First Time Buyer

	First Time Buyer

		The purchase of real estate is probably one of the largest and first purchases you will make. We will try to acquaint you with the process of purchasing real estate. There are advantages and disadvantages of owning property. As an investment, it probably appreciate over time (but there are no guarantees) and there are tax deductions you may take. However, you are also responsible for maintaining the property. You will make an offer on the property you wish to purchase by presenting a contract to purchase to the seller along with an earnest money check, typically about 5% of the cost of the property. The contract (or offer) will be contingent on a number of things, such as financing, property inspection, etc. The Oklahoma State Real Estate Commission has developed a standardized residential Real Estate Purchase Contract.
	Challenges to Ownership of Real Estate Down Payment - Lenders generally require a down payment, the amount of which depends on the type of loan and the type of structure. Conventional loans typically require 80% down, loans obtained with government assistance may require as little as 3% down. The size of the down payment may impact the amount of money you can borrow. You may be asked to prove that money set aside for down payment is legitimate savings and not obtained through another loan or gift. Closing Costs - Certain costs of purchasing real estate must be paid before the purchase transaction is completed. Examples of these costs include survey, attorney's fees, title search, pre-paid tax and insurance payments. These closing costs may vary, but will typically run from 3% to 6% of mortgage amount. (See Closing Cost Section on this Page) Moving-In Costs - There will be costs associated with moving into the new facility. Depending on the condition, there may be significant costs associated with painting, re-carpeting, etc. Debt-to-Income Ratio - Income is a primary factor in determining how much can be borrowed. The home mortgage rule-of-thumb states: you can afford a house that costs up to 2.5 time your annual pretax gross income. Credit History - Lenders would prefer you have a solid record of borrowing money and baying it back on time. The type of loan and interest rate may be influenced by your credit score as calculated by one of the three credit reporting agencies. Click Here: for more information on Credit Reporting.
		List of Items Needed for a Loan Application Address(es) for the past two years Names and addresses for landlords for the past two years Income determination; all documentation is for the past two years, including copies of complete federal income tax returns, signed and dated If salaried employee, copies of W-2 forms and copies of the most recent pay stubs covering a full one-month period If self-employed, financial statements and profits & loss statements, signed and dated. (Three years tax returns for Bond loans.) If any income is derived from rents, royalties, commissions, real estate, interest, or dividend, provide income and expense statements, copies of lease agreements if applicable Bank and Credit determination Names, addresses, account numbers and balances for all depository institutions All sources of down payments and closing costs Two months bank statements on all depository accounts Debt Determination Names, addresses and loan numbers for all mortgages held for the past two years Account numbers, balances and minimum required payment amounts of all credit and other charge cards with copies of statements Account numbers, balances and payment amounts of all outstanding loans, including names and addresses of creditors (including automobile leases, deferred as well as active student loan, and single payment loans) Copies of all bankruptcy papers if there has been a bankruptcy during the past seven years Copy of recorded divorce decree and copies of the last 12 canceled alimony and/or child support checks if this income is to be used for loan qualifying purposes Asset Determination List of all real estate owned, including value, rental income, outstanding mortgages (loan number, balances, payments, mortgage holders' name and address), and other expenses not included in mortgage payments such as taxes and insurance Copies of real estate contracts on any real estate pending sale; copies of settlement statements on all real estate sold within the past year. List of all other assets and approximate values, such as stocks, bonds, life insurance, automobiles, furniture and other personal property Refinances Only: Copies of recorded deed and settlement statement, homeowners' insurance, tax and escrow analysis information, original note and mortgage
	Do's and Don'ts For Borrowers During Processing Make sure you: *Do Not* Quit your job or get another unless it is in the same line of work and for equal or more money, please call if this happens Allow anyone to may inquiry on your credit report Apply for credit anywhere or complete any other credit application Change bank accounts or transfer money within your existing accounts Co-sign for anyone, for any reason, for anything Purchase a new car, truck, boat or furniture Purchase any other real estate Charge any additional debt on any current line of credit or credit card Start any home improvements until the loan is closed Do Not Shop on the Internet - may lower your credit score Make sure you: DO Keep all accounts current -- mortgages, auto, credit cards, etc. Make payments on all loans or accounts on or before due dates, even if they are to be paid off with the proceeds of the loan. Complete any home improvements currently in progress, prior to your loan approval Do Call at Anytime a Question may Arise
		Closing Costs Some Closing costs are customarily paid by seller and others by buyer, and will typically amount to between 3% and 6% of mortgage. Closing costs are typically additional out of pocket cash costs paid at closing that are not part of the mortgage. While the Oklahoma Real Estate Commission's Standard Residential Contract designates some costs as buyer's costs and others as seller's costs, who pays what is negotiable. However, VA, FHA, Loan Consolidators such as Freddie Mac, and other government sponsored loan guarantee programs may specify limits to the costs that may be paid by sellers and buyers. The Standard Oklahoma Residential Contracts specifies Seller to pay: Bringing Abstract Up to Date Taxes and Assessments prorated during the year Termite Inspection Repairing defective or broken (not cosmetic) items that are part of the structure Mortgage Inspection Certificate (simplified, primarily visual, quasi- survey) Documentary Stamps Credit Report The standard Oklahoma Residential Contract specifies the Buyer to pay: Bond, Tax servicing, & VA fees Underwriting fee Appraisal Flood Inspection Certificate (if required) Property Inspections, including well and septic tank if on the property Survey (if pin survey or equivalent is required by the mortgage company) Fees and other expenses of the mortgage company including mortgage insurance Prepaid taxes and insurance as required by the mortgage company Title Insurance Except for requirements of mortgage company or government programs that pay be providing assistance, who pays what closing costs are negotiable. The Closing Company typically provides abstracting and title insurance. Other closing costs are typically split between buyer and seller 50%/50%. > Top
	Documentary Stamps Oklahoma has what amounts to a transfer tax on the sale of property. The tax is in the form of Documentary Stamps, a conveyance tax levied upon any deed, instruments or other writing conveying real estate sold when the value of the property exceeds $100. The stamp tax attaches to the document, but is not paid until filed with the county clerk. Documentary Stamps are assessed at the rate of seventy five cents ($0.75) per each $500 increments. The standard real estate contract calls for the seller to pay for the stamps, but this is negotiable. If there is insufficient documentary stamps attached to the conveyance document, the buyer is responsible for the difference.