imagesby Middleton O’Malley

Credit Rating: An acceptable credit rating is key to obtaining a loan. Credit ratings are run when you apply for a loan, and just before the Act of Sale.

Money: You have to have “some” money if you intend to buy a home. How much money that can be put “down” is a critical component of the process.  Also, money is needed for closing costs.

Visit An Accountant: To determine what you can afford, first, visit an accountant and find out.

Mortgage Lender:  Lenders can be banks, or mortgage companies that strictly sell mortgages. If you don’t have a lot of cash you may benefit from an FHA or VA loan, first time buyer programs, State bond money, or other special programs and incentives. There can be incentives for new physicians, teachers, police, and more. Ask your lender lots of questions; make sure you understand what they offer.

Lenders Fees: They can include administrative fees, cost of applications, credit reports, appraisal fees, and the discount points a buyer might pay to reduce the loan’s interest rate. Your lender will provide this information in a Good Faith Estimate that gives you an idea of monthly payments.

Insurance: When financing a home you’ll be required to purchase the first year of insurance, (Hazard, Flood, and liability), prior to the Act of Sale. Ask your insurance agent if the companies are “A” rated. Prices vary, and in New Orleans, they’re not cheap. Flood insurance, required by lenders, is a separate policy. In New Orleans, every home regardless of flood zone classification should have flood insurance.

Title Company: This is where most real estate transactions between, buyers and sellers, are conducted. It’s called an “Act of Sale”, and usually officiated by an attorney. Title Company costs are fairly consistent from one to another, but they may refer to some of their costs differently. One might call it a title search; another may call it an abstract. There can be costs associated with over-nighting documents, title search, filing fees, and so on. Make sure the title insurance is top shelf. The efficiency of title companies varies; ask us for a recommendation.

Title Insurance:  Generally paid at the act of sale.  A policy issued by an insurance company guaranteeing that the title to a parcel of real property is clear and properly in the name of the title owner, and that the owner has the right to deed the property (convey or sell) to another. Should a problem later arise with the title (such as an inaccurate property description, or a blemished ownership chain), the insurance company will pay the damages to the new titleholder or secured lender, and/or take steps to correct the problem.

Taxes:  In Orleans Parish, homeowners pay taxes at the beginning of the year. If you buy a home on May 31st, you will need to reimburse the seller, at the act of sale, for the June – December taxes. You also may be asked for additional money for taxes and insurance that will be applied to your lenders escrow account allowing them to have a full year’s worth of taxes/insurance on hand. In other parishes property taxes may be paid at the end of the year. Here, buyers may receive monies from the seller at the act of sale for the tax bill.

Got Questions?  Contact us, we can help.

* This information is provided to point buyers in a good general direction.  Specific information needs to be obtained from each participant in the buying process.

Mary Margaret Kean, Realtor

504-330-0374

mmknola@gmail.com

Middleton O’Malley, Realtor

504-579-4717

SRES (55+ Specialist), GREEN (Sustainable Building Practices),

ABR (Accredited Buyers Rep), GRI (Graduate Realtor Institute)

middleton@amnola.com

Coldwell Banker, TEC Realtors

​​504-899-4040

4500 Magazine St., Suite 2

New Orleans, LA  70115 USA

Re/Max Jaret & Cohn

207-596-0352

25 Park St.

Rockland, ME 04841 USA

licensed in Louisiana & Maine