Frequently Asked Questions for Buyers

Name and address of all employers for the past two years.
Position and length of time on each job.
Current rate of base earnings and average of overtime, commissions and bonuses.
Copies of forms W-2 for the last two years.
Copy of most recent pay stub, showing year-to-date income.
If self-employed, federal income tax returns for the last two years and an income statement for the current year to date.
If you choose to include child support or alimony as income, documentation evidencing receipt of that income for the last six months and a copy of the recorded separation agreement and divorce decree.
Evidence that other income (Social Security, pension, rentals, dividends or interest for example) is received consistently.

Obligations

Name and address of creditor on all open accounts.
Account number of each account.
Current balance of each account.
Monthly payment on each account.
If you are making child support or alimony payments, a copy of the recorded separation agreement and divorce decree.

Assets

Copy of most recent statement for each bank and brokerage account.
Documentation for any other source of funds to be used for down your payment or closing costs.

You will also need to provide your Social Security number and pay an application fee. I will send a copy of the sales contract to the loan originator.

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Q: How much insurance do I need?

A: Your lender will require hazard insurance coverage for at least the mortgage amount (even though the value of the land is not insurable). Of course you may want to add riders to your homeowners policy for jewelry, art, computers, etc. Your lender will also require title insurance to protect the lender in the event that some defect in the title is discovered after closing. In Central Ohio it is customary for most of the title insurance premium to be paid by the seller. The buyer will ordinarily pay a small fee for the lender's coverage and will usually pay another small fee to extend the coverage to the buyer. If you use FHA financing, you will pay a mortgage insurance premium as part of your monthly payment. This insurance protects the lender in the event that you default on payments on the loan. For conventional loans the lender determines at what point you must pay private mortgage insurance (PMI). Usually lenders do not require PMI if your first mortgage is either 85 % loan to value or 80 % loan to value. Because lenders address this issue differently, it's important to discuss PMI with loan originators. After you close on your purchase you will no doubt receive offers in the mail for "mortgage insurance." This type of insurance usually consists of a term life insurance policy with a face amount that decreases over time. The purpose of the policy is to pay off the mortgage loan in the event of the death of the insured. While life insurance coverage for a family's primary earner is frequently advisable, other products may be available that provide better coverage at lower cost. See an insurance agent that sells more than one life insurance product.

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Q: Will I need flood insurance?

A: The lender will determine that based on flood maps prepared by the federal government and the lender's current practices. Flood insurance costs at least as much as hazard insurance, so that can be a deterrent to the purchase of some properties. Most property in Central Ohio does not require flood insurance.

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Q: What are all those initials after your name?

A:ABR stands for Accredited Buyer's Representative. To attain this designation, the real estate practitioner must complete a course in buyer representation, pass a written examination and submit evidence of practical experience as a buyer's representative. GRI, which stands for Graduate, REALTOR(r) Institute, is a nationally recognized professional real estate designation. The GRI designation is considered the nation's number one real estate designation and is earned by successfully completing a rigorous educational program.

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Q: Why do I have to sign an agency disclosure?

A: The Ohio Real Estate Commission requires that an agent present you with an agency disclosure form at the time your home is listed. Signing the form indicates that the various forms of agency have been explained to you and that you understand what form of agency the Realtor will be practicing.

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Q: What forms of agency are there?

A: The State of Ohio recognizes three basic agency relationships:

Seller's Agency: A seller's agent works for the seller and is required to disclose to the seller all material information obtained from the buyer or from any other source.
Buyer's Agency: A buyer's agent works for the buyer and is required to disclose to the buyer all material information obtained from the seller or from any other source.
Disclosed Dual Agency: A dual agent works for both the buyer and seller with the consent of both parties. A dual agent may not disclose any confidential information that would give one party an advantage over the other.

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