The Ultimate Guide to Home Buying
By Grant Moon
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The Ultimate Guide to Home Buying - Grant Moon
Copyright© 2018
All Rights Reserved
Home Captain, Inc
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher nor author are engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise with the prior permission of the publisher, Home Captain Inc.
Print ISBN: 978-1-54393-523-3
eBook ISBN: 978-1-54393-524-0
This book is dedicated to the hardworking families that aspire to own their own home. To my Mom who while raising three children as a single mother worked the overnight shift and was able to buy her home. To my friends and family for all of their encouragement along the way. To the brave men and women in uniform that dedicate themselves to preserving the American way of life.
Table of Contents
About Grant Moon
Prologue
1 Buying or Renting: The Questions You Must Ask
How is the rent in the area where you want to live?
Are You Really Ready?
What’s Your Timeline?
2 Your Home Buying Team
Your Real Estate Agent
Your Mortgage Lender
Your Loan Processor
Your Property Inspector
Your Appraiser
Your Credit Agency
Your Settlement Agent
Your Insurance Agent
3 The Home Buying Journey
The Buyers
The Property
4 Selecting a Real Estate Agent
Agent Criteria
Getting the Most from Your Agent
What You Should Expect from an Agent
Buyer’s Agent vs. Listing Agent
Needs vs. Wants
Location
Bringing it All Together
General Rankings of Needs and Wants
Budget Template
5 Financing Your Home
Your Financial House
Credit
Paperwork
Your Preapproval
6 Financing Options: Which is Right for You?
Your Two Basic Choices
VA Loans
FHA
USDA
Refinancing a Government-Backed Loan
Conventional Loans
Which is Better, Government or Conventional?
Impound and Escrow Accounts
7 Finding a Home, Making the Offer and Negotiations
Crafting an Offer
8 The Clock Starts Ticking:
What Goes on Behind the Scenes50
A Busy Back Room
Getting to the Settlement Table
9 Going Forward
Locks and Keys
Lawn and Garden
Little Things
10 Bonus: Buying Investment Properties
What to Buy?
Cash Flow
Financing the Rental
Calculating Income
Management
Cap Rates
Cash on Cash Returns
Appreciation and Cash Flow
Watch Out for Those Bumps
About Home Captain
Glossary of Terms
About Grant Moon
Grant is the CEO of Home Captain, Inc. one of the fastest growing real estate companies helping customers obtain the dream of homeownership by providing them with pre-screen real estate agents, a home buying concierge, and integrations with lenders providing ensuring all parties of the home buying ecosystem are working on behalf of the buyer as a cohesive team.
Prior to founding Home Captain, Grant served in the US Army in a number of capacities. In the corporate sector, Grant has worked and led teams for Fortune 50 and other publicly traded companies in Sales, Marketing, E-commerce, and Strategic Partnerships disciplines.
Grant realized the value of homeownership upon returning from a tour of duty in Iraq in 2008 when attempting to use his VA Home Loan Benefits. He bought a multi-family home in Massachusetts and enjoyed the pride of homeownership but also the value of being a homeowner. He went on to become an active real estate investor owning and operating ten housing units across the United States.
In 2013, to help veterans understand using their benefits to buy a home, Grant wrote the Ultimate Guide to VA loans which has distributed 1.8 Million copies which helps service members understand their specialized home loan benefits and use that knowledge to become homeowners. In further assisting the veteran community by educating real estate agents in working with veterans, he created the VA Loan Certification that allows agents to take a course and receive continuing education credits.
Grant has an MS in Technology Management from Columbia University, MBA from Babson College, and a BS in Business Administration from Endicott College.
Prologue
This book will properly prepare you to buy and finance a home. From how to find an agent to what happens after you close. The Ultimate Guide to Home Buying is the complete guide you’ll need. Read this first before you get too much further in the process. My goal is to provide you with unbiased, objective advice on how to find and finance your first home, not to sign a listing agreement.
Buying your first home is an exciting journey, but all too often people go into the process unprepared, and the exciting journey quickly turns into a nightmare. When word gets out that you’re thinking about buying your first home, you’ll be surprised at how many people suddenly appear to help. From lender referrals to real estate agents, there is no shortage of advice, most of it unsolicited. Sometimes simply the velocity of advice comes at you so quickly it gets confusing and the noise soon drowns out the excitement.
However, you’ve made the right choice with this book. There is no other book in the marketplace that will better prepare you for your home buying journey.
And speaking of preparation, let me talk first about hesitation and a little background. The millennials, those roughly between the ages of 18 and 34, have been handed the mantle of having the greatest economic impact by the baby boomers. Baby boomers carried this title for years but are now retiring, downsizing and well, simply buying less. It’s the millennials that are taking over.
But it’s also the millennials that can’t help but look back just a few short years and saw headlines of foreclosures, bank failures, and toxic mortgages. Hence the hesitation about buying a home and remaining a renter, maybe forever!
Let’s take a brief journey together and understand how and why the housing crisis happened leading up to 2008. In the early to mid-2000s, certain lenders began introducing mortgage loan programs that would qualify more people. Those who could qualify for a traditional loan that could prove steady employment, decent credit, and a down payment bought homes. But at some point, the available pool of buyers dried up. To address this, mortgage companies slowly introduced mortgage programs that relaxed traditional approval guidelines.
For example, the concept of stated
documentation became widely accepted. A stated income loan program, for example, verified a borrower’s income not with copies of recent paycheck stubs but just used whatever was stated in the loan application. Stated documentation included not verifying enough cash to close using bank statements. Borrowers flocked to these loans and bought more houses which of course drove up the price of those same homes.
Once that pool of borrowers dried up, lenders lowered credit score requirements. Lowered down payments, and so on. Because property values continued to rise lenders didn’t worry as much about foreclosing because if they did foreclose they could always sell the property and still get their money back. Yet all that came crashing down when consumers bought real estate with no job, no money and poor credit. Property values began to fall as more and more homes were taken back by the bank. Values fell so fast so much that people owed more on the mortgage than what the property was worth. They were stuck. And they were foreclosed upon
In 2009 Congress created the Consumer Financial Protection Bureau, or CFPB. This newly created agency had authority over most all credit transactions in the United States, including