Buying a Home
A guide to achieving the American dream
Buying a home, whether it’s your first or fifth, is a big and important task. The goal of your GMAC Real Estate Sales Associate is to guide you through each step, making it as stress-free and enjoyable as possible. With Premier Service® they can help you achieve just that. With a well organized, proven approach to the home-buying process, your GMAC Real Estate Sales Associate can help you find the home of your dreams.
From their specialized market knowledge to mortgage, financing and the closing of the transaction, you are provided the luxury of Premier Service®, every step of the way.
Your Sales Associate will:
u Help you in determining how much you want to spend.
u Help define your housing priorities by discussing your specific needs, wants and desires
u Recommend the right resources to help you reach your goals
u Research and obtain information about houses and neighborhoods to help you make decisions.
u Help you prepare for mortgage qualification.
u Help you negotiate the best possible price
Deciding to buy
The right time to buy
Today, home buyers have more choices than ever before. You can choose financing options that are flexible and affordable, home styles that fit a variety of lifestyles, and professional services that make the process fast, effective and enjoyable. Here are some facts about homeownership that may surprise you:
§ Homeownership can be a good investment opportunity. A house offers leverage and the possibility for appreciation in value. And, you can use this investment while it’s working for you!
§ You can’t afford to overlook the tax breaks of homeownership. Since mortgage interest and property taxes are deductible, homeownership can save you money each year. Young people aren’t priced out of the market. Figures from the National Association of Realtors put the average age of first-time buyers at 32 years old.
§ Renting doesn’t protect you against rising prices. Rental units are just as susceptible as houses to increases in taxes, insurance, utilities and other costs. Landlords will pass along these increases to the tenants.
§ The waiting game is a losing game. Don’t put off buying a home waiting for prices to come down.
How to get started
§ Choose a professional who specializes in residential real estate. She or he should have specific knowledge of the local real estate and mortgage markets.
§ Consider references carefully. An experienced, confident Sales Associate can provide you with names of recent buyers in your market with whom he or she has worked.
§ Select a professional who will listen to you. Your Sales Associate should be interested enough in you to find out about you and your housing needs and preferences.
§ Select a professional who puts service first. Strong customer service is the key in today’s real estate business. For Premier Service GMAC Real Estate Sales Associates, this service goes above and beyond giving buyers only what they expect and need.
Your GMAC Real Estate Sales Associate can show you any house that’s for sale in your market — not just the homes listed by our company. If you see a house for sale that you like, arrange a viewing through us.
Commit yourself to working with one Sales Associate who can learn your likes and dislikes in homes and make your home-buying process much easier. Turn to a GMAC Real Estate Sales Associate for your real estate needs.
How much house can you afford?
Most people have a general idea of how much they feel comfortable spending. It’s equally important how
much the lender calculates you can afford.
u Evaluate your financial situation as the lenders do. Typically, your total monthly housing costs of mortgage principal and interest payments, property taxes and hazard insurance (PITI) should not exceed 28 percent of your gross monthly income. Or, housing costs plus any outstanding monthly long-term debt should not exceed 36 percent of gross monthly income.
u Determine how much your financial institution is willing to lend you. Call on your Sales Associate for help during the prequalification process.
u Know how much you can afford in monthly payments. Lenders factor in sales price and down payment, but place more importance on how much you can handle monthly.
Mortgage Chart — Your guide to affordability
Your mortgage power may surprise you. This chart shows how much house you can afford at any given interest rate. To use it, simply find the monthly payment you can afford and read across to the nearest current interest rate. The point where the two intersect shows you how much mortgage that monthly payment will buy.
It is important that you obtain a mortgage pre-approval. This is an essential time-saver when you come upon the house you want to buy. Mortgage pre-approval is like securing a loan before you find a house, and its real peace of mind to know exactly what you can afford. Payments below are based on a 30-year amortization and include principal and interest only. Ask your GMAC Real Estate associate what to add for taxes and insurance.
|
Monthly Payment |
4.00% |
4.50% |
5.00% |
5.50% |
6.00% |
6.50% |
7.00% |
7.50% |
8.00% |
8.50% |
9.00% |
|
$300 |
62,837 |
59,208 |
55,885 |
52,836 |
50,036 |
47,463 |
45,092 |
42,905 |
40,885 |
39,016 |
37,285 |
|
$400 |
83,783 |
78,944 |
74,513 |
70,449 |
66,717 |
63,284 |
60,123 |
57,207 |
54,513 |
52,021 |
49,713 |
|
$500 |
104,729 |
98,680 |
93,141 |
88,061 |
83,396 |
79,105 |
75,154 |
71,509 |
68,142 |
65,027 |
62,141 |
|
$600 |
125,675 |
118,416 |
111,769 |
105,673 |
100,075 |
94,926 |
90,185 |
85,811 |
81,770 |
78,032 |
74,569 |
|
$700 |
146,621 |
138,152 |
130,398 |
123,285 |
116,754 |
110,748 |
105,215 |
100,112 |
95,398 |
91,038 |
86,997 |
|
$800 |
167,567 |
157,887 |
149,026 |
140,897 |
133,433 |
126,569 |
120,246 |
114,414 |
109,027 |
104,043 |
99,425 |
|
$900 |
188,513 |
177,623 |
167,654 |
158,509 |
150,113 |
142,390 |
135,277 |
128,716 |
122,655 |
117,048 |
111,854 |
|
$1,000 |
209,459 |
197,359 |
186,282 |
176,121 |
166,791 |
158,211 |
150,308 |
143,018 |
136,283 |
130,054 |
124,282 |
|
$1,100 |
230,405 |
217,095 |
204,910 |
193,734 |
183,471 |
174,032 |
165,338 |
157,319 |
149,912 |
143,059 |
136,710 |
|
$1,200 |
251,351 |
236,831 |
223,539 |
211,346 |
200,150 |
189,853 |
180,369 |
171,621 |
163,540 |
156,064 |
149,138 |
|
$1,300 |
272,297 |
256,567 |
242,167 |
228,958 |
216,829 |
205,674 |
195,400 |
185,923 |
177,169 |
169,070 |
161,566 |
|
$1,400 |
293,243 |
276,303 |
260,795 |
246,570 |
233,508 |
221,495 |
210,431 |
200,225 |
190,797 |
182,075 |
173,995 |
|
$1,500 |
314,189 |
296,039 |
279,423 |
264,182 |
250,188 |
237,316 |
225,461 |
214,526 |
204,425 |
195,080 |
186,423 |
|
$1,600 |
335,135 |
315,775 |
298,051 |
281,794 |
266,867 |
253,137 |
240,492 |
228,828 |
218,054 |
208,086 |
198,851 |
What type of house do you want?
Next you’ll want to define your needs, tastes and preferences for your new home. Your GMAC Real Estate Sales Associate will assist you in this process and by discussing this now; you’ll save plenty of time in the house-hunting process. Your Sales Associate will show you only the houses that fit these requirements.
u Describe the style of house you like, whether it is two-story, contemporary, ranch or something else.
u List your priorities in home features, such as a two- or three-car garage; gourmet kitchen; a family room or a formal dining room.
u Think about your lifestyle. If you don’t like yard work, ask your Sales Associate to show you condominiums, townhouses or garden homes with smaller yards.
Choosing a neighborhood
Bricks and boards may determine the cost of a home, but a neighborhood determines value.
u Consider the identity of the neighborhood. The overall impression given by an area is the key to its value.
u Drive through and around the neighborhood. Value is enhanced by other well-maintained properties. Conversely, be cautious of areas with unkempt yards and homes, and businesses mixed in with residences.
u Ask your Sales Associate about the property tax assessment in the area, including any special assessments or pending bond issues.
u Pay attention to neighborhood zoning. Good residential communities are zoned to keep out commercial and industrial users. Ask about other regulations in the neighborhood, such as on-street parking. Find out if this area is governed by any covenants.
u List which community services are important to you. Do you need to be close to shopping or a mass transit stop?
u Get an idea of who lives in the neighborhood by talking with people who live there.
Factor in the costs of commuting as you’re looking at neighborhoods. If your daily commute to work, school, shopping or other locations will be very long, you may have greater automobile expenses, such as gas, maintenance and insurance.
Picking the right home
Looking at houses
Your GMAC Real Estate Sales Associate will show you the homes that meet your needs and weed out the ones that don’t.
He or she will make arrangements for you to see only those homes that match your requirements, so your time is well spent. Remember to record your impressions about the homes you visit.
A key benefit of working with a GMAC Real Estate Sales Associate is that you’ll be informed about homes that are new on the market or those with price changes. He or she will identify all the potential sellers in your market by working with the entire real estate community — not just those who list with GMAC Real Estate.
Your new house has to feel right — but emotions aside, it has to work right, too.
u Hire a professional building inspector to make sure the house is in sound condition. Use his or her report to make informed decisions.
u Ask your Sales Associate if the GMAC Real Estate Home Protection Plan is available in your area. This warranty protects you in case of major mechanical system and problems with some appliances.
u Decide which flaws you can live with and which you’d prefer to have repaired. You may also be able to refinance some repairs in your mortgage.
Outside the home
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