort is bankruptcy because of its long-lasting effects. Bankruptcy can make it difficult to attain future credit, life insurance, and sometimes even a job. It does, however, offer a new start. The primary types of personal bankruptcy are Chapter 13 and Chapter 7. Chapter 13 allows you to keep property that you would otherwise lose, but payoff a default amount during a three-to five-year period. Chapter 7 (straight bankruptcy) liquidates all of your assets that are not exempt. Property is turned over to creditors or sold by a court-appointed official.

Help for homeownership is out there
There are lots of programs to help first-time and low-income homeowners, and even those with spotty credit histories who want to realize the American dream of homeownership. One is the Texas First Time Homebuyer Program. For more information, visit MyFirstTexasHome.org or ask your Texas REALTORĀ®.