Common Contingencies to Be Prepared for When Buying a Home

When you purchase a home, it’s important to make sure you work with an experienced realtor in Alpine, TX so you know exactly what you’re getting yourself into. For example, there are likely to be numerous contingencies you’ll have to deal with during the purchase, which you might not be aware of even if you’re an experienced buyer.

Here are a few examples of some of the most common contract contingencies you’ll need to be aware of when purchasing a new home or property.

The mortgage contingency

Most homebuyers will have to take out a mortgage loan when they purchase a home. The purchase and sale contract includes a mortgage contingency, which indicates the type of financing you’re applying for, the percentage that will be borrowed and the interest rate you’ll receive for the home.

In addition, the contingency will include a date as to when the mortgage commitment will be received, and the required repairs for the property. When the appraiser visits the property, he or she will look for items that must be repaired before the bank will approve the mortgage. The buyer will have a chance as part of this contingency to indicate how much money they would like the seller to be liable for with regard to these repairs—this number will be eligible for negotiation. Common issues include safety issues, like broken windows, foundation problems, missing handrails or other issues that might not be up to code.

Inspection contingencies

There are a variety of inspections that could be included as contingencies in your home purchase. The standard home inspection will be one of these, but other inspection contingencies could include radon inspections, mold inspections, pest inspections, chimney inspections, lead inspections and septic inspections. All of these types of inspections help to identify any potential issues with the home that would need to be resolved before the sale can go through.

Attorney approval

It can be helpful to have attorney representation when going through the home buying process. Some contracts will actually include attorney approval as a contingency. This gives the buyer and seller a chance to have their respective attorneys look over the contract and grant their approval. The real estate agent for the buyer will determine how many days each attorney will have to analyze the contract and grant approval. Attorneys will focus on finding vague areas within the contract that need to be clarified.

Sale and transfer of title contingency

If you already own another home, there’s a chance your contract could include a sale and transfer of title contingency. This shows a seller that you have an existing home that must be sold before you can purchase the property subject to the deal. The agreement often includes a set number of days for you to sell your existing home.

For more information about common contingencies in the home buying process, contact Carpenter Real Estate today to speak with a realtor in Alpine, TX. We look forward to helping you find your ideal home!

Fees You Should Prepare for When Buying a Home

When you’re purchasing a new home, you’re likely focused on costs, such as the price of the home and the interest rate you’ll get on the loan. These are, of course, important factors to take into account, as is the realtor in Alpine, TX that you’ll work with, but there are many more costs you’ll need to consider while you prepare to purchase a home. Some of these fees can be paid up front, while others will get included in your loan. It’s important to consider all of these potential costs so you can get a better sense of the true cost of your home purchase.

Here are some examples of those fees:

  • Private mortgage insurance: If you put less than 20 percent down on your home purchase, you will likely be required to purchase private mortgage insurance (PMI). PMI is provided by a separate private mortgage insurance company to protect a lender against losses in the event you default on the loan. There are two different types of payment you may need to make: monthly PMI premiums and an up-front PMI payment. The up-front premium can either be paid at closing or rolled into the loan.
  • Homeowner’s insurance: You should never attempt to skip out on a homeowner’s insurance policy. This policy will combine your personal liability and hazard insurance to cover your home and everything inside of it. In most cases, you must purchase this policy before you close on the home. You’ll need to pay the first year’s premium in advance, which demonstrates to your lender you have insurance in place before closing.
  • Title insurance: This type of insurance protects the lender if any issues pop up with the title of your home. You’ll be required to purchase this policy for the lender, and its costs will be included in your closing costs or put into the loan. Personal title insurance is optional.
  • Appraisals: You’ll need an appraisal to determine a fair market value for your home. The lender wants to know the home is actually worth the amount of money you’re looking to borrow. This fee will be paid to a lender up front before the appraisal actually happens.
  • Escrow: An escrow account holds your money during the closing process while you finalize an agreement with the seller. You’ll have some of your mortgage payments go into escrow to pay for property taxes and homeowner’s insurance. There are typically some fees associated with this.
  • Origination fees: These are fees paid to the lender for the services involved with creating the loan.
  • Document preparation fees: Your broker or closing attorney will typically charge you fees to cover the preparation of all the documents required for the closing and the loan. These fees will usually be included in closing costs.

There are more fees that will likely apply to your home purchase, so for a full overview of all the fees you can expect to pay, contact Carpenter Real Estate to speak with a realtor in Alpine, TX. We’ll be happy to provide you with additional information.

Should I Get Pre-Approved for a Mortgage Before Looking for a House?

The short answer is definitely, yes, you should. The fact is that with today’s competitive housing market, it’s essential to get pre-approval for your mortgage before you start house hunting.

Many first-time homebuyers are hesitant to get involved in the process because there’s so much paperwork involved. But this is one of those times when, if you snooze, you lose! So it’s essential to get started early on and land that pre-approval for a mortgage so you’ll have it in hand when you find that dream house.

While the world of real estate may seem intimidating, an expert realtor in Alpine, TX can help smooth out the process. Let’s take a look at why getting pre-approval for a mortgage is the ideal first step in the homebuying process:

  • Resolve financial issues: The last thing you want is to find the perfect home for you, only to realize that unresolved financial issues, such as a low credit score, will prevent you from getting a mortgage. Obtaining pre-approval means you’re taking a close look at your finances right away. It’s something you might feel you want to avoid, but if you’re looking to move into a home, you’re going to have to do it at some point. Lenders can help you resolve any financial problems—but they need to know about them first.
  • Narrow the search: Mortgage pre-approval will determine what your price range is going to be. This means that lenders will agree to give you a line of credit on a mortgage up to a certain amount—that’s the top of your price range. Different lenders may give you differing maximum amounts, but this should give you an idea of how much you can feasibly spend.
  • Move fast when you need to: So you’ve found a house that’s in your price range and has everything you’re looking for. Now it’s time to make an offer. But wait—you haven’t gotten pre-approval on a mortgage? That’s going to hold things up. You want to be able to submit an offer and show you have serious interest, which means you need pre-approval.
  • Look for a good deal: Don’t just go to one lender—shop around for the best deal. After all, a home is probably the largest investment you’re ever going to make. It pays to compare the terms lenders are offering and take the deal that best suits your needs.

Are you looking for a trustworthy realtor in Alpine, TX? Then Carpenter Real Estate is the choice for you. We’ve served the region since 1947, selling over 1 million acres of real estate. We’re a family-owned and operated enterprise with plenty of experience in residential property, commercial property and ranches. Over three generations, we’ve built the knowledge base and expertise necessary to navigate all kinds of real estate dealings.

Our roots extend deep into the community because we’re here to stay. We are a member of the Alpine Chamber of Commerce, the Texas Association of Realtors and the National Association of Realtors. Contact us today for a free consultation and to learn more about how we can help you.

What Happens to the Earnest Money If a Buyer Backs Out?

Every real estate transaction requires the buyer to submit an earnest money check at the outset of the sale, along with the signed purchase contract. This money demonstrates good faith on the buyer’s part, and the amount is usually determined by the seller. Its purpose is to provide the seller with some compensation in case the buyer ends up pulling out of the deal for any reason in which the seller is not at fault.

Here’s an overview from a realtor in Alpine, TX of what could happen to earnest money if the buyer backs out of the purchase, as well as situations in which the buyer can retain his or her earnest money.

When canceling the agreement does not result in lost earnest money

All contracts for real estate purchases have deadlines for achieving certain milestones in the transaction process. These deadlines are subject to negotiation on the part of the seller and buyer. While these deadlines can be changed if both parties are willing to do so, there is nothing that says each party must be flexible, so it’s important to set these deadlines at realistic dates from the outset of the transaction.

Each of these deadlines gives the buyer a chance to back out of the contract without losing their earnest money as long as he or she provides appropriate notice of the intent to withdraw from the purchase.

One example is the inspection contingency deadline. The buyer must negotiate a deal that gives them enough time to complete all desired inspections. If, during the inspection, the buyer discovers an aspect of the property he or she simply cannot live with, the buyer will have the option to drop out before that deadline without forfeiting the cash. Note that this only applies before the deadline—if the buyer discovers something else about the house that makes them wary but this discovery occurs after the deadline, the seller will be able to keep the earnest money.

Another big example is the loan contingency deadline—the date by which the buyer must secure financing for the house. If this date passes without word from the buyer, the seller will be able to keep the earnest money, and at this point that money is nonrefundable.

Getting back your earnest money

If you’re the buyer in a real estate transaction and want to back out of the deal, it’s important to know how to get your earnest money back. Depending on the terms of your contract, that money could be held in escrow by a title company, broker, bank or attorney. The buyer should contact that escrow holder, apprise them of the situation and the need to release the money, and then check to see if any specific forms must be signed and submitted to get that earnest money back.

A realtor in Alpine, TX can work with you throughout your real estate transaction to ensure it goes as smoothly as possible. Contact Carpenter Real Estate today to learn more about how we can help.

Should I Get a Sewer Inspection Before Buying Property?

As realtors in Alpine, TX, we often get asked whether one should have a home sewer inspection performed when they purchase a home. The answer to this question is just about always “yes”—it’s an extremely wise move, regardless of the age or condition of the property, simply because it could end up saving you quite a bit of money and headache down the road.

Sewer lines can suffer quite a bit of damage over the years due to pipes shifting and cracking, collapses, worn-out materials or tree roots invading the pipe. Repairing a sewer line that has suffered some level of damage could become extremely costly, so you’re going to want to know about these risks before you purchase the property.

Usually, a sewer inspection will not be included with a regular house inspection. You’ll have to specifically request this as an add-on service if the home inspector provides it, or you’ll need to seek the services of a specialist who handles this type of inspections. The cost will generally be anywhere from $200 to $450 depending on where you live.

About sewer lines

All homes have sewer lines that are buried underneath the ground. These pipes take the wastewater from your sinks, toilets and washing machines away from your home to the treatment plant in your municipality. There are several different types of sewer lines:

  • Cast iron pipes: These types of sewer lines are generally found in older homes and neighborhoods, though they are still sometimes installed in modern houses. They are capable of withstanding more pressure than other pipe materials, but are also susceptible to corrosion. They’ll usually last 30 to 50 years.
  • Clay pipes: These pipes are also found in much older neighborhoods, though they are still very rarely installed today. They are heavy and difficult to work with, which is why more areas are turning to plastic materials. While they are highly resistant to chemical degradation, they are also much more susceptible to being damaged by tree roots.
  • Fiber conduit pipes: These pipes are made out of tar paper, and are also referred to as Orangeburg pipes. They were frequently used from 1950 through the early 1970s, at which time they were mostly replaced by PVC pipe. It is developed out of different layers of wood pulp compressed together. They can last around 50 years in optimal conditions.
  • Plastic pipes: The most common types of plastic pipes are ABS and PVC, with PVC being the most common type of pipe used in homes built around the United States today. They are smooth and inexpensive. Their smoothness makes it less likely that tree roots will attach to them, but they are also more prone to breakage than other types of materials.

In your sewer line inspection, the inspector will determine the kind of piping you have, the condition those pipes are in and whether there is any cause for concern about their condition in the near future.

For more information about sewer line inspections, contact a realtor in Alpine, TX today.

How to Prepare Your Credit for Buying a Home

Like many Americans, this is the year you plan to buy a house. But while you’ve been saving your pennies, checking out neighborhoods you are interested in living in and searching houses online, you may not have considered the important role your credit score plays in your ability to secure a loan. For example, a conventional mortgage loan typically requires an average FICO score of at least 720, and people with scores at 580 may qualify for an FHA loan.

Here’s some information from a realtor in Alpine, TX for how to prepare your credit for buying a home:

  • Review your credit report: The first thing you need to do is check your credit report for any issues a few months before you plan to apply for a mortgage. For those who pay their bills on time, checking your credit for mistakes two to three months in advance should suffice. However, if you know you have late payments or other negative things that stand out on any of your accounts, you might want to start your review six to nine months in advance to allow enough time to remedy any issues.
  • Take care of inaccuracies: You may look at your credit report and find errors like an account you didn’t open, an account that’s not yours or an “unpaid item” that is actually paid off. File a dispute with the credit reporting agency immediately. It’s not unusual for someone to discover an inaccuracy on their credit report, so be thorough.
  • Have several tradelines: You will need at least three tradelines—such as credit cards, car loans, student loans, etc.—that have been active within the past 12 to 24 months to apply for a conventional loan; you need two tradelines for an FHA loan. Talk to you realtor about opening additional tradelines if you need them.
  • Don’t close old credit: Don’t close older credit cards—they can actually help boost your credit score. To keep old cards active, use them every few months and pay them off in full.
  • Don’t open new credit: New credit, meanwhile, can temporarily lower your score. For this reason, avoid opening new credit lines at least six months out from applying for a mortgage.
  • Avoid using credit: You’re excited about purchasing a house, and now you’re in escrow. This may lead you to buy new things for your new house on credit—like furniture, appliances and more—but you should avoid buying on credit (or applying for other loans, like a car loan) before closing. Being in escrow doesn’t mean you’ve got the house; in fact, if you have a debt utilization ratio above 30 percent right before closing, this could disqualify your home loan.
  • Leave money accounts alone: A mortgage lender will ask you to provide several months of bank statements, so don’t close accounts or make large money transfers. To create less paperwork, leave accounts as stable as possible for at least three months.

Are you in the market for a realtor in Alpine, TX? Then call Carpenter Real Estate today!

Is Mortgage Insurance Worth It? Info from a Realtor in Alpine, TX

Whenever you decide to take out a new mortgage, you’ll be offered mortgage protection insurance (MPI). There are several variations of this insurance available, but in general it is used to protect your loan payments in the event you lose your job, have sudden unexpected medical bills or experience a life-changing disability.

But is mortgage insurance actually worth it, or is it just another way for the mortgage company to get more money out of you? The answer primarily depends on your age, health and financial situation. Here’s some information from a realtor in Alpine, TX about whether mortgage insurance is right for you.

Benefits of mortgage protection insurance

Perhaps the most valuable benefit of MPI is that it is handed out on a “guaranteed acceptance” basis. There are very few, if any, questions on an application for MPI that will prevent you from getting the coverage you need, which is especially important for people who have health issues and who often have problems getting other kinds of insurance at a reasonable rate.

If you are someone who works in a high-risk occupation, this is also another way for you to protect your investment and your estate. People in the construction industry, for example, are more susceptible to injury and death on the job, and often have a hard time getting disability insurance. Mortgage protection insurance is an easier policy to get that will provide you with some protection for your home.

Drawbacks of mortgage protection insurance

If you already own your home outright, then MPI doesn’t do anything for you.

In other circumstances, keep in mind that MPI is a declining-benefit policy. You’ll pay a set premium for the entire life of the mortgage, but the payoff amount decreases as you continue to make your mortgage payments.

In addition, it might not always be the best decision to pay off most of your mortgage in the event of your death. Depending on the monthly amount of the mortgage payments, it might make more sense for you to leave behind lump sums to your beneficiaries and allow that money to collect interest while continuing to make the mortgage payments as outlined in your original loan agreement.

If you do decide to go with MPI, make sure you have a plan for how you’ll choose your policy. You shouldn’t automatically go through the same bank or lender providing your mortgage—you should do some shopping around to make sure you can get the best available rates and benefits.

There are also some alternative options you can choose. For example, if you’re considering an MPI plan that would be payable upon your death, you might consider a life insurance policy instead, as the policy would not decline in value over time and would, depending on the value of the policy, cover more than just your mortgage in the event of your death.

For more information about mortgage protection insurance, contact Carpenter Real Estate to speak with an experienced and knowledgeable realtor in Alpine, TX.

Is It Normal to See a Credit Dip After Buying a House?

If you recently purchased a new house, you’ve probably been carefully watching the progress of your credit score, as your rating affects your ability to get a mortgage with lower interest rates. After the purchase of your home goes through, it’s not uncommon for you to experience a credit dip.

Here’s some information from a realtor in Alpine, TX about how you can expect your purchase of a new home to affect your credit score.

Certain factors give a hit to your credit score

You’ll probably start seeing some minor hits to your credit score as soon as you start applying for mortgages with different lenders. Whenever you apply for pre-approval for a mortgage, lenders will perform a credit inquiry to see if your credit is sufficient for them to give you a loan. A hard credit pull essentially tells the algorithm you are actively looking for a new source of credit, which will cause a slight dip in your credit score.

If you want to limit the effect these hard credit pulls can have on your credit score, you should apply for pre-approval with several different companies in a single two-week span. With some credit scoring models you might be able to get away with drawing them out over a longer period of time, but by limiting them to a shorter time period you also limit the hit that your credit score has on you.

Actually opening up a new mortgage will cost you even more points in your credit rating, especially if it’s the first mortgage you’ve ever taken out. There will be a massive increase in debt, which will cause your score to drop. However, by making your mortgage payments on time, you’ll slowly build that credit score back up.

Debt can be a good thing

Keep in mind that adding to your credit mix can actually help your credit profile in the long run. About 10 percent of your credit score is determined by your credit mix, so if you have a greater variety, you’ll actually help your score.

And again, by paying your mortgage on time every month, you’ll start to build your credit score up again relatively quickly. In fact, for many people, it will only take a few months before your score is even higher than it was before you actually started applying for loans!

So, if you see your credit score decrease during and immediately after the home buying process, don’t fret. In the long run, you’ll actually help your credit score so long as you’re able to continue making your monthly payments in full and on time.

If you have any further questions about how purchasing a new home can impact your credit rating, or questions about any other financial issues that might arise as you seek a mortgage, feel free to contact a realtor in Alpine, TX. Get in touch with Carpenter Real Estate today, and we’ll be happy to provide you with any further information you want or need.

What Is a VA-Guaranteed Home Loan?

If you’re a veteran, you’re well familiar with many of the programs designed to get you up and running as a private civilian. From benefits that help you get back to school, to programs designed for work placement and community leadership, there are many systems set up to make life just a little bit easier. One of the biggest is access to a VA-guaranteed home loan.

If you’re unfamiliar with a VA-guaranteed loan, it’s something your realtor in Alpine, TX can tell you a lot about. Not only is this a common type of home loan, it’s one that virtually any veteran can take advantage of to establish their homestead after active duty.

All About VA Loans

This type of loan is typically issued by a private lender and covers much more than a conventional home loan—including eliminating the need for a down payment when it comes time to close a sale. You’re also guaranteed an exceptional interest rate with a VA loan, which is often close to the current market lows. Plus, there’s no monthly mortgage insurance premium to pay! Finally, there are no prepayment penalties to worry about.

Many lenders are more than willing to give VA-guaranteed home loans because the lenders themselves are protected from loss. In the event that something happens and you can’t pay back your loan, there are protections in place that mitigate liability. The U.S. Veterans Administration will actually provide oversight in foreclosure situations to find alternatives that are beneficial for everyone involved.

Is a VA Loan Right for You?

It goes without saying, but you have to be a military veteran (honorably discharged) to apply for a VA-guaranteed home loan. This is the chief stipulation—alongside the idea that the veteran in question must also live on the premises in the home the loan is being applied to.

In addition to the veteran aspect of the loan, anyone applying for a VA-guaranteed loan must have acceptable credit worthiness and sufficient income when it comes to being able to afford mortgage obligations in addition to other financial demands. VA-backed loans are determined on a case-by-case basis, but most veterans are eligible as long as they have available entitlement.

The other critical thing to remember about VA-guaranteed loans is that they’re made through third-party lenders, who may have their own stipulations for who qualifies. This could mean different credit score worthiness or income demands. It’s important to remember this when pursuing an application.

Learn More About VA-Backed Loans

If you’re a veteran thinking about a VA-guaranteed loan, be sure to speak with a qualified realtor in Alpine, TX. They’ll be able to provide you with the information you need to apply for this type of loan and can help guide you through the steps of finding a home that meets your criteria, as well as those of a lender. In many cases, this type of loan can trump even FHA or other housing authority-backed mortgages, making it a smart opportunity for those who have previously served.


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