Home Buyer's Library: Where Do I Start?

Where Do I Start?
Home Buyer's Checklist
The Home Inspection
What Documentation Do I Need?
What to Expect in the Loan Process

Buying a home is one of the most important and involved decisions you'll ever make. To help you through this process, Huntington has compiled this Home Buyer's Library.

Looking at homes

Finding the right home requires patience and determination. Real estate agents can be helpful to buyers because they're knowledgeable about their markets and have access to multiple listing services, which publish directories of all properties listed in a particular market. When you work with a real estate agent, he or she will consult the multiple listing directory to find available properties which meet your needs. The real estate agent will then arrange to show you these properties.

Another advantage of working with a real estate agent is that he or she will usually have information about school systems, tax rates, water and sewer charges, public transportation and other concerns that might affect your decision to buy a particular home.

Deciding to buy

Before you make an offer, it's a good idea to look at as many homes as possible. If you've identified one or more specific areas where you'd like to live, look at enough homes in the area to get a feel for real estate values.

During the negotiation process, you may ask for contingencies in your Purchase Agreement. These are conditions that must be satisfied or you will not be required to go through with the purchase after your offer is accepted. For example, most buyers specify that their Agreement is contingent on their obtaining satisfactory mortgage financing. It's also a good idea to include a favorable home inspection on your list of contingencies.

What can I afford?

A general rule of thumb is that housing expenses (including mortgage payments, insurance, taxes, etc.) shouldn't exceed 28% of the home buyer's gross income. However, many factors can affect how much you can borrow.

Huntington Mortgage Group can help you identify these factors and establish a financial balance through our Pre-Approval Program.

We will also issue a Pre-Approval Commitment Letter that shows sellers and real estate agents that you are a qualified buyer. In many cases, having a Pre-Approval Commitment Letter will put you in a better bargaining position because you can shop for a home with confidence, knowing that your financing will be there when you need it.

In the past, lenders typically required a 20% down payment on mortgage loans. A large down payment was required because it helped assure lenders that borrowers could make the monthly mortgage payments. With so much equity already invested in the home, buyers were more likely to make their payments. Today, many loans are made with as little as a 3% to 5% down payment.

With private mortgage insurance, lenders are more willing to make loans with less than 20% down. This is because the mortgage insurer acts as a guarantor and shares some of the lending risk with the lender. If the borrower defaults on the mortgage loan and the lender takes title to the property, the mortgage insurance will reduce or eliminate loss to the lender.

Because private mortgage insurance can give you the option of putting less money down, you have much more flexibility in your home buying decision. By selecting a lower down payment loan, you can purchase a larger, more comfortable home today rather than in the future. Also, by putting less money down, you'll have more cash available for extra touches, like furnishings or landscaping.