Utah County Real Estate

Sell Your Utah County Home Before You Buy a New One

When it comes time to purchase a new Utah County Home, the question always comes up, should I sell my old home before I buy the new one?  Depending on your credit situation and your ability to qualify for two loans, this question could be easily resolved.  We will assume you have excellent credit and can do whatever you please. 

It is always better to have your present home sold before you make an offer on the new home.  If you have an offer with a contingency of selling the old home, the seller will be less likely to accept the offer or allow better terms.  You will always be in a better bargaining position if you were able to move in without delay. 

Credit terms on you new loan will also be better based on you living in the new home as your primary residence.  Banks never offer better rates or terms on a second home. 

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Utah County Home Buyers Beware – Yield Spread Premium (YSP)

As a Loan Officer and Realtor I have noticed an area of Home Loans and Mortgages that goes unnoticed by the consumer,  that of Yield Spread Premium.  Most borrowers believe that their Loan Officer makes his profit with the Loan Origination Fee.  But most don’t understand that the Loan Officer can make up to 4 percent more, on most loans, with the Yield Spread Premium.

What is Yield Spread Premium?

Yield Spread Premium, or YSP, is the fee paid by the Lender to the broker in exchange for a higher interest rate, or an above wholesale rate.  The borrower may qualify for a certain rate, but the broker can charge this fee and give the borrower a slightly higher rate to make more commission.  YSP was originally intended as a way for the borrowers to avoid having to pay any money up front.  Today it is seen primarily as just another fee the borrower gets stuck with.  The YSP is disclosed by law on the Good Faith Estimate.  Usually the YSP is stated as between 0 and 4 percent, at the bottom in fine print.

What can Borrowers Do?

The best way to understand YSP is to discuss the topic with your Mortgage Loan Officer.  Make sure he/she explains the difference between Loan Origination and YSP, and continues to keep you informed up to and including closing.   

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Annual Percentage Rate (APR) and Utah County Homes for Sale

As a Loan Officer here in Utah County, I have found that many consumers don’t fully understand the term Annual Percentage Rate.  Probably no other disclosure is as baffling to the average consumer as APR is.  Few understand how the APR can be higher than the interest rate.  The APR is the finance charge expressed as a numerical percentage, which is an expression of the annualized finance charge.  The APR includes the interest rate plus all of those items that are included in the finance charge.

Although few mortgage lenders actually do it, lenders are required to disclose the APR when inquiries are made orally.  The APR also has to be fully disclosed on any advertising materials. 

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Utah County Home Loan Documentation

When it comes time to purchase new Utah County Home, your first step in the purchase process is to get pre-qualified for your home loan.  Once you contact a Mortgage loan officer, he will ask you to fill out a Mortgage Loan Application (1003) and supply him with documentation.  The documentation required will vary, but generally you will supply the following:

·         Federal income tax statements and verification of any additional income

·         Your two most recent W2’s

·         Current paycheck stubs

·         Recent bank statements

·         Asset and liability information (stocks, bonds, other real estate, etc.)

Good Luck and Happy house hunting.

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Utah County Mortgages and Getting the Best Rate

As a Utah County Home Buyer, it only makes sense to try and get the lowest rate possible when obtaining a Home Loan.  After all, the rate is the primary factor in determining your house payment.  But how do you get a low rate when applying for a home loan?  This is the primary question that most home buyers want to know.  I would like to explain some important ideas that you need to keep in mind.

Credit Score

One of the primary factors in helping to determine your interest rate is your credit score and financial history.  In other words the best interest rates are usually reserved for those with the highest credit score.  So if you credit score is not very high the chance of getting a lower interest rate is not very good.  It is very important,  that,  prior to applying  for a home loan, you pay all of your bills on time and that you do carry some line of credit so you can show the lenders that you pay your bills.

Type of Loan

Recently, I am sure you have noticed that the home loan market has taken a dramatic change.  There are not nearly as many programs available as there used to be.  Most banks require that the home buyer contribute more down payment.  They feel that with the higher down payment , the buyer will be less likely to default on their loan.  But there are still a few loan programs available, so make sure that your loan officer takes you through all the types of loans that you have available to you based on your financial situation.

Yield Spread Premium

The one factor that most home buyers are not familiar with is Yield Spread Premium.  Yield Spread premium is usually disclosed to the home buyer in the good-faith estimate as being between 0% and 4%.  The loan officer doesn’t have to tell you the exact percentage, mainly because he/she does not know for sure, because rates are constantly changing.  Most states are now required to disclose the final Yield Spread Premium on the closing documents.  Make sure you understand this concept thoroughly prior to going to closing, because you could be real surprised if you don’t.  Avoid any problems at closing by having your loan officer explain this program in detail during the transaction.  Yield Spread Premium is where most loan officers make the bulk of their commission.  The balance comes from the Loan Origination fee.  Most important, is become informed, ask many questions of your loan officer throughout the entire process.

Purchasing a home can be a wonderful experience, if you are not prepared prior to entering the process it can be a bad a one.  Make sure you keep your credit in good standing, save up as much money as possible for a down payment and become informed and everything will go great.  Good Luck.

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Getting Pre-Qualified is your first step when you Purchase a Utah County Home

The time has come to start shopping for a home to purchase.  The first thing that you should do is to get pre-qualified for a Utah County home loan.  It is very important to understand what your price range is prior to looking so you don’t waste time looking at properties that are out of your price range.

Where do you begin?

Most Utah County Realtors work with a trusted network of Mortgage professionals, who can assist you in getting pre-approved for a loan so that you can comfortably begin looking at homes with the assurance that you can obtain the proper financing.

Generally, Utah County loan officers can help you with a pre-approval by getting some basic information (address, social security number, etc.) over the phone or Internet.

If you choose to purchase a new home, many builders have mortgage companies that will offer large incentives to use them.

Most Utah County Realtors prefer that their clients begin the loan process before they begin looking actively at homes, in order to best utilize your time as well as theirs.  It also helps immensely having a pre-approval letter in hand when you are making an offer on your new home.

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Finding the Perfect Utah County Home to Purchase

There are a number of things to consider when choosing the right Utah County Home and everyone’s priority is different.  Where should it be located; neighborhood preference; single or multi-level, number of bedrooms and baths; square footage: yard size; features: quality of school; age of home; interior or exterior appeal; and most of all, price, because if it’s out of your budget, it can’t be considered.

Make a List

Make a priority list of things important to you.  Start with the most important, things you have to have.  Then work down the list, putting them in order of most important.  After you are done, go up to the top and move down until you get to a place where you can draw a line.  Above the line should be all of the items you have to have, and below the line should be all of the things that would be nice to have.  This will save you a great deal of time and provide a clear focus for your house hunting.

Working with a Utah County Realtor

Although the Internet can provide you with homes matching your criteria and it seems easy to drive around, take notes, and set up appointments to view homes for sale, using an agent can be more efficient.  They can do the same thing for you, but by working with a Utah County Realtor, you benefit from their knowledge and experience also.  Their advice could better help you determine the right home for you and they can assist you with the actual purchase contract.

What to Do When You Find the Right Home

Considering everything has come together, the price is within your budget, and a home has met your demands, it’s time to make an offer.  Part of the offer should require a home inspection so you have reliable information about any major problems or repairs you might incur and how they will be handled.  If your offer is accepted, the sale proceeds.  If your offer is not accepted, the seller may counter-offer with different terms.

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Contingencies and the Utah County Purchase Offer

When it comes time to make an offer on your new home, occasionally there are a few obstacles that make it difficult.  It is sometimes hard to discover all the potential problems that might go wrong, but you might want to anticipate some so that you can cancel the contract without penalty.  These are called “contingencies and you must make sure to include them when you offer to buy a Utah County Home.

One of the more popular contingencies is, having to sell a previous home before purchasing a Utah County Home.  Making the closing the sale of the home a condition of your offer is important to avoid having to pay two mortgage payments instead of one. 

Other popular contingencies include the ability to obtain financing, property appraising high enough for lender consideration and inspections being satisfactory.  Basically, contingencies protect you in case you cannot perform or choose not to perform on a promise to buy a home.  If you cancel a contract without having built-in conditions and contingencies, you could find yourself forfeiting your earnest money deposit.

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Home Inspections Utah County Homes for Sale

Well, you just made an offer on a beautiful new home.  You are excited about the possibilities that this new home is going to bring to you and your family.  Don’t let this dream turn into a nightmare because you decided not to spend a little extra money on a Home Inspection.

A study conducted by the American Society of Home Inspectors and the NAR in 2001 found that 77% of all homebuyers insisted on a Home Inspection prior to purchasing their property, and 97% of that group believes the service was a good value for the price.

Next to the financial contingency in the Real Estate Purchase Contract, the Home Inspection is the biggest reason you need to consider before purchasing the home.  This is where you have the right to back out of the contract, if the report indicates a serious problem.  Better yet, the peace of mind a Home Inspection will bring is endless. 

I recommend to all my buyers that a Utah County Home Inspection is a must.  The benefits that come from having a Home Inspection far outweigh the cost.  Have you home Inspected and I know you will thank me later for the suggestion.

National Property Inspections

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Utah County Home Buyer Representation – Buyer Agent vs. Seller Agent

During the past 25 or so years, Utah County Home Buyers have been able to choose between Buyer agents or the Sellers agent representing the Seller, to buy a home from. Many buyers didn’t even know that they could use a buyer agent or even if they were available. Most home buyers assumed the agent showing the home represented them. Seller agents were obligated to represent the seller’s interest unless they had a separate written agreement with the buyer to represent them.

The FTC did a study of the Real Estate brokerage industry in 1983 and determined that most home buyers actually thought that the Real Estate agent showing them homes was working in their best interest, the vast majority were wrong. The FTC started putting pressure on the states to have real estate agents disclose in writing to the consumers whose side they were representing. In the early 1990’s most stated adopted agency disclosure laws requiring real estate agents to finally tell consumers the truth about who they were working for. The NAR endorsed buyer agency as an alternative in 1993. 

Today agency is broken down into 3 categories, Seller, Buyer and Limited (Dual). The Real Estate agent has to disclose in writing, which he is representing in the transaction and the other party has to acknowledge their understanding of the representation during the process of buying and selling of a home.

There are three big advantages of having an Exclusive Buyer Broker agreement when you are purchasing a new home.

Unbiased view of the Real Estate Market

Seller agents want to sell you their own property that they have listed. Buyer agents want to show you as many properties as possible to help you make an educated decision.

Negotiate in Buyer best interest

Seller agents typically try to get the highest price they can for their seller client. The higher the selling price the larger their commission and happier their client is.

Savings on Loans and costs

Once a buyer agent has negotiated a purchase contract, then he works hard to save you money on loans, inspections, repairs and closing costs. The buyer benefits by having his agent focus completely on him and trying to make his experience a good one.

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