Buyer Commitment 2
Your Path to Homeownership 3
DON‘Ts of Financing Process 4
Lender Basics 5
Lender Scorecard 7
Mortgage Process 8
What Happens Next 10
Home Inspection 11
Home Buyer‘s Real Estate Glossary 13
Moving Checklist 17
Mark Rucco, founder of The Rucco
Group, is the top agent in Palm Beach
County for closed transactions. As a top
negotiator with thousands of homes sold
in Palm Beach County, he offers extensive
experience and local knowledge. With an
administrative team of specialists in place
to handle every aspect of the transaction,
Mark’s clients have come to expect
extraordinary service. A large percentage
of his business comes from repeat clients
and referrals because for over 20 years
he has built a reputation for expertise,
dedication and results.
To save your time, minimize your stress, provide maximum security and help
assure you get the best home for your money, I will perform the following
services for you the home buyer:
Provide a complete Provide thorough Assist you in selecting
explanation of the knowledge of the the best home for you
home buying process current and emerging and/or your money
real estate market
Write your purchase Submit your purchase Review of all
agreement to correctly agreement in a manner offers in detail,
and clearly express that will present you in provide negotiation
your intentions and the most favorable representation of
represent your interests position your interests
Provide assistance Coordinate the closing Provide post-sale
in obtaining the best of your purchase with follow-up to assure
possible financing other realtors, lenders, your total satisfaction
of your next home inspectors, appraisers,
attorneys, escrow officers
and title insurance
It may matter more who personally represents your interests when
buying a home than which home you may attempt to purchase. If
you try to buy the right home through the wrong agent, you may
not get the home you want, or you may have an unsatisfactory
home buying experience.
! You can’t get the personal service from me unless I am the agent
you select to represent your interest in the purchase of your home.
YOUR PATH TO HOMEOWNERSHIP
We prequalify you Your mortgage advisor Work with your realtor Did you know that
and review your credit requests all items from to find your perfect government loans are
report to ensure we are you and prepare files home. not just for first-time
as accurate and helpful for mortgage loan pre- homebuyers and offer
as possible. approval. a lower down payment
option? Ask us about it!
An inspector will The processor receives Meet with your A signed sales
inspect the property and reviews documents. mortgage advisor to contract between
for structural, electrical Appraisal title, insurance, complete and sign you and the seller is
and plumbing issues. tax certificates and your loan application, provided to the title
verifications are ordered. initial disclosures and company and our
You need to order home intent to proceed. team.
Upon receipt of your The processor turns The underwriter LOAN
inspection report and in the completed file provides a list of closing APPROVAL
decision to move to review, to meet conditions to us and
forward, our team will investor requirements. to the processor. We
order an appraisal to This usually takes 48- arrange for collection
determine the value of 72 hours. of closing conditions
the home. from all parties.
The title company Borrowers do a final Typically one day The initial closing
compiles all paperwork walk-through of the before signing. disclosure (CD) must be
and draws up property to approve reviewed and received
documents to be the home‘s condition by the borrower at least
signed by all parties. prior to signing 3 business days before
closing document. signing. (REFIs are a
Both you and the Homeownership The title company
seller will be required to allows the freedom requests funding
sign final loan documents to create your custom and recording from
and provide any home and also offers the lender. Once that‘s
outstanding documents tax benefits and equity. complete, you take
requested by the closing posession!
TO BE SUCCESSFUL IN YOUR HOME
FINANCING PROCESS, MAKE SURE YOU
Originate new Spend money you
credit inquiries need for closing
Finance new Co-sign a loan
furniture for anyone
Buy a vehicle Change bank
Quit jobs, change
jobs, or become Add more debt to
self-employed credit cards or let
Frequently Asked Questions
What’s the difference between pre- Pre-qualification is a simple process. The
qualification and pre-approval? buyer is asked specific questions about
their income, assets and liabilities. Based
on this information, they are provided with
an amount for which they may qualify. This
process can be done strictly on a verbal
level or electronically over the Internet.
On the other hand, a pre-
approved buyer is one who
is actually approved for a loan
of a certain amount. The pre-
approved process is much
more involved. The borrower
will provide proof of income,
assets and liabilities and this
information will be verified by
the lender. Because of this
buyers are much more
attractive to sellers than
What risks do lenders evaluate? There are four things that a lender would
require from a borrower:
Why do credit scores vary? And what
do lenders like? Down Payment Job History
Statistics have proven
that borrowers who Long term
put down 10% or employment is a
more are unlikely to good predictor that
default on a loan. a borrower will have
a steady stream of
Excellent Debt to income, which will
Income Ratios not be interrupted
Borrowers with by a career change
high debt and low or termination.
income are a high
risk because they are Excellent Credit
using too much of
their income to pay A credit score tells
their current debt an underwriter a
(e.g. credit card debt, great deal about a
car loans and so on). borrower. Lenders
We describe a person take a close look at
with high debt and FICO scores. FICO
low income as having stands for Fair Isaac
a high DTI (debt to Credit Organization,
income ratio). the organization
that developed the
formulas used by
credit bureaus to
Go to www.myfico.com to learn more.
The three major credit bureaus are:
Experian, Equifax, and TransUnion.
Credit scores will vary from bureau to
bureau because each bureau puts different
emphasis on different factors; these factors
include delinquencies, too many credit
cards, balances that are too high, too many
recent credit inquiries, tax liens, judgments,
bankruptcies, length of credit history and
How the credit scores are calculated
Credit scores are calculated using a scorecard that allocates points for each of
the above factors; however, lenders do not get to see the entire scorecard, all
they see are the final scores. FICO scores can range from 300 to 850. Here’s
how lenders typically react to FICO scores:
560-600 620-680 700-720
Lenders will not Lenders will Lenders will do a
consider extending thoroughly evaluate basic evaluation –
a conventional loan, the borrower. Loans this loans process
but they thoroughly to borrowers with faster and don’t have
evaluate the borrower credit scores in this as much paperwork.
and may have other range will take longer
types of loans that to process.
meet his or her needs.
What you‘ll need to qualify in
Down Income Impartial
Payment Verification, Third-Party
Credit History, Appraisal
Generally between Your lender needs this
5-20% of the purchase to verify the value of
price (many buyers are the house you want
putting down 10% or to purchase.
less - with some putting
down as little as 3%).
You will interact with various prefessionals during the
homebuying process all of whom are valuable resources
and perform necessary roles.
Steps to take
FIND OUT START CONTACT
Find out your current Start gathering all of your Contact a professional
credit history & score. documentation: Income to help you to develop
Even if you don‘t have Verification (W-2 forms a spending plan and
perfect credit, you may tax returns employment), determine how much
already qualify for a loan. Credit history & Assets you can afford.
(such as bank statements
to verify your savings).
CONSULT TALK RESEARCH
Consult with your lender Talk to your lender about Do your research, reach
to review your income, applying for a mortgage out to the professionals,
expenses and financial and getting a pre – stick to your budget and
goals to determine approval letter. This letter be sure you are ready
the type and amout of provides an estimate of to take on the financial
mortgage you qualify for. what you might be able responsibilities of being
to borrow (provided your a homeowner.
financial status does not
change) and demonstrates
to home sellers that you
are a serious buyer.
WHAT HAPPENS NEXT?
Now that you have decided to buy your home, what happens between now and the
time you legally own the home? A Title Company may handle the following items.
NOTE: In different parts of the country, attorneys, lenders, escrow companies and
other persons who are independent of title companies, perform some or all of these
EARNEST MONEY TAX CHECK TITLE SEARCH
An agreement to convey What taxes are owed Copies of documents are
starts the process once on the property? The Title gathered from various
it is received at the Title Company contacts the public records: deeds, deeds
Company. Once you various assessor-collectors. of trust, various assessments
submit the loan application, and matters of probate,
it is usually subject to a heirship, divorce and
credit check, an appraisal bankruptcy are addressed.
and (sometimes) a survey Does your attorney perform
of the property. a permit search?
EXAMINATION DOCUMENT SETTLEMENT
Verification of legal PREPARATION
owner and debts owed. An Escrow Officer oversees
Appropriate forms are the closing of the transaction:
TITLE INSURANCE prepared for conveyance and seller signs the deed, you
settlement. sign a new mortgage, the
a Coverage that protects old loan is paid off and the
the lender for the amount new loan is established. Title
of the mortgage. insurance policies will then
be issued to you and your
b Coverage that protects lender.
the equity in the property.
Both you and your lender will but rightful heir to the
want the security offered by
title insurance. Why? property shows up after the
Title agents search public sale to claim ownership;
records to determine who
has owned any piece of conflicts arise over a will
property, but these records
may not reflect irregularities from a deceased owner; or
that are almost impossible
to find. Here are some a land survey showing the
examples: an unauthorized
seller forges the deed to boundaries of your property
the property; an unknown,
is incorrect. For a one-time
charge at closing, title
insurance will safeguard you
against problems including
those events an exhaustive
search will not reveal.
If you are purchasing a resale property, we highly recommend that you have a
professional home inspector conduct a thorough inspection. The inspection will
include the following:
Appliances Plumbing Electrical Air conditioning
Ventilation Roof and Foundation General
The inspection is not designed aware of repairs that are
to criticize every minor problem recommended or necessary.
or defect in the home. It is
intended to report on major The seller may be willing to
damage or serious problems negotiate completion of repairs
that require repair. Should or credit for completion of
serious problems be indicated, repairs, or you may decide
the inspector will recommend that the home will take too
that a structural engineer or much work and money. A
other professional inspect it professional inspection will
as well. help you become aware of the
repairs that are recommended
Your home cannot “pass or or necessary.
fail” an inspection, and your
inspector will not tell you In choosing a home inspector,
whether he/she thinks the consider one that has been
home is worth the money you certified as a qualified and
are offering. The inspector’s experienced member by a
job is to make you become trade association.
I recommend being present at the inspection. This
is to your advantage. You will be able to clearly
understand the inspection report, and know exactly
which areas need attention.
Plus, you can get answers to many questions, tips for
maintenance, and a lot of general information that
will help you once you move into your new home.
Most important, you will see the home through the
eyes of an objective third party.
real estate glossary
Acceptance The date when both parties, seller and buyer, have
Adjustable Rate Mortgage agreed to and completed signing and/or initialing
Appraisal A mortgage that permits the lender to adjust the
mortgage’s interest rate periodically on the basis
Appreciation of changes in a specified index. Interest rates may
Assumable Mortgage move up or down, as market conditions change.
Bill of Sale A loan that is paid in equal installments during its
Cloud on Title term.
Deed An estimate of real estate value, usually issued
Discount Points to standards of FHA, VA and FHMA. Recent
comparable sales in the neighborhood is the most
13 important factor in determining value.
An increase in the value of a property due to
changes in market conditions or other causes.
The opposite of depreciation.
Purchaser takes ownership to real estate
encumbered by an existing mortgage and asumes
responsibility as the guarantor for the unpaid
balance of the mortgage.
Document used to transfer title (ownership) of
Any condition that affects the clear title to real
Anything of value to induce another to enter into a
contract, i.e. money, services, a promise.
A written instrument, which when property
executed and delivered, conveys, title to real
A loan fee charged by a lender of FHA, VA or
conventional loans to increase the yield on the
investment. One point = 1% of the loan amount.
real estate glossary
Easement The right to use the land of another.
Equity Anything that burdens (limits) the title to property,
Escrow Payment such as a lien, easement, or restriction of any kind.
The value of real estate over and above the lien
Federal Housing Administration (FHA) against it. It is obtained by subtracting the
total liens from the value.
FHA Insured Mortgage
Fixed Rate Mortgage That portion of a mortgagor’s monthly payment
Foreclosure held in trust by the lender to pay for taxes, hazard
Freddie Mac insurance and other items as they become due.
Nickname for Federal National Mortgage
Corporation (FNMA), a tax-paying corporation
created by congress to support the secondary
mortgages insured by FHA or guaranteed by VA,
as well as conventional loans.
An agency of the U.S. Department of housing and
Urban Development (HUD). Its main activity is
the insuring of residential mortgage loans made
by private lenders. The FHA sets standards for
construction and underwriting but does not lend
money or plan or construct housing.
A mortgage under which the Federal Housing
Administration insures loans made, according to
A loan that fixes the interest rate at a prescribed
rate for the duration of the loan.
Procedure whereby property pledged as security
for a debt is sold to pay the debt in the event of
Nickname for Federal Home Loan Mortgage
Corporation (FHLMC), a federally controlled and
operated corporation to support the secondary
mortgage market. It purchases and sells residential
conventional home mortgages.
real estate glossary
Graduated Payment Mortgage Any loan where the borrower pays a portion of the
interest due each month during the first few years
Lease Purchase Agreement of the loan. The payment increase gradually during
the first few years to the amount necessary to fully
Lease with Option amortize the loan during its life.
Loan to Value Ratio (LTV) Buyer makes a deposit for future purchase of a
property with the right to lease property in the
Premium (MIP) A contract, which gives one the right to lease
property at a certain sum with the option to
Note purchase at a future date.
The ratio of the mortgage loan principal (amount
Private Mortgage Insurance (PMI) borrowed) to the property’s appraised value
Second Mortgage / (selling price). Example: on a $100,000 home, with
Second Deed of Trust / mortgage loan principal of $80,000 the loan to
Junior Mortgage / Junior Lien value ratio is 80%.
15 A legal document that pledges a property to the
lender as security for payment of a debt.
The amount paid by a mortgagor for mortgage
insurance. This insurance protects the investor from
possible loss in the event of a borrower’s default on
A written promise to pay a certain amount of money.
A fee paid to a lender for services provided when
granting a loan, usually a percentage of the face
amount of the loan.
See Mortgage Insurance Premium.
An additional loan imposed on a property with
a first mortgage. Generally, a higher interest
rate and shorter term than a “first” mortgage.
real estate glossary
Settlement Statement (HUD-1) A financial statement rendered to the buyer and
Severalty Ownership seller at the time of transfer of ownership, giving
Tenancy In Common an account of all funds received or expanded.
Title Insurance Ownership by one person only. Sole ownership.
Ownership by two or more persons who hold an
undivided interest without right of survivorship.
(In event of the death of one owner, his/her
share will pass to his/her heirs).
An insurance policy that protects the insured
(buyer or lender) against loss arising from
defects in the title.
CHANGE OF ADDRESS SERVICES TO CANCEL ORGANIZE
U.S. POSTAL SEIRVICE KEEP PERSONAL & FINANCIAL
DRIVERS LICENSE CABLE DOCUMENTS IN ONE BOX
INTERNAL REVENUE (IRS) INTERNET
SOCIAL SECURITY PHONE / CELL Checkbook, passports, birth certificates,
VOTERS REGISTRATION ELECTRIC
BANKS GAS insurance docs, taxes.
INVESTMENTS SEWER UPDATE MEDICAL RECORDS
CREDIT CARDS TRASH
STORE CREDIT CARDS LANDSCAPING NOTIFY OLD AND NEW
PAYPAL HOUSE CLEANING SCHOOLS AND ARRANGE
AUTOMATED PAYMENTS PEST CONTROL TRANSFER
PLACE OF EMPLOYEMNT
INSURANCE KEEP KEYS, GARAGE OPENERS
DOCTORS IN BAG FOR NEW OWNERS
FRIENDS & FAMILY KEEP A FOLDER WITH
SUBSCRIPTIONS WARRANTIES & MANUALS
ASSOCIATIONS FOR NEW OWNERS
PLAN MEALS TO USE UP THE
FOOD YOU HAVE LEFT
SAVE MOVING RECEIPTS
Possible tax deduction
PACKING & STORAGE MOVING DAY
PURGED UNUSED ITEMS ARRANGE HELP FOR KIDS OR
PETS FOR THE DAY
RESERVE TRUCK HAVE CASH TO TIP MOVERS
OR MOVERS FINAL CLEANING
RESERVE STORAGE DISPOSE OF TRASH
IF NEEDED RUN GARBAGE DISPOSAL
FINAL WALK THROUGH
PACK INFREQUENTLY USED
ITEMS AHEAD OF TIME
START A "FAMILY MOVE
KIT" FOR THE FIRST NIGHT
IN YOUR NEW HOME
RAISE / LOWER THERMOSTAT
Depending on the weather
TURN OFF WATER & HEATER
LOCK ALL DOORS & WINDOWS
The right agent
every step of the way.