Specializing in Residential Properties and Land in San Antonio and Surrounding Areas

Looking for a home in San Antonio? Call Jennifer Nack at (210)410-1276

Buyers & Sellers

Buying a Home

How Much Can I Afford?

Home Buying

A conventional loan typically requires a down payment. It is not uncommon for buyers to place a down payment of 10 to 20 percent of the purchase price. For example, on an $80,000 home, a down payment of $8,000 to $16,000 in cash may be warranted.

Government-backed loans require 5 percent or less as a down payment. Loans insured by the Federal Housing Administration (FHA) and the Veterans Administration (VA) are particularly useful to first-time buyers.

The thing to remember is that the higher your down payment, the lower the risk you pose for the lender and therefore the lender may be able to offer you better loan terms. The higher the down payment the lower your interest expense on the mortgage will be.

Qualifying For A Loan

A REALTOR® can help you determine what price range and monthly payment you can afford. The monthly payment typically consists of principal, interest, taxes and insurance – PITI, for short. The monthly payment is calculated based on the loan amount, the interest rate, the term of the loan, the costs of any insurance, and taxes.

Deciding What You Need & Want

Make a list of your needs and wants. Do you need an extra bathroom, a garage, a fenced backyard, lower utility bills? Do you want a fireplace, a short drive to work, a lakeside view, or maybe minimal yard work?

Once your list is made, go back over it and decide what is most important to your lifestyle. It may be privacy, creativity, or recreation. Decide which items are musts and which you are willing to give up. Assign each item a priority so that you will know what to look for as you begin house hunting.

Types of Loans

Private Versus Government Loans

Loan Types

Most mortgage loans are made by savings institutions, banks and mortgage companies. On government (FHA and VA) loans, the government does not actually loan the money but rather guarantees (or insures) to repay the lender if you default for some reason. Generally, a lender will require you to buy mortgage insurance, particularly if you make a low down payment. This insurance may be paid at closing or added to the loan amount. VA loans require no mortgage insurance, but only qualified veterans may apply for them. Mortgage insurance protects the lender, to a degree, in the event of default.

Government loans have important advantages – they generally require a lower down payment than conventional loans and often have a lower interest rate or points. One the down side, government loans limit the amount you can borrow, often take longer to process, and sometimes have higher closing costs.

Fixed Rate Versus Adjustable Rate

On a fixed rate mortgage, the interest rate stays the same over the life of the loan, usually 15 or 30 years. That means your payment will not change except for adjustments for taxes and insurance.

Adjustable rate mortgages go by a variety of names, but basically these loans have interest rates or monthly payments that can go up or down over time. These mortgages typically start out with a lower interest rate, lower monthly payments, and lower fees and points than fixed rate mortgages. They often appeal to first-time home buyers, younger couples who expect their incomes to grow in the coming years, and people who might not have much cash for down payment and closing costs.

If you consider an adjustable rate mortgage, ask the lender to explain the terms fully. Ask about the interest rate cap; the maximum rate you will be charged no matter how high rates go in the market. Don’t confuse rate cap with payment cap. When the payment is not enough to cover interest, the excess interest is added to your principal balance, so your debt increases instead of decreases. Also ask about the index that will be used to calculate future interest rates and how index charges will affect your mortgage.

Assumable Versus New Loan

Some loans, particularly FHA and VA loans as well as some adjustable rate mortgages, are assumable. That means a buyer can assume an existing loan usually on the same terms as the previous owner.

Assuming a loan may save some costs and time. As the buyer, you may pay the lender a fee at closing for processing the assumption.

Closing Costs

Purchasing a home involves a number of other parties and services. For example, the lender may require a survey and an appraisal to be completed. The title company will hire an attorney to prepare the conveyance document. You may want to have an inspection completed. You can expect fees for such services as appraisal, survey, inspections, hazard insurance, loan origination (lender’s administrative costs), credit report, document preparation, title search and insurance, recording fees, notary, attorney and escrow.

You will pay for some fees and the seller will pay for others. The costs will vary depending on each transaction. Most lenders will provide you with a good faith estimate of such costs. Your REALTOR® can also help you estimate what those costs might be.

Making an Offer

A REALTOR® can help you find your perfect home, but only you can decide how much you are willing to offer for it. The REALTOR® can supply you with information about the selling prices and marketing time of other houses in the area.

Once you have determined the amount you are willing to offer, the REALTOR® will help you prepare a written offer. In most transactions you will offer to deposit earnest money with the escrow agent. Earnest money manifests your sincerity in making a reasonable offer and abiding by the terms of the written contract.

Selling Your Home

Getting Your Home Ready to Sell

Home Selling

One of the most important things to do before putting your home on the market is to take care of the “easy” things. Make a list of things that need to be repaired – leaky faucets, chipped paint and loose hinges – and fix those items.

Curb appeal, or how your home shows from the street, is one of the key things that will sell – or not sell – your home. If buyers are turned off by the outside of the home, it will be very difficult for you to get them into the home and change their negative opinion. Curb appeal will be the key to making the right first impression.

Staging is the process of enhancing the impression a prospective buyer has about your home. Staging is all about removing things from your home that make it look smaller, drab or dated. It differs from decorating because decorating involves bringing things into the home to enhance the look of it. The key to staging is simplicity and getting prospective buyers to a place where they can picture themselves in the home.