Beyond the coursework required to become a realtor, there are additional classes that are required to earn specialized training in designation. This is important also in finding the right realtor. Of course, any realtor has been trained in the buying and selling of a home, and is capable of doing both; to become specialized in home buying; realtors take additional classes to gain either the ABR or the ABRM. These are Accredited Buyer Representatives. If you are buying a home, and looking for the right realtor, you may want to consider one who has achieved the ABR/ABRM status.

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There are also other specialized classes that can be taken to achieve such ranks as a CCIM, which is a certified commercial investment member. However, these credentials are not necessary to helping someone who is buying a home. Just be aware that there are courses to cover every aspect of buying and selling a home. When you are looking for the right realtor, you want to know they have your best interest in mind.

When you are buying a home or selling a home, there are different types of real estate relationships in which you can enter. An agency relationship is one where you work generally through an agency which has the capacity to handle both the buying and selling aspects of the transaction. The “agent” understands the responsibilities of both buyer and seller, and their relationship with you is normally put in a written agreement, and a contract. There are two types of contracts, a listing agreement, which makes the agent a seller’s agent; and a “buyer-broker” agreement which signifies the agent will work on behalf of the buyer. If you are buying a home, be aware that until that buyer-broker agreement is signed, the agent is working on behalf of the seller.

The difference between a Buyer’s and Seller’s Broker is that if you are a buyer, you could say to an agent “I want to offer $175,000 for the home, but I’ll go as high as $190,000, but don’t tell the seller that.” If you have not signed a buyer-broker agreement, and are working through an agency, the agent is duty bound to tell the seller exactly what you said. A seller’s agent is not duty bound at all to the buyer. If you are looking for the right realtor, the only thing you really need to be sure of is that they sign a buyer-broker agreement with you. For this reason, many people who are buying a home go with a realtor who has taken the additional courses to become an accredited buyer’s representative.

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Reduction in mortgage builds equity:
Every month that you make a mortgage or house payment, the amount which is above the interest amount is built as equity of your home. Equity builds up to a lot after time and can be saved, or turned into a home equity loan or line of credit.

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Home Equity Loans:
Unlike most credit and credit card loans, you can deduct the interest on a home equity loan. The loan is given against the equity in your home; the money can be used for home improvement, college tuitions, or even starting your own business. These are a win-win situation because the interest rate is lower, and you can add value to your home by making home repairs.

Capital Gains Exclusion:
$250,000 per individual or $500,000 per married couple can be excluded every 24 months as long as you have lived in your home 2 out of the last 5 years. This also applies to people over 55 years of age. With the Capital Gains exclusion, that can add up to a tidy profit should you decide to sell.

Perks for first home and vacation home buyers:
Taxes paid for a vacation home or a first home are completely deductable on income tax. There are also laws in certain states, such as California, which add other perks to these home buyers.

Mortgage interest is deductable:
So long as you have paid off at least part of your mortgage principal, and your mortgage balance is less than the price of your home, you can fully deduct the mortgage interest off of your taxes.

Appreciation:
When you buy a car, the value decreases every year, which is called depreciation. Buying a home, however, and building the home equity increases the value and is called appreciation. While the amount of the appreciation may fluctuate, overall, it is a value building asset to buying a home.

Home equity may just be the saving grace for many people in this economy. Especially given the above reasons, buying a home is actually money in the bank. You are building value and equity with each payment you make. Although laws may change, and the economy may fluctuate, nothing takes away the equity that is built when you own a home.

We may just be moving into a time when buying a home and building up that home equity is in the favor of the home-buyer. The housing market had recently hit a slump, but someone, at some point, is going to have to get those houses sold and that may work in the new home buyer’s favor.

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Lenders Requirements:
You will first need to calculate how much your mortgage payment will be including PITI (explained below). In general lenders require that your housing payment per month be less than 28-33 percent of your gross monthly income. Besides that, all total monthly debt payments should be less than 36% of your gross monthly income. This includes things such as student loans, credit cards and mortgage costs.

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PITI:
PITI stands for the mortgage principle, insurance, taxes and interest. This is what lenders are looking at. All of these things combined determine your mortgage amount. Of course, these are not the only costs of buying a home.

Down Payment:
This is the money that you put “down” toward buying a home. It translates into a monetary commitment to buying the home. Most down payments are 5-20 percent of the value of the home. If you pay less than 20% down, you may be required to purchase a PMI which is Private mortgage insurance. This is money that protects the lender if you default on the loan. PMI is normally 0.15%-2.5% of the loan amount.

Closing costs and Loan origination and other fees
There are many things involved in closing fees, most of which will be listed below. For the most part, closing costs are considered the tax and insurance that you pay at closing. They normally range from 2-3% of the total amount on the loan.

• Loan Origination fees on a $200,000 home in Georgia; Origination fee would be $2000, Application fee approx. $422, Commitment fee $565, Funding fee, $225, Processing, approx 376, Document prep, $170
• Underwriting
• Tax service
• Home appraisal
• Flood certification
• Pest and other inspection
• Title insurance
• Title work
• Attorneys fees
• Mortgage points
• Title insurance charges
• Other: Be sure to consider that your lender may require you to have certain insurance for the area in which you intend to buy. For example; if you are buying a home in Florida, you may have to have flood insurance as well as other types of storm insurance against things like hurricanes, or earthquakes in California. You also have to have first year hazard insurance.

Note that fees are sometimes paid by the institution covering the loan. This can be very helpful in keeping down closing costs and many lenders now pitch in some of the closing costs as perks to take loans through them.

Be sure to talk to your lender about any costs other than those listed. It varies from state to state and lender to lender on what charges you are responsible for and what costs the lender picks up. Having an idea of the general costs, however, prepares you before you start to look for your home.

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People apply for home loans for different reasons. It may be that you are purchasing your first home or you could be thinking about refinancing the home you already are in. If you are looking to borrow money on the money you already have built in equity, the lending institutions make it much easier. Purchasing a home for the first time may involve more investigations by the lenders. If you are looking to refinance your home, what you are applying for is a “Home equity Loan”.

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When getting a loan for the first time for a home, the lenders will want to do full research on the home you want to buy. You will need to apply not only for the amount to cover the cost of the home, but for things such as attorney fees and closing costs as well. When you apply for a loan, your lender should be able to provide you with a list of things you will need. Often, lenders will take on some of the closing costs, which is a plus for the buyers. The only way to know which institutions will help with costs is to shop for lenders. When getting a home loan, having help on some of the costs can be very beneficial.

When buying a home, costs add up. Often the costs add up into several thousand dollars or more with closing costs. The time to find out what your lender will help with is before you apply for the home loan. Costs covered often include things like documentation fees, or maybe application fees. Check out these facts before getting your home loan.

Buying a home can be an exciting time. Be sure you understand everything before signing on the dotted line. Do some checking when applying for a home loan and certainly before agreeing to that home loan! Check lenders fees and expectations on home loans.

Mortgages are not “one size fits all.” Even with lending institutions, there can be several types of loans available to you. Home buying is something lenders deal in every day, so they know what would work for your given situation.

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