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Don't spend a PENNY 'til you call JENNY!  

Steps Towards Home Ownership Purchasing a home involves a roller coaster of emotions, a pile of paperwork and nerves of steel. For many, it is one of the most significant investments of their lives. Research and an understanding of your financial situation, rather than emotion, should drive your decisions. Following are steps to follow to the final destination of home ownership.   Step 1: Determine Affordability The best way to determine what you can afford is to sit down with a financial consultant or mortgage broker who will weigh your current debt against your income and savings. It is important to consider the down payment, closing costs and your ability to meet monthly mortgage payments and other expenses, such as maintenance. Jenny can supply the names of reputable lenders who will be glad to help you.   Lenders are generally looking for a down payment of 3.5 to 20 percent of the purchase price and proof of your ability to repay the mortgage.   *   The lender considers 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 the FHA, monthly 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. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.   *   Keep in mind that you don’t have to wait until you find a house to apply for a loan. In fact, it’s a good idea to get pre-approved before you start looking. Pre-approval means you have met with a lender, your credit history has been reviewed, and the loan officer believes you can qualify for a given amount. Although a pre-approval is not a final loan commitment, it demonstrates your borrowing power.

Step 2: Jenny Markham Will Help Find Your Home

Finding your prospective home can be time-consuming. Enlist the help of Jenny Markham, a full time Realtor with current listings and up-to-date market information. Jenny’s services add no cost to your home purchase, and she is patient, kind, and knowledgeable in real estate. She can provide excellent references from past clients. *   Many people choose communities based on schools. *   Do you need access to shopping and public transportation or libraries and museums? Or the peace and quiet of a rural community or the YMCA or lake? Are parks and recreation important? *   When you find places that you like, talk to people that live there.  More than anything, you want a neighborhood where you feel comfortable. *   Before you begin looking at homes, make a list of your priorities, like location and size.  Establish minimum requirements that a house must have for you to consider it, and a "wish list" of things you like but aren't essential. *   Use the links on Jenny's Community Links page for helpful information.

In Tennessee, an offer requires a written contract. Jenny will advise, write and submit a contract with your offer price, down payment, proposed closing date and any contingencies, such as requiring a satisfactory home inspection or a home sale contingency. The seller may accept your offer, reject it or make a counter-offer. Jenny will represent and advise you in all negotiations, which may go back and forth several times until the binding contract is finalized.

Step 4: Secure a Mortgage

Choose your lender carefully. Look for financial stability, a reputation for customer satisfaction, and a company that gives helpful advice and makes you feel comfortable.    A local lender with the authority to approve and process your loan locally is preferable.  It will be easier for you to monitor the status of your application and ask questions. Jenny can provide recommendations of local lenders.   With a fixed-rate mortgage, the interest rate stays the same for the term of the mortgage, which is typically 30 years.

Step 5: The Closing

At the closing, the final paperwork is signed and the property title is transferred from the seller to the buyer. The Settlement Statement, or HUD-1 Form, itemizes the services provided and fees charged. It is completed by the closing agent and is given to you at or before closing.   On average, you can expect to pay two to five percent of the home’s selling price for closing costs. Keep in mind that lenders also often require you to obtain homeowners insurance.    Closing Costs Include:   *   Attorney or escrow fees (Yours and your lender's if applicable) *   Property taxes (to cover tax period to date) *   Interest (paid from date of closing to 30 days before first monthly payment) *   Loan Origination fee (covers lenders administrative cost) *   Recording fees *  Survey fee *   First premium of Mortgage Insurance (if applicable) *   Title Insurance (yours and lender's) *   Loan discount points *   First payment to escrow account for future real estate taxes and insurance *   Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable) *   Any documentation preparation fees     Once the closing is complete, you are free to move into your home as specified by the contract. You will soon realize the economic benefits including the opportunity to build equity and take advantage of valuable tax benefits.      And remember . . . Don't spend a PENNY 'til you call JENNY!