Buyer's Guide

Why should I buy, instead of rent?

A home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you'll enjoy having something that's all yours - a home that shows your own personal style as well as an investment in your future.

Should I use a real estate broker? How do I find one?

Using a real estate broker is a good idea. All of the details involved in home buying, can be overwhelming. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you'll want to know about a neighbourhood you may be considering...the quality of schools, the number of children in the area, the safety of the neighbourhood, traffic volume, and more. He or she will help search the multiple listing services for homes available. With immediate access to homes as soon as they're put on the market, the real estate broker can save you hours of wasted driving-around time. Need a recommendation? A Century Loan Officer would be happy to make recommendations based upon realtors that he or she has worked with in the past.

How much money will I have to come up with to buy a home?

Well, that depends on a number of factors, including the cost of the house and the type of mortgage you would like. In general, you need to come up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house. Closing costs - which you will pay at settlement - average 3-4% of the price of your home. These costs cover various fees and processing expenses. When you apply for your loan, we will give you an estimate of the closing costs, so you won't be caught by surprise.

How do I know if I can get a loan?

Use our simple mortgage calculators to see how much mortgage you can afford - that's a good start. Our highly trained professional loan officers can help you find a loan that fits your needs and is custom for each individual. Pre-approval prior to finding the home of your dreams will help speed up the process.

What do I need to take with me when I apply for a mortgage?

If you have everything with you when you visit with us, you'll save a good deal of time.
 
You should be prepared to provide the following information:
  • Your legal name
  • Your social security number
  • The address of the property you would like to buy (if you have already selected a home)
  • An approximate value of the property you would like to purchase
  • The amount of the loan you would like
  •  Your approximate monthly income
 
Things will be sped along if you also have:
  • a list of all credit card accounts and the approximate monthly amounts owed on each;
  •  a list of account numbers and balances due on outstanding loans, such as car loans;
  • copies of your last 2 years' income tax statements;
  • the name and address of someone who can verify your employment.
  • copies of your checking and savings account statements for the past 6 months;
  • evidence of any other assets like bonds or stocks;
  • a recent paycheck stub detailing your earnings;

How do I know If I'm ready to buy a home?

You can find out by asking yourself some questions:

  • Do I have a steady source of income?
  • Have I been employed on a regular basis for the last 2-3 years?
  • Is my current income reliable?
  • Do I have a good record of paying my bills?
  • Do I have few outstanding long-term debts, like car payments?
  • Do I have money saved for a down payment?
  • Do I have the ability to pay a mortgage every month, plus additional costs?

If you can answer "yes" to these questions, you are probably ready to buy your own home.

How do we determine the maximum loan amount that you can afford?

We consider your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. According to general calculations your mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, should total no more than 41% of income. We also consider cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

How can I determine my housing needs before I start to search for a home?

Your home should fit the way you live, with spaces and features that appeal to the whole family. Before you begin looking at homes, make a list of your priorities - things like location and size. Should the house be close to certain schools? your job? to public transportation? How large should the house be? What type of lot do you prefer? What kinds of amenities are you looking for? Establish a set of minimum requirements and a wish list. Minimum requirements are things that a house must have for you to consider it, while a wish list covers things that you'd like to have but aren't essential.

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