Purchasing Your Home

The process:

1. Prequalify: The first and most important step in purchasing a home is to get prequalified by a mortgage lending institution. Depending on the type of loan you plan to secure, I will refer you to specific banks processing your type of loan. You will have two choices; you can get pre-approved or prequalified. A pre-approval will required you to fill out a mortgage application, have your credit pulled and you will need to submit official statements of debts and assets. A pre qualification is a precursor of that. You will only need an unofficial list of your income and debts (credit worthy debts only. So, no rent or phone bills), they will not pull credit. You can shop around to compare rates and closing fees. Some banks are also more conservative than others, you can shop around to compare your qualifying amount. 

Once they have completed your pre-qualification you will get a breakdown of the maximum amount you qualify for (you can choose to use less), your interest rate, monthly mortgage, estimated closing cost total and (if applicable) your down payment total. Armed with this information, I can help you begin to narrow down your search options and discuss payments options (savings, seller credits, government grants) and more. Once this is completed, the fun part begins! We get to look at homes! 

2. Choose your type of Loan: 

VA (Veterans Affairs) Mortgage 

This type of loan helps military service members, veterans and eligible spouses purchase a home with ZERO DOWN PAYMENT (closing fees are a separate expense). This type of loan is backed by VA therefore, there are no private mortgage insurance monthly costs. This is an amazing benefit that makes it effortless for members to become home owners. This is also the only type of loan that allows sellers to pay 100% of the buyers closing fees associated with the purchase. This benefit usually has the most competitive rates and can be used multiple times (on multiple homes). Owner occupancy is required (usually a year minimum with exceptions).

If you are an active duty member you qualify. If you are a reserve or guard members you qualify with 6 years of service or if you have at least 90 days active service. Spouses must check with the VA for qualifications. Note: disability benefits are counted toward total household income. You will also get a percentage of the VA funding fee waived. 

Rural Development "RD" (First Time Home Buyer) Mortgage; 0% Down Payment 

This type of loan is specifically for first time home buyers. This allows buyers who have not had a home or land in their name within the last 5 years to purchase a home with ZERO DOWN PAYMENT. (closing fees are a separate expense). Buyers using the RD program can use any of the participating banks (contact Nicole or Brandon for direct contact number to participating banks) or through USDA "RD Direct" where you don't go through a bank and use the program directly. You can have a portion of your closing fees paid by the sellers or you can utilize the Guam Housing Corporation Grant to pay up to $10,000.00 of your closing fees fore FREE. See below for more info. Income limits apply. You can reduce your income with deductions in the same manner deductions are applied to taxes. 

FHA 3% Down Payment Mortgage 

This Type of loan requires a 3% down payment (closing fees are a separate expense). 97% of the loan will be financed. Any mortgage that you secure with less than 20% down payment will be considered a more risky type of loan and will require Private Mortgage Insurance until you have paid off 20% of your loan down. Monthly cost for this insurance varies. The pros are less cash upfront. Cons are more monthly for a specific amount of years. Typically, the PMI timeframe is pre-calculated and automatically removed when you've reached 20% equity. You can use programs like the CAHAT to pay for your down payment and closing fees and the GHC "first time home buyer grant" to pay for closing fees. 

FHA 5% Down Payment Mortgage 

This type of mortgage will typically have the same terms as the 3% FHA loan. The benefits of using this loan will be a lower monthly payment and, your estimated timeframe to pay Private Mortgage Insurance should be shorter. 

Creative Financing 5/15/80 Mortgage 

There are many creative financing that exist in the world of real estate deals. My favrite within the banking system is the 5/15/80 which not many people know about or use. This consists of a combination of different things. On the surface level, this is a 20/80 conventional loan (20% down payment 80% finance) however, the 20% is broken down even more (in-house). The 20% is broken up into 5% down payment from you and 15% as a second mortgage but, considered an in-house or portfolio loan. This way, your main mortgage is packaged as an conventional loan which looks like you commited to a 20% downpayment. Why go through all this trouble?! By having your main loan as an 80% conventional loan you are not considered high risk and will not be required to pay private mortgage insurance every month for years and years to come. Instead, you will be paying almost the same amount to your second mortgage. This is a huge difference that should not be discounted. Instead of paying a third party (insurance company) and monthly fee you will never see again, you are instead paying toward your home equity (your homes total cash value).  You are paying your home loan down far faster then if you were paying an insurance company. Give me a call if you decide to secure this type of loan for a referral to a bank that can do this type of loan. 

20% Conventional Mortgage 

This type of loan is self explanatory. Your down payment will be 20% while your financed portion is 80%. By choosing this type of loan, you avoid paying Private Mortgage Insurance for many years (usually until your mortgage reaches 20% equity). If owner occupied your interest rates should be competitive with this type of loan. 

This is also the type of loan you will be required to secure for investment mortgages. These rates are usually higher then owner occupancy mortgages. For all U.S and foreign investors, refer to my Investing page. 

Other Financing: 

There can be other types of financing available. In some cases seller financing, or lease with option to purchase (rent to own) homes are available, depending on the type of market you are in. Give me a call to discuss these options.

3. Begin Looking at Homes 

Congratulations! On to the best part, looking at homes! Every time you log onto this website, it keeps a portal on my end of the homes you like. Begin to favorite the homes you like to keep them in your profile or you can submit a request to show but that does not keep the home marked on your end. Let me know when you have a list of homes that you would like to see and we can begin showings. 

If you are looking into buying condos, be sure to select fee simple on the advanced search page (refer here for the differences in fee simple and leasehold) 

4. Submit an Offer 

Once you have found a home of your dreams, we will sit to discuss your purchase agreement. We will go over contingencies of your contract (loan, inspections, special requests, fees, appraisal, escrow). We will then submit your offer/purcahse agreeement to the seller. Once the seller signs your purchase agreement, congratulations you are pending. The home is reserved for you until you close or cancel your agreement. 

5. You are pending. Begin Clearing Contingencies  

Once you are pending, we will begin the countdown of all your contingencies. Contingencies are items included in the contract that allow you to cancel the contract. In a sense you are putting in an offer and saying "seller I am interested in your home contingent upon these specific items. If they come back ok, we will buy your home. If they don't, we will be let out of this agreement without penalty". Common contingencies include obtaining a mortgage (common timeframe needed is 30 days), inspections- plumbing, electrical, structural and pest (45 days), surveys if desired (timeframe varies), appraisal (varies). Overall closing timeframe on guam is 60 days total. During this time I will also help you select insurance providers (typhoon, flood, fire insurance). 

7. Close on your home! 

Once all your contingencies are cleared, congratulations!! Its time to close on your home! Sit back and watch your equity/savings grow while you sleep!

Assistance in Closing Costs:

Guam Housing Corporation "FIRST TIME HOME BUYER GRANT" Free $10,000.00 Toward Closing Costs

One of the best programs out there, this is meant for first time home buyers using any program (except the VA loan because of the recapture clause). This program will give first time home buyers up to $10,000.00 to pay buyers closing fees. This is free and will never need to be paid back so long as the requirements of the program is met. You will be required to live int he home for 5 years, be a first time home buyer, U.S citizen and you will need to be pending on a home before you submit an application. There are no income limits for this program.

CAHAT

This program, also provided by Guam Housing Corporation is a loan program that can help buyers pay for closing fees and down payment. This is a great program to use in combination with the FHA 3% and 5% down payments loans. In the event where the grant is not an option, this could also be a good option to pay for fees with the RD loan as well. This is a 0% interest baring loan. Basically, you are just paying your down payment and fees back over time. The helps close the gap for many buyers who do not have the funds to put on a home upfront but have the ability to pay it over time.

Seller Credits 

In most cases you can get some or all your fees paid for by the seller, how much will depend not he program you are using. In this case, you will ask the seller upfront through the purchase agreement to pay a specific amount of your fees. Once the seller agrees to your terms on the offer, you will be guaranteed the funds through the sellers proceeds when you close on the loan. The funds will show up as a credit taken from the sellers overall sale profits and transferred to your fees.

Resouces:  

*When connecting utilities use this blog for information. Use the maps provided on this blog for the pin to each location to connect your utilities GPA/GWA Information 

*If you decide to connect services with Docomo, ask me about the VIP service. Don't wait in line, get special offers and waive your installation fees! Check out my prefered vendors list (under blogs)  for all the contact information on any services you will ever need. 

*If your annual taxes are not included in your mortgage payments, ask me about the tax exemption for owner occupants! Get a discount for living in your own home. (Form will be inserted here in the near future)

 

Home Buying Can Be Easy
As your buying agent, I can help streamline the process of buying a home and make it easier for you. I’ve aligned myself with the top professionals in the industry, and once an offer has been accepted, I will personally help facilitate the process to close on the home. By working closely with mortgage brokers, title and escrow companies, home inspectors, and home warranty companies I will provide you with the best service possible!

Curious about what’s happening in your neighborhood? You can create a custom market report to see what’s active, under contract, and sold in your neighborhood! 

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Contact us today to find out how we can be of assistance to you!