Dear Michael: We are in escrow on our first home. My family has given me the money for the down payment. The lender is giving us a hard time and wants a notarized document from my family stating that they will not hold me responsible for a debt to them. I am thinking of switching lenders. Is this common practice from a lender?
Answer: A few years ago, your lender would not have cared where your money came from. Actually, most lenders did not even care if you had money at all. This attitude from financial institutions can be blamed for some of the decline in the real estate market. Your lender is researching all aspects of your history in order to be satisfied that you pose no risk at repaying your loan.
Your family has given you a substantial sum of money for your down payment. This practice is common, as some buyers need financial assistance in buying a home. The banks just want to make sure that you will not owe any more money and that you can meet your monthly mortgage. I suggest taking the steps your lender is asking and get the documents notarized. You probably wouldn’t want to start the loan process all over again. Your next lender may ask for the same notarized document or more.
Dear Michael: I have been renting for years and would like to buy a home. How do I begin the process of buying a home?
Answer: There are four important questions you must first ask yourself. First, are you seriously ready to buy a home? Committing to purchasing a home is different than wanting to buy a home.
Second, how much can you afford in a monthly mortgage payment that includes property taxes and insurance? Contact a mortgage broker and have him/her pre-approve you for a loan. He/she will help you determine how much you can afford.
Third, how much space do you need? A smaller home may not be right for you, but a bigger home may be out of your price range.
Fourth, what areas of town would you consider? Hire a Realtor to help you locate the right home in the right area. Some areas may be out of your price range.
After you’ve answered these questions, make a list of things to do, and start casual researching. Talk to friends and family, go online and drive through neighborhoods. Once you’ve completed your tasks, call a Realtor to work for you.
Dear Michael: We are in escrow on a home. Do we have to get homeowner insurance? We would rather not.
Answer: Unless you are paying cash for your home, a paid homeowner’s insurance policy is required at closing, so arrangements will have to be made prior to the close. Plus, involving the insurance agent early in the home-buying process can save you money and problems before the close of escrow. Insurance agents are a great resource for information on home safety and can give tips on how to keep insurance premiums low. If you are paying cash for your home, which is unlikely for most buyers, I recommend that you purchase homeowners insurance. The premium for a $650,000 home will run approximately $1,200 per year and it is worth the cost.
Dear Michael: We are in disagreement with the seller about the window curtains. We believe they should be a part of the sale and the seller doesn’t. Both of our agents are trying to find a resolution. Shouldn’t the seller leave the curtains behind?
Answer: Fixtures are defined as any kind of personal property that is permanently attached to a house such as drapery rods, built-in bookcases, tacked-down carpeting, furnace, water purification system and light fixtures, to name a few. They automatically stay with the house unless otherwise specified in the sales contract. Consider anything not nailed down to be negotiable items. This often involves appliances that are not built in, such as a washer, dryer or refrigerator. Unless the seller specifically excluded the curtains, they should be part of the sale.
Michael Kayem is a Realtor with Re/max/Execs serving Culver City and the Westside since 2001. Contact him at (310) 390-3337 or homes@agentmichael.com.