Frequently Asked Questions (FAQ) For Real Estate Buyers

1. Why should we work with Fran Coulter & Ira M. Rumick to purchase a home?
For a wide variety of reasons!  With our decades of local real estate experience and years of management & training we are perfectly positioned to give you the best real estate service available today!  We have a team of experienced lenders, home inspectors, lawyers & trades people to recommend if you need them.  Ira’s background in finance is helpful in helping you analyze your mortgage alternatives.  We provide checklists and guidance every step of the way.
When it comes to finding your property we not only use the Multiple Listing Service, we also draw from the best sites on the Internet and our network of contacts both inside and outside of the industry.  Let us know what you are looking for AND WE WILL FIND IT FOR YOU!!  You can also search available listings yourself through the whole Chicago area right from this site with no need to register or jump through hoops.

2. Why should I buy, instead of rent?
A home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal & state income taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you'll enjoy having something that's all yours - a home where your own personal style will tell the world who you are.

3. Can I become a homebuyer if I have ever had bad credit or don't have a large down-payment?
You may be a good candidate for one of the federal mortgage programs.  Or you may want to call Jason Brodsky of PHH Mortgage at (847) 681-0220.  He can assist you by phone, email or in-person.

4. Should I use a real estate broker? How do I find one?
Per the Federal Housing Administration using a real estate broker is a very good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you'll want to know about a neighborhood you may be considering...the quality of schools, the number of children in the area, traffic volume, and more. He or she can help you determine the price range you can afford and search for homes you'll want to see. With immediate access to properties as soon as they're put on the market, the broker can save you hours of wasted driving-around time. When it's time to make an offer on a home, the broker can point out ways to structure your deal to save you money. He or she will guide you through the paperwork, and be there to answer any questions.  And you don't have to pay the broker anything!  The payment comes from the home seller - not from you, the buyer.

5. How much money do I need to buy a home?
That depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money, the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house.
Once your offer for a home is accepted, the broker, most likely the listing broker, will put your earnest money into an escrow account. That money will be applied to the down payment or closing costs.  The amount of your earnest money depends on what has been negotiated in the contract.
The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. That's why many first-time homebuyers turn to HUD's FHA for help. FHA loans require only 3% down - and sometimes less.
Closing costs can average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise.

6. How do I find the right lender?
You can finance a home with a loan from a bank, a savings and loan, a credit union, a private mortgage company, or various state government lenders. Shopping for a loan is like shopping for any other large purchase: you can save money if you take some time to look around for the best prices. Different lenders can offer quite different interest rates and loan fees; and as you know, a lower interest rate can make a big difference in how much home you can afford. Talk with several lenders before you decide. Most lenders need 3-6 weeks for the whole loan approval process.

7. In addition to the mortgage payment, what other costs do I need to consider?
First you'll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate broker will be able to help you get information from the seller on how much utilities normally cost. In addition, you may have homeowners association or condo association dues. You'll definitely have property taxes, and you also may have to purchase local transfer stamps, depending on where you buy. Property taxes frequently are rolled into your mortgage payment so that won’t require any up-front costs.

8. What will my mortgage cover?
Most loans have 4 parts: principal - the repayment of the amount you actually borrowed; interest - payment to the lender for the money you've borrowed; homeowners insurance - the monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes - the annual taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in principal - sometimes two or three times more.  Because of the way loans are structured, in the first years you'll be paying mostly interest in your monthly payments. In the final years, you'll be paying mostly principal.

9. What do I need when I apply for a mortgage?
You should have: 1) social security numbers for both you and your spouse, if both of you are applying for the loan; 2) copies of your checking and savings account statements for the past 6 months; 3) evidence of any other assets like bonds or stocks; 4) a recent paycheck stub detailing your earnings; 5) a list of all credit card accounts and the approximate monthly amounts owed on each; 6) a list of account numbers and balances due on outstanding loans, such as car loans; 7) copies of your last 2 years' income tax statements; and 8) the name and address of someone who can verify your employment. Depending on your lender, you may be asked for other information.

10. I know there are many types of mortgages - how do I know which one is best for me?
There are many types of mortgages, and the more you know about them before you start, the better. Most people use a fixed-rate mortgage where your interest rate stays the same for the term of the mortgage, which normally is 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it. Another kind of mortgage is an Adjustable Rate Mortgage (ARM). With this kind of mortgage, your interest rate and monthly payments usually start lower than a fixed rate mortgage. However your rate and payment can change either up or down, as often as once or twice a year. The adjustment is tied to a financial index, such as the U.S. Treasury Securities Index. The advantage of an ARM is that you may be able to afford a more expensive home because your initial interest rate will be lower.

11. When I find the home I want, how much should I offer?
While your real estate agent can help you here there are several things you should also consider: 1) Is the asking price in line with prices of similar homes in the area? 2) Is the home in good condition or will you have to spend a substantial amount of money making it the way you want it? You may also want to get a professional home inspection before you make your offer. Your real estate broker can help you arrange one. 3) How long has the home been on the market? If it's been for sale for awhile, the seller may be more eager to accept a lower offer. 4) How much mortgage will be required? Make sure you really can afford whatever offer you make. 5) How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted. In some cases, you may even want to offer more than the asking price, if you know you are competing with others for the house

12. What if my offer is rejected?
They often are but don't let that discourage you. Now you begin negotiating. Your broker will help you. You may have to offer more money, but you may ask the seller to cover some or all of your closing costs or to make repairs that wouldn't normally be expected. Often, negotiations on a price go back and forth several times before a deal is made. Just remember - don't get so caught up in negotiations that you lose sight of what you really want and can afford!

13. What will happen at closing?
You'll sit at the closing table with your attorney, your broker, the broker for the seller, possibly the seller, and a closing agent. The closing agent will have a stack of papers for you and the seller to sign.   Your attorney will review these documents with you for your approval.  If all goes smoothly you’ll turn over your check and then receive the keys to your new home!