AGLS Exam 3- FLASHCARDS - Home buying part 2
With what type of mortgage does the rate not change?
Fixed rate mortgage
With what type of mortgage do payment amounts not change?
Fixed rate mortgage
Wat type of mortgage allows for budgeting?
Fixed rate mortgage
What type of mortgage is the safest choice for most people?
Fixed rate mortgage
What type of mortgage has a low initial teaser rate?
Adjustable rate mortgage
What type of mortgage adjusts frequently afterwards?
Adjustable rate mortgage
What type of mortgage has complex rules and fees?
Adjustable rate mortgage
What is a periodic cap?
Max the interest rate can increase each adjustment period
What is negative ammortization?
Payments are less than interest due; unpaid interest is added to principal
What is a lifetime cap?
Max the interest rate can increase over the life of the loan
What is a payment cap?
Max payment amount allowed at any time
What is a lock-in agreement?
Agreement guaranteeing interest rate provided home closes within the period
What length mortgage is associated with lower payments?
15 year
What length mortgage is associated with higher chance of forclosure?
15 year
What length mortgage has a higher interest rate?
30 year
What length mortgage has lower interest paid?
30 year
What are things you should consider when buying a new home?
Location, type, and lifestyle
What are factors of location you should consider when buying a new home?
Safe and friendly community, quality schools, proximity to frequented places, and traffic (noise)
What are factors of home type you should consider when buying a new home?
New or old, occupancy (single family, condo, townhome), one story or multiple, and number of bedrooms or bathrooms
What are factors of lifestyle you should consider when buying a new home?
Who will live in the house, what you will do in it, if we will have pets, and lawn maintenance
What is the first step to buying a new house?
Make an offer
What percent should you consider the offer less than the asking price of the house?
5% less
What might too much back and forth between offers do?
Kill the deal
What is the second step to buying a new house?
Write a contract
What should a contract include?
Price, method of payment, buyer and seller’s names, date of transfer, description of the property, a suitable funding clause, the portion of utilities taxes and insurance to be paid to the buyer and seller, expected condition of the home, and any other agreed upon contingencies
What is the third step to buying a new house?
Earnest money
What is earnest money?
A deposit on the home purchase to assure the seller that the buyer is serious about buying the house
What is the fourth step to buying a new house?
Inspection
When do you want your inspection done?
Soon after you make an offer
What can you do if the inspector finds issues?
You can renegotiate your price, require the seller to resolve the issues, or walk away entirely
What is the fifth step to buying a new house?
Appraisal
What is an appraisal?
Confirms the home is worth the price
What is the sixth step to buying a new house?
Final walk through
What should you do before you close on the house?
Email the seller a list of what must be fixed or changed
What is the last step to buying a new house?
Closing
What is closing?
The time at which the title is transferred and the seller is paid in full for the house
