Yes!

In fact, we encourage it for the following reasons:

• My6% is FREE to use
• Real estate agents are human (& therefore prone to mistakes)
• The only person whom you can be sure has your best interests in mind is YOU!
• A home is the largest & most personal purchase most people will ever make, so it is important to know exactly what is happening at every step

Normally:

• Total real estate agent commission is 6% of the total sales price
• This 6% commission is paid to the seller's broker/agent, who then splits it with the buyer's broker/agent (3% each)

My6%:

• If there is no "Buyer's Agent" to pay, you may be able to reduce the overall agent fee in the conract to 3%.
• The "Seller's Agent" should agree to this reduction because it does not reduce their fee at all.
• In turn, the Seller should agree to reduce the overall price of the home by 3%

If you're not comfortable buying a home without additional help, contact a real estate attorney.

• Unless you need numerous hours of assistance, an attorney will be cheaper than a Broker.
• Agents & Brokers cannot give legal advice anyway.

---

To find a real estate attorney in your area, go to one of these websites:      
                                                                                                                              $ Attorney $

NOLO
Lawyers.com

The amounts below are estimates based on a typical home purchase.

Down Payment (0% - 30% of the purchase price)

• Down payment amount will vary depending on the lender, property, & loan type
• Typically, a down payment is from 5% - 30% of the purchase price of the home
• Certain loans do not require a down payment
• Loan types are discussed further in block 2) My Loan

Earnest Money (1% - 3% of the purchase price)

• Earnest Money is a "good faith" payment to show you are serious about buying the home.
• Typically, you're required to pay earnest money within 48 hours of the contract being signed.

Home Inspection ($250 - $500)

• Home Inspections are not always required but highly recommended.
• Once the contract is signed, you'll have an Inspection Contingency Period to have an inspection done.
• During the contingency period, you can still back out of the contract if you find a problem with the home.

Appraisal ($250 - $500) 

• As a part of underwriting, your lender will order an Appraisal to verify the home's value. 
• Appraisal fee is usually paid to the lender before closing/settlement (Paid Outside of Closing).

Homeowner's Insurance (.03% of the purchase price)

• You must purchse your first year’s Homeowner's Insurance policy prior to closing.

Closing/Settlement Costs (2% - 3% of the amount financed)

• Closing/Settlement Costs are misc. fees charged by those involved with the home sale.
• Once you apply for a loan, your lender must give you a Good Faith Estimate of these costs.
• Closing/Settlement Costs are explained further in section 7a) Closing/Settlement Costs.

Yes!

• There are some differences between states.
• We have addressed these distinctions at the appropriate times in the process.

What are some of these differences?

• Official Documents - All documents generated by LawDepot.com are state-specific
• Closing/Settlement - Certain regional distinctions have been noted

• Your ability to receive a loan is dependent upon your Credit Score
• Your Interest Rate for your Mortgage is dependent on your credit score

• Ensure that all details of your Credit Reports are accurate
• Correct any inaccuracies
• Make any missed payments
• Determine your FICO score

This is actually 2 questions, and every "expert" will give you a different answer:

• How high does my credit score need to be to qualify for a mortgage loan?
• How high does my credit score need to be to get the best interest rates?

We will answer these 2 questions with 4 more questions:

• Is 700 considered a good credit score in the current economy?   Yes
• Is there room for improvement?   Yes
• Will you qualify for the best mortgage rates with a 700 credit score?   Probably not
• Will any of this change six months or a year from now?   Probably

The amounts below are estimates based on a typical home purchase.

Down Payment (0% - 30% of the purchase price)

• Down payment amount will vary depending on the lender, property, & loan type.
• Typically, a down payment is from 5% - 30% of the purchase price of the home. 
• Certain loans do not require a down payment.
• Loan types are discussed further in block 2) My Loan.

Earnest Money (1% - 3% of the purchase price)

• Earnest Money is a "good faith" payment to show you are serious about buying the home.
• Typically, you're required to pay earnest money within 48 hours of the contract being signed.

Home Inspection ($250 - $500)

• Home Inspections are not always required but highly recommended.
• Once the contract is signed, you'll have an Inspection Contingency Period to have an inspection done.
• During the contingency period, you can still back out of the contract if you find a problem with the home.

Appraisal ($250 - $500) 

• As a part of underwriting, your lender will order an Appraisal to verify the home's value. 
• Appraisal fee is usually paid to the lender before closing/settlement (Paid Outside of Closing).

Homeowner's Insurance (.03% of the purchase price)

• You must purchse your first year’s Homeowner's Insurance policy prior to closing.

Closing/Settlement Costs (2% - 3% of the amount financed)

• Closing/Settlement Costs are misc. fees charged by those involved with the home sale.
• Once you apply for a loan, your lender must give you a Good Faith Estimate of these costs.
• Closing/Settlement Costs are explained further in section 7a) Closing/Settlement Costs.

Rather than paying cash, you may be able to add the closing/settlement cost amount to your loan.

To qualify for this:

• Your lender must approve you for the new total loan amount (original amount+closing costs)
• The new total loan amount can't exceed the Loan-to-Value ratio (LTV)
• Ask your lender if this is an option for you

Once you buy a home, your monthly payments will include some or all of the following:

• Mortgage Payment
• Property Taxes
• Homeowner's Insurance
• Private Mortgage Insurance (PMI) (conventional loans)
• Mortgage Insurance Premium (MIP) (FHA loans)

If you escrow:

• If you decide to Escrow, you'll make 1 payment (usually monthly) into your Escrow Account.
• This payment will be included with your mortgage payment to your lender.  
• The lender will pay the taxes & insurance for you out of your escrow account .

If you DO NOT escrow:

You will normally pay:

• Mortgage Payment               to your lender monthly
• Property Taxes                     to your county tax office yearly
• Homeowner's Insurance      to your insurance company yearly or as specified
• PMI (if required)                     to your lender monthly 
• MIP (if required)                     to your lender monthly 

Advantages

• Lender assumes responsibility for paying your property taxes and homeowner's insurance 
• Don't have to worry about paying taxes & insurance separate from your mortgage payment
• No large tax or insurance bill at the end of the year (or whenever your insurance payment is due)

Disadvantages

• Lender keeps the interest on your account in most states
• Some lenders will raise your interest rate or charge a penalty fee if you do not escrow

• You will need to decide whether or not to be on escrow before your closing date.
• Be sure to notify both the Closing/Settlement Agent & your lender of your decision.
• This will be addressed in section 5d) Escrow, Taxes & Insurance.

HUD's website provides the following resources and information:

• Housing Counseling Agency contact information
• Homebuying Assistance Programs information
• Home Repair Assistance Programs information
• Homeownership Voucher Programs information
• HUD Home listings
• Information on buying and maintaining your home
• Predatory Lending information
• Information on avoiding Foreclosure
• Energy efficiency information
• Additional resources

• Essentially, a Mortgage is just a loan for a home
• Technically, a mortgage is a loan secured by real property through a mortgage note
• For most, a mortgage is the largest and most serious financial obligation we'll ever make
• All mortgages are categorized as Government Loan or Conventional Loan

---

Here are some examples of mortgage types:

• FHA Loan (Government)
• VA Loan (Government)
• RHS Loan (Government)
• Reverse Mortgage (Government)
• All the Rest (Conventional)

All loans - government or conventional - have an Interest Rate that falls into a subcategory.

Some common examples of interest rate subcategories are:

• Fixed Rate
• Adjustable Rate (ARM)

Interest Rate National Average Widget coming soon...

• Interest Rate
• Discount Points
• Origination Points
• Private Mortgage Insurance (PMI) (conventional loans) 
• Mortgage Insurance Premium (MIP) (FHA loans)
• *Mortgage Packages*

It is difficult (and unnecessary) to fully understand all mortgages.

Once you choose a lender (section 2c) they can:

• Answer any questions you have about mortgages
• Discuss the details of the specific mortgages they offer

---

To learn more general information about mortgages, visit one or more of these links:

MortgageX
HUD

It really doesn't matter.

The goal is to attain the best possible interest rate and lowest fees.

---

However, if you are interested, the following are some types of mortgage lenders:

• Mortgage Bankers
• Mortgage Brokers
• Loan Officers
• Direct Mortgage Lenders
• Financial Institutions

Pre-qualification

• Not mandatory
• Free
• Complete over the phone or internet
• Lender examines your financial information
• No credit analysis
• Lender gives you an estimate of how much you can afford to borrow
• Not a guarantee

Pre-approval

• Usually required by lender
• Must complete a mortgage application
• May include an application fee                            *$ Application Fee Estimate $*
• Credit is checked
• May be able to lock in an interest rate
• Lender gives you conditional approval in writing for the max loan amount you qualify for

Remember:

Getting pre-approved for a certain amount doesn't necessarily mean you can afford that much.

Yes!

• You can apply for pre-approval with as many lenders as you wish
• However, each pre-approval may have an application fee

If the agent is a Realtor, please complete this ethics complaint and send it to their Broker:

Ethics Complaint

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Additionally, please tell your story in our Agent Tales section by clicking here:

Agent Tales

You have no obligation to any agent unless:

• You sign a Representation Contract
• You sign purchase contract specifying an agent's commission

• Some real estate agents have their own standard contracts they prefer to use.
• It is ok if you decide to use their contract, but you should have it reviewed by your attorney.
• If you insist on using your own contract & the agent says no, file a complaint.

---

If the agent is a Realtor, please complete this ethics complaint and send it to their Broker:

Ethics Complaint

---

Additionally, please tell your story in our Agent Tales section by clicking here:

Agent Tales

If the seller's counter-offer is too high, specify a lower purchase price on your counter-offer.

---

Do not offer more than the maximum price you've set for yourself!

Max Price: $!maxpurchase!

As the saying goes - "Everything is Negotiable".
Other items can help offset your total cost if the seller isn't willing to lower their price.

---

The following items are commonly negotiated and can be included in your counter-offer:

• Closing/Settlement Costs (ex: Request that the seller pay some or all of your costs)
• Lenders Title Insurance (ex: Request that the seller pay for the policy)
• Appliances (ex: Request that the seller include the washer & dryer in the sale)

Technically, you can ask for anything. 
However, there are many repair requests the seller will probably not agree to.

---

Requesting any of the following repairs is almost always considered reasonable:

• Termite or carpenter ant infestation
• Electrical issues
• Old pipe fittings
• Active water leaks
• Heating ventilation problems 
• Radon readings over 4.0 pc/l.
• Mold
• Asbestos

Once they've received all documents, your lender will begin the Underwriting process.

Underwriting will include some or all of the following:

• Financial analysis of the buyer (credit check, debt-to-income ratio, etc)
• Drive-By-Appraisal or Full-Appraisal of the property
• Title analysis & report

To help you decide, here are some pros and cons of using a moving company:

Pros

• Probably quicker
• Less work for you and your friends/family  
• Most moving companies are bonded (if they break your stuff, you will be reimbursed)

Cons

• Higher cost             Movers $ estimate
• Chance of theft by fraudulent movers

Disconnect old:

• Schedule your utility services to be disconnected at least one day after you move out
• This gives you an extra day of light, a/c, water, & sewage just in case.
• If you are switching companies and you made a deposit, request your refund.

Connect new:

• Schedule connection for at least 1 day before moving into your new home
• This will ensure that you have light, a/c, water, & sewage when moving in 

You will need to ensure disconnection/connection of the following utilities:

• Electricity
• Water
• Wastewater
• Sewage

• Currently, 23 states have Deregulated electricity markets
• 23 states also have deregulated natural gas markets
• For specific information, visit your state's Public Utilities Commission website

• If you're unsatisfied with your current provider(s), now's a good time to change.
• If you're satisfied with your current provider(s), you'll need to transfer your service.
• Remember, you can use separate providers for each service or take advantage of bundles.

	Digital Cable	Satellite	Fiber Optic
Availability	Available almost everywhere; Provider choices limited	Almost everywhere	Limited
Programming	Can support over 300 channels; More local channels than Sat or FO;	Can support over 250 channels	Can support over 300 channels
Monthly Cost	Normally higher than Sat or FO	Normally lower than cable	Normally lower than cable
TV/Internet/Phone packages available	Yes	Yes	Yes
Equipment / Installation Cost	Normally low; Dependent upon provider & installer	Normally high, unless you commit to a 12-month contract	Normally low or free; Normally no contract required
Equipment Required	Cable box (receiver) for each tv; Coaxial cable	Satellite dish; Receiver box for each tv; Coaxial cable	Neighborhood Fiber Optic cables required; Coaxial cable in home
Requires professional installation?	Yes	Yes	Yes
Signal may degrade or be lost in bad weather?	Not usually	Yes	Not usually
HDTV available?	Yes	Yes	Yes
On-Demand available?	Yes	Limited	Yes

Satellite
Direct TV
Dish Network

Fiber Optic
AT&T U-Verse
Verizon FiOS

Cable   (Most regions are only covered by 1 or 2 companies)
Advanced Cable Communications
Alameda Power and Telecom
Allegiance Communications
Armstrong Group of Companies 

Astound Broadband 

Bend Broadband
Bermuda Cablevision
Blue Ridge Communications
Bresnan Communications
Bright House Networks
Broadstripe (Millenium Digital Media)
Buckey Cable System/Cablevision
Cable One
Cablevision
Charter Communications
Choice Cable TV
Coast Communications
Comcast
CommuniComm Services
Cox Communications
Crestview Cable 
Fairpoint Communications
Full Channel
General Communications
Graceba Total Communications
Hometown Cable
Insight Communications
Jet Broadband
Kuhn Communications
Liberty Cablevision
Massillon Cable TV
Mediacom
MetroCast Cablevision
Midcontinent Communications
Midtel Cable TV
Muscatine Power and Water
Nelson Cable
Northland Cable Television 
Qwest Communications
RCN Corporation
Seaport Capital
Service Electric
SuddenLink 
Tele-Media Corporation
Time Warner Cable
Trinity Cable
Truvista Communications
US Cable
Viacom
WB Cable
Windstream (Lexcom)
WOW! Internet Cable Phone
Wyandotte Municipal Services

• Contact the Closing/Settlement Agent 24 hours before Closing/Settlement
• Request to pick the HUD-1 up or have them email or fax it to you.

Closing/Settlement Costs vary based on the following factors:

• Lender
• Mortgage Type
• Purchase Agreement
• Location

However, closing/settlement costs usually include the following:

• Lender Fees
• Third Party Fees
• Paid Outside of Closing (POC)

• This decision should have already been made earlier in the process
• If you have not yet decided, return to section 5d) Escrow, Taxes, Insurance

Assuming all goes smoothly, Closing/Settlement should take 1-2 hours

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States in the western half of the US

• Referred to as "closing"
• Closing usually occurs in Escrow
• Both parties need not be present at the same time
• Closing agent holds the money and the signed deed, and arranges for the transfer

States in the eastern half of the US

• Referred to as "settlement" 
• All parties involved meet at a settlement company at the same time.
• Presided over or supervised by a lawyer or settlement agent. 
• Settlement agent disburses all funds listed on the settlement statement

---

Pay Closing/Settlement Costs

• You and the seller will both pay Closing/Settlement Costs
• Your closing/settlement costs are explained further in section 7a) Closing/Settlement Costs

Sign Documents

• You will initial and sign many documents.
• These documents are explained further below

Results

• Terms of the agreement between you and your mortgage lender are confirmed 
• Your loan goes into effect and you receive your mortgage 
• The sales contract agreements are confirmed 
• Ownership of the home is transferred

This can vary.  Here is a general idea:

You  - You definitely need to be there.
Closing/Settlement Agent - The closing/settlement agent will be there to conduct the event.
Seller - The seller may be present.  However, they may sign their paperwork at a separate time.
Real Estate Agents - If someone has an agent, they should be there but are not required to be.
Lender Representative - A representative of the lender may or may not attend.
Attorneys - Certain states require that an attorney be present. The closing/settlement company will provide the attorney.
 

All or many of the following documents will be reviewed and signed at closing/settlement.
Most of these documents will be generated by the closing/settlement agent.

HUD-1 Settlement Statement                       HUD-1 example
Truth-in-Lending Disclosure Statement       Truth-in-Lending example
Mortgage Note                                               Mortgage Note example
Deed of Trust                                                 Deed-of-Trust example

• Contact the closing/settlement agent 24 hours before closing/settlement
• Request to pick the HUD-1 up or have them email or fax it to you.