Information for Buyers
Buying a Home
Buying a home can be one of your most significant investments in life. Not only are you choosing your dwelling place, and the place in which you will bring up your family, you are most likely investing a large portion of your assets into this venture. The more prepared you are at the outset, the less overwhelming the buying process will be. The goal of this page is to provide you with detailed information to assist you in making an intelligent and informed decision. Remember, if you have any questions about the process, we're only a phone call or email away!
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One of the first steps in the home buying process is searching the market in order to get a feel for current market prices, what type of property you are looking for and getting an idea for what type of home you can afford. Take advantage of our free Home Search Page tool to seach, view and compair properties, and even save your favorites so you can come back to them.
Shopping around for the right lender will help ensure that you are receiving the best financing source for you -- FHA, VA, RD, FNMA or FHLMC. Experienced and reliable lenders should be able to tell you at the time of your application whether your loan will be approved. Do not find yourself in the position of finding out weeks after the application was taken -- and you've paid fees -- that your loan was denied. Your estimate should closely mirror final loan documents. If the difference is significantly higher, ask an attorney to review the papers. You shouldn't have to pay more fees than you were quoted. At the time of application, get in writing the lender's policy regarding the locking in of rates and fees.
Inspections are designed to help you understand the overall condition of a property, potentially saving you considerable time with the purchase process and hundreds or thousands of dollars in repairs. Some of the inspections which may be required or recommended by your real estate professional are:
As you start shopping for a home loan, your first question of each lender will probably be "What's your interest rate? How much are you charging?"
Interest rates are usually expressed as an annual percentage of the amount borrowed. If you borrowed $120,000 at 10% interest, you'd owe interest of $12,000 for the first year. With most mortgage plans you'd pay it at the rate of $1,000 a month. You would also send in something each month to reduce the principal debt you owe - and the next month you'd owe a bit less interest.
When your grandparents bought their home (putting at least half the purchase price down, by the way), their interest rate was probably around 4 or 5%. Rates stayed the same for years at a time. Then in the years following World War II, things became more turbulent. As economic changes speeded up, rates began to change several times a year. By the l980s, lenders were setting new rates on mortgage loans as often as once a week - and they still do today. When inflation hit a high in the '80s, some mortgage loans carried interest rates as high as 17% - and those who absolutely needed to buy, paid that much.
Rates dropped gradually through the 1990s, and by 2000 had reached their lowest rates in decades. Continuing into the millennium, home buyers appear to have the most favorable conditions for mortgage borrowing since their grandparents' days - and without 50% down payments either.
Realty Executives of Gallatin Valley
1924 W. Stevens, Suite 201
Bozeman, MT 59718