THE FIRST-TIME HOMEBUYERS KIT.

Transcription

1 THE FIRST-TIME HOMEBUYERS KIT. What You Need to Know to Turn a Houe into a Home.

2

3 TD Bank Can Help You Realize Your Home-Buying Dream and Make the Proce Hale-Free A home i many thing. It helter and comfort, a well a a place to raie a family and make memorie. It alo one of the mot ignificant purchae you ll make in your life. Although real etate market move up and down, over the year, home ownerhip i often conidered a mart, long-term financial invetment in your future. That why it important to be informed and have a good undertanding about the home-buying proce. While buying your firt home i an exciting time, the proce can be complicated and intimidating for many but you don t have to do it alone. TD Bank i here to help make thi a rewarding experience for you. Thi Firt-Time Homebuyer Kit i deigned to help you learn about the home-buying proce and provide the advice and information you need to chooe a home and a mortgage that are bet uited to your need. Ret aured, if you have quetion or need help a you go through the home-buying proce, our mortgage advior are alway here for you: in peron, on the phone or online. The TD Bank Difference A America Mot Convenient Bank, TD Bank i committed to a clear and hale-free mortgage proce with no hidden fee or urprie. You can alway trut u to find the right mortgage for your need and to deliver a uperior home-buying experience. We Make Applying Eay and Convenient You can apply for your TD Bank Mortgage the way that mot convenient for you. Online at Over the phone by calling and one of our mortgage advior will be happy to ait you At your nearet TD Bank tore (we re open early and open late, and mot tore are open 7 day a week) With one of our mortgage advior who will come to you A Hale-Free Mortgage. Guaranteed. Our Hale-Free Mortgage Guarantee 1 make purchaing a home a mooth and worry-free a poible. We guarantee: Same-day loan deciion or we ll pay you $500 On-time cloing on your mortgage or we ll pay you $500 When You Get a Mortgage at TD Bank, It Stay at TD Bank Unlike mot lender who will ell your mortgage after cloing, TD Bank intend to keep your loan a part of it total invetment portfolio 2. Thi mean we can et our own lending guideline and interet rate to offer more affordable, flexible home financing option. And, we ll be here for you long after your loan cloe becaue we recognize that your home borrowing need may change in the future. Take comfort in knowing that we ll help you put your home at the heart of your financial well-being. 1 Guarantee do not apply to application for refinance and home equity product, and loan in exce of $3,000,000. One $500 payment per individual guarantee. Guarantee are not valid if loan amount or product change. Same-day deciion and on-time cloing guarantee ubject to receipt of required information and document. For purpoe of the guarantee, ame-day i within 24 hour of receipt of required information; excluding Saturday, Sunday and federal holiday. Cloing date will be mutually agreed upon. Offer ubject to change at any time. 2 TD Bank originate all mortgage loan with the intention of ervicing them for the life of the term, with the exception of Federal Houing Adminitration (FHA) loan, which are old to econdary market invetor. The ale of mortgage loan i not limited to FHA loan; TD Bank retain the right to ell any loan, at any time, at it dicretion. 3

4 Table of Content 5 Step TD Bank Firt-Time Homebuyer Kit STEP 1 6 Learn About Homeownerhip Homebuyer Education Coure Deciding If Homeownerhip I Right for You STEP 2 7 Determine How Much Home You Can Afford Pre-qualified STEP Shop For A Home Type of Home Selecting a Real Etate Profeional Making an Offer The Seller Repone to Your Offer STEP Find The Right Mortgage The TD Bank Difference Type of Mortgage Documentation You May Need What to Expect During The Application Proce Your Mortgage Advior and Mortgage Proceor Anticipating Required Fund STEP Cloe The Loan & Move In Cloing Your Loan Who I Involved at Cloing? What to Bring to Cloing How to Prepare for Cloing During Cloing After Cloing 4 The information provided in thi kit i for informational purpoe only and i not intended to provide pecific financial, invetment, tax, legal, accounting or other advice to you, and hould not be acted or relied upon in that regard without eeking the advice of a profeional. Your advior can help to enure that your own circumtance have been properly conidered and any action i taken on the latet available information.

5 Table of Content Continued TD Bank Firt-Time Homebuyer Kit Houe Comparion Checklit 18 The Home The Neighborhood School Convenience Mortgage Checklit 19 Income Aet Credit Property Mortgage Gloary FAQ Sheet 22 What are cloing cot? Should I chooe a fixed rate or adjutable rate mortgage? How do I determine what price home I can qualify for? When hould I refinance? What i Private Mortgage Inurance (PMI), and who pay it? Houe Comparion A a firt-time homebuyer, Checklit what do I need to know? 1 Should I include homeowner inurance in my etimated monthly payment? Learn About Homeownerhip 1 The Home 1 Moving Checklit The Neighborhood 1 School 1 Convenience Quick Summary 1 How The to Detail Prepare for Cloing 1 During Cloing 1... After Cloing 4 Week Prior to Moving Week Prior to Moving... 1 Week Prior to Moving... 1 Day Prior to Moving... Moving Day 5

6 STEP 1 Learn About Homeownerhip TD Bank Firt-Time Homebuyer Kit Homebuyer Education Coure Owning a home require a large invetment of time, money and energy, o you hould make your deciion to buy a home carefully. We alo realize that ome people may want more information or may have additional quetion and for that we ugget that you participate in a Firt-Time Homebuyer cla offered by a local non-profit agency in your community. Finding a local non-profit agency will help you prepare for the home-buying proce. Mot agencie provide group eminar and one-on-one interview. It i important that you find a certified education program to be enured that all element of the proce are accurate. Below are three organization that provide accreditation for non-profit home-buying program. Thee link will direct you to agencie in your community: National Foundation for Credit Couneling the nation larget and longet erving national non-profit credit couneling network, with more than 100 member agencie and nearly 850 office throughout the country. NeighborWork America a national network of more than 240 community development and affordable-houing organization throughout the country. The US Department of Houing and Urban Development (HUD) certifie non-profit homeownerhip program enuring conitency and quality. There are many certified program throughout the country. Deciding If Homeownerhip I Right for You Buying a home in order to build equity i one of the main financial reaon propective buyer jump into the market, but many people alo yearn for the atifaction of homeownerhip. However, buying a home in t for everyone and it important to know the benefit of owning a home v. renting in order to determine what right for you. Reaon to Rent Flexibility by not being locked into the equity of a home, you can explore different area without committing to jut one, a well a have the flexibility to react more quickly to unexpected career or income change Improving your Credit by making on-time rental payment and building a poitive credit hitory, you can build the credit you need to qualify for a mortgage No Maintenance houehold maintenance i the reponibility of the landlord Incidental Expene when renting, many utilitie may be covered by the landlord uch a water, ewerage, garbage and, in ome cae, heat and hot water However, when renting, it important to be aware of unpredictable rent fluctuation. Thi can often make long-term budgeting more difficult. Reaon to Buy Pride of Ownerhip having your own home to enjoy with family and friend create unparalleled pride Creative Control feel free to paint or remodel a you wih to make your houe into a home Equity with every mortgage payment, you may increae the degree of ownerhip in your home. Alo, you can borrow againt your ownerhip (or equity) in the home to pay for major purchae, refinance your home at favorable rate, or once you ve paid the entire mortgage off, borrow to fund major purchae like a econd home or your child education Tax Deduction a a homeowner, you may deduct mortgage interet a well a your property taxe (conult a tax advior about tax deductability) 6

7 STEP 2 Determine How Much Home You Can Afford TD Bank Firt-Time Homebuyer Kit One of the mot important tep for every homebuyer i to determine exactly how much home you can afford. At TD Bank, you can achieve thi eaily by getting pre-qualified. Pre-qualified Getting pre-qualified involve upplying u with your baic information regarding your debt, income and aet. By dicuing your income and current monthly debt, together we can get an idea of the mortgage amount, a well a the ideal monthly payment, for which you could poibly afford and qualify. We ll alo include down payment and other up-front cot in your calculation. Once you re pre-qualified, you ll be able to narrow the focu of your houe hunt to home in your price range o you can hop with confidence. What more, with our Hale-Free Mortgage Guarantee (a decribed in Step 4) and rapid, ame-day approval proce, we can expedite your loan once you find your ideal home and enter into a purchae contract. For more help in determining jut how much you could potentially afford, viit your nearet TD Bank Store or ue our mortgage calculator at Your TD Bank mortgage advior can help you get pre-qualified to get the proce tarted today. 7

8 STEP 3 Shop For A Home TD Bank Firt-Time Homebuyer Kit Type of Home Once you know how much home you can afford, it time to hunt for the houe of your dream. With all the type of home out there, it can be tough to know which i the bet fit for you. Many factor impact the ideal type of houe for each buyer, including deired feature and benefit, lifetage and how many improvement you re willing to make before moving in. Here a look at the mot common type of houe and their aociated benefit and drawback: Single-family Home Thee detached home (houe that it on their own lot) come in one (ranch), two and three-level tyle. Their exterior appearance can be Contemporary, Colonial, Tudor, Victorian or Georgian. A the name implie, ingle-family home are ideal for familie, epecially thoe with children. Privacy i an attractive characteritic of thee home, which may have a fenced back yard. On the other hand, you ll have to keep up with more maintenance than with other home type. Condominium (Condo) Condo are individually owned home attached to one another in a building (like apartment), and feature common facilitie, uch a recreation area and fitne room. Each condominium building belong to an aociation of all it owner. The aociation determine the monthly aement fee along with rule and regulation that govern the entire building. The aociation alo decide on maintenance and improvement to the condo building. Like a ingle-family home, you build equity when you own a condo, but unlike a houe, you have le maintenance to deal with. Remember that condo typically offer le privacy, and during a houing-market downturn, they uually depreciate more than a houe. Cooperative Apartment (Co-op) Similar to condo but uually le expenive, co-op are popular in large urban area. New York City i known for them. A co-op i different from a condo, in that intead of buying the unit, you buy hare in a corporation that own the building. And before you can buy hare, you have to be approved by the building co-op board. Each hareholder ha the right to leae a pecific unit in the building. Keep in mind that you may have a more difficult time elling your co-op unit becaue of the board-approval proce. Townhoue Whether they re one, two or three torie tall, townhoue (alo called townhome or row home) are typically vertical in deign. Some even come with attached garage. They offer the privacy of a ingle-family home and ome may have the added benefit of exterior condo maintenance, which may be done by a homeowner aociation. However, you may not enjoy a much outdoor pace with a townhhome and common pace i often hared. Row houe are common in citie or urban area where they ometime even offer hitorical value. Many townhoue are built in what are called Planned Unit Development (PUD), clutered communitie that have area for reidential and commercial ue, and public area uch a chool, park and the like. Fixer-upper Thee are uually condo and ingle-family home that are in need of extenive repair, maintenance or updating. Fixer-upper can uually provide a good value to buyer who want to put ome weat equity into a property and add ome peronal touche a well. On the other hand, there can be additional cot due to major defect in the home, uch a foundation crack and defective heating and air conditioning unit. Have a profeional home inpector check the home from top to bottom before you decide to buy it. 8

9 TD Bank Firt-Time Homebuyer Kit New-contruction Home How would you like your home to look? New contruction houing allow you to deign a home from top to bottom. You can pick your choice of finihe, cabinet, bath fixture and more. Some builder alo allow you to move wall in pre-deigned model and pick the lot within their community to place your home. Expect to pay more money for a new contruction. Pre-contruction typically offer you reduced pricing before a development or building get under way. You need to be fairly creative to viualize your new home from floor plan, becaue there uually aren t model to view until the project get underway. If you decide to purchae new contruction, make ure you reearch the developer or builder track record before you ign the purchae contract. Green Home Green, or eco-friendly living, i blooming everywhere. No le in the world of real etate, where green building and renovation are becoming maintream. According to the U.S. Green Building Council (USGBC), a green home ue building material from recycled product, including wood uch a bamboo that are quickly renewable. A green home ue le energy, water and other natural reource, and it hould generate ome of it own energy with photovoltaic cell (olar panel) or wind turbine. Inide, a green home window and door are well-inulated, and paint, carpet and other material do not emit volatile organic compound. A green houehold alo ha cot-aving Energy Star lighting and appliance, and howerhead and toilet that ue le water. Look for the USGBC LEED certification in a green home, which mean that it meet utainable contruction tandard. Selecting a Real Etate Profeional The majority of real etate tranaction take place with the aitance of a real etate profeional and for good reaon. Working with a real etate profeional i an efficient mean of hopping for a home and can help make the home-buying proce an eay, hale-free experience. A real etate profeional: Help you ae your want and need to find a home that you can afford and that bet uit your preference. Accee the propertie on the market in your deired area and price range that fit your individual home need. May help you get a better price. Your real etate profeional i a pecialit in your area and know the market well, which may help you better negotiate pricing. Negotiate for you. Once you have found the home you want to buy, your real etate profeional will write up your purchae offer and preent it to the eller. Thi give you the bet opportunity to have your contract accepted. Can help protect your right. Real etate tranaction have become increaingly complicated. Your real etate agent i there to ait you a a trained real etate profeional. 9

10 TD Bank Firt-Time Homebuyer Kit Making an Offer A written propoal i the foundation of a real etate tranaction, a oral promie may not be legally enforceable when it come to the ale of real etate. Therefore, when you re ready to take the leap toward homeownerhip, you ll need to enter into a written contract, which tart with your written propoal. Thi propoal not only pecifie price, but all the term and condition of the purchae. For example, if the eller aid they d help with $2,000 toward your cloing cot, be ure that included in your written offer and in the final completed contract, or you won t have ground for collecting it later. Real etate profeional have a variety of tandard form (including Reidential Purchae Agreement) that are kept up to date with the changing law. So if you decide to partner with a real etate profeional, thee form will be available to you. In addition, real etate profeional can alo anwer your quetion during the proce. If you are not working with a real etate profeional, keep in mind that you mut draw up a purchae offer or contract that conform to tate and local law and that incorporate all of the key item. State law vary and certain proviion may be required in your area. After the offer i drawn up and igned, it will uually be preented to the eller by your real etate profeional, by the eller real etate profeional (if that a different agent) or often by the two together. In a few area, ale contract are typically drawn up by the partie lawyer. What The Offer Contain The purchae offer you ubmit, if accepted a it tand, will become a binding ale contract (known in ome area a a purchae agreement, earnet money agreement or depoit receipt). It important, therefore, that it contain all the item that will erve a a blueprint for the final ale. Thee purchae offer item include uch thing a: Addre and ometime a legal decription of the property Sale price Term for example, all cah or ubject to your obtaining a mortgage for a given amount Seller promie to provide clear title (ownerhip) Target date for cloing (the actual ale) Amount of earnet money depoit accompanying the offer, and whether it a check, cah or promiory note, and how it to be returned to you if the offer i rejected or kept a damage if you later back out without good reaon Method by which real etate taxe, rent, fuel, water bill and utilitie are to be adjuted (pro-rated) between buyer and eller Proviion about who will pay for title inurance, urvey, termite inpection and other related expene Type of deed to be given Other requirement pecific to your tate, which might include a chance for attorney review of the contract, dicloure of pecific environmental hazard or other tate-pecific claue A proviion that the buyer may make a lat-minute walk-through inpection of the property jut before the cloing A time limit (preferably hort) after which the offer will expire Earnet Money Thi i a depoit that you give when making an offer on a houe. A eller i undertandably upiciou of a written offer that i not accompanied by a cah depoit to how good faith. A real etate profeional or an attorney uually hold the depoit, the amount of which varie from community to community. Thi will become part of your down payment, or returned to you if your offer i declined. 10

11 TD Bank Firt-Time Homebuyer Kit The Seller Repone to Your Offer You will have a binding contract if the eller, upon receiving your written offer, ign an acceptance a it tand. The offer become a firm contract a oon a you are notified of acceptance. If the offer i rejected, be ure to find out what the pecific iue were with the offer and ue your knowledge a you continue your earch. If the eller like everything except the ale price, or the propoed cloing date or the baement pool table you want left with the property, you may receive a written counteroffer, with the change the eller prefer. You are then free to accept or reject it or to even make your own counteroffer. For example, We accept the counteroffer with the higher price, except that we d like the billiard table included. Each time either party make any change in the term, the other ide i free to accept or reject it, or counter again. The document become a binding contract only when one party finally ign an unconditional acceptance of the other ide propoal. 11

12 STEP 4 Find The Right Mortgage TD Bank Firt-Time Homebuyer Kit The TD Bank Difference At TD Bank, we pride ourelve on making the mortgage proce a traightforward and hale-free a poible from application through cloing and beyond. We intend to keep and ervice all of our loan, 1 unlike ome other bank, allowing u to offer a range of flexible and affordable home financing option to fit your need. Our expert mortgage advior will help find the borrowing olution that right for you. A Hale-Free Mortgage. Guaranteed. Our Hale-Free Mortgage Guarantee 2 make purchaing your firt home a mooth and worry-free a poible. We guarantee: We ll provide a ame-day loan deciion or you get $500 We ll cloe your loan on-time or you get $500 Type of Mortgage Fixed Rate Mortgage If you plan to own your home for everal year and prefer the tability of fixed monthly payment, a fixed rate mortgage may be the right choice for you. Lock in a fixed interet rate for the life of your loan Take advantage of low down payment option Chooe from a variety of term to fit your need Ret eay knowing that your monthly principal and interet payment will never increae Adjutable Rate Mortgage Adjutable rate mortgage work bet if you plan to tay in your home a few year or if you re looking for lower up-front payment. Receive a lower initial interet rate Be aured that, although your payment may increae a rate fluctuate, there i a limit on the amount your interet rate can increae or decreae over time Affordable Houing Program We offer mortgage to buyer who may not meet the requirement of traditional program, including dicounted rate for low- to moderate-income borrower on FHA and VA mortgage. Contruction Mortgage Build your home from the ground up in a complete package. Keep expene low with interet-only monthly payment during the contruction phae Automatically convert monthly payment to principal and interet at the end of the 12-month contruction term, or earlier, if your home i completed ahead of chedule Jumbo Mortgage Whether you need ubtantial financing for a primary reidence or econd home, our jumbo mortgage are ideally uited and competitively priced. We offer a variety of financing option for loan tarting at $417,001 to $3 million, and more 12

13 TD Bank Firt-Time Homebuyer Kit Documentation You May Need Peronal Identification Paport Driver licene Voter ID card Birth certificate Social Security number or tax identification number A copy of divorce decree or bankruptcy paper, if applicable In addition to peronal identification, financial document are alo required when applying for a mortgage. Financial and Income Documentation Proof of Income/Pay Stub a copy of your mot recent pay tub or award letter for any Social Security income received W-2 W-2 form for the pat two year will be requeted from each employer you receive income from If You Own Your Own Buine, Work on a Commiion Bai or have other income outide of your primary employment the lat two year of tax return will be required Additional documentation of income may be required: - If your buine i a corporation, include IRS Form If your buine i an S Corporation, include IRS Form 1120 and Schedule K1 - If your buine i a partnerhip, include IRS Form 1065 and Schedule K1 Invetment/Retirement Income account tatement howing current market value of any invetment you may have uch a tock, bond, 401(k), IRA or certificate of depoit Recent Bank Statement bank account tatement for the pat few month may alo be requeted. If you have both checking and aving account, tatement for both account hould be ubmitted Copy of Leae or Rental Verification if you re a renter, a current leae or a form igned by the landlord may alo be requeted. A part of the underwriting proce, TD Bank may contact the landlord to verify rent paid and whether or not it wa paid on time Property Documentation Copy of Sale Contract or Purchae Agreement thi will include addre and decription of the property and explain the major term of ale Proof of Inurance A Copy of Your Homeowner Inurance Declaration thi hould be the firt page of your homeowner inurance policy packet with your information a well a the information of the inurer 1 TD Bank originate all mortgage loan with the intention of ervicing them for the life of the term, with the exception of Federal Houing Adminitration (FHA) loan, which are old to econdary market invetor. The ale of mortgage loan i not limited to FHA loan; TD Bank retain the right to ell any loan, at any time, at it dicretion. 2 Guarantee do not apply to application for refinance and home equity product, and loan in exce of $3,000,000. One $500 payment per individual guarantee. Guarantee are not valid if loan amount or product change. Same-day deciion and on-time cloing guarantee ubject to receipt of required information and document. For purpoe of the guarantee, ame-day i within 24 hour of receipt of required information; excluding Saturday, Sunday and federal holiday. Cloing date will be mutually agreed upon. Offer ubject to change at any time. 13

14 TD Bank Firt-Time Homebuyer Kit What to Expect During The Application Proce 1 Application A TD Bank mortgage advior will meet with you to dicu your peronal goal and financial ituation. You ll have ample time to review your mortgage option, dicu the mortgage application proce and get anwer to any quetion you may have. Or, if you prefer, you can peak with any of our mortgage advior and apply by phone 24/7. You may alo viit our webite and apply online. 2 Proceing We ll aign a Loan Proceor to your account to ee your tranaction through to cloing. Thi include the verification of your financial information and collection of document to atify the condition of the approval. Your Loan Proceor will be happy to anwer any quetion you may have. You ll be able to view the tatu of your application online. 3 Appraial We ll order the appraial from a licened appraier who i familiar with home value in your purchae area. Depending on your finance and the loan amount requeted, different type of appraial are ued. Sometime the appraier will need to view the interior of the home; ometime they are able to do their evalution from the treet. 4 Underwriting/Commitment A mortgage loan underwriter review your financial profile and compare it to the guideline for your choen loan. Upon approval, you will receive a conditional approval of the mortgage term and condition. 5 Cloing A cloing i a meeting of all the related partie to finalize the tranaction. Prior to the cloing, the cloing agent will provide a copy of your ettlement tatement, o there won t be any urprie at cloing. At cloing, paperwork aociated with the tranaction i igned and witneed, and arrangement are made for the diburement of the loan proceed. Your Mortgage Advior and Mortgage Proceor Your mortgage advior and mortgage proceor play an important role in your homeownerhip journey. The mortgage advior i often your initial contact at the bank and ha the opportunity to help you determine your mortgage need and provide information and advice to help determine which mortgage product bet uit you. The mortgage advior would then run initial calculation to determine if your borrowing power i within the lender guideline. The mortgage advior will then collect your peronal document and turn them over to your mortgage proceor. Your mortgage proceor interact with all the partie involved in the tranaction. The primary function of the mortgage proceor i to enure that mortgage originated by loan officer are packaged and proceed accurately in a timely manner. Proceing and Verification Once the application i complete and the mortgage proceor ha obtained the upporting document, he or he procee the application and verifie all the information that ha been provided. Thi involve checking the applicant credit report and verifying hi or her employment tatu. If any iue arie from thi review, uch a bankruptcie or late payment, the mortgage proceor work with the client to get explanation for thee iue that can be ubmitted with the file. Completing the Application The mortgage proceor order the appraial and title work from third-party companie and might work with the real etate agent to obtain the igned contract for purchae and other detail about the property. Once the mortgage proceor ha the documentation, appraial and title work together, he or he end the file to the mortgage underwriter who make the final lending deciion baed on the information in the file and the lender guideline. 14

15 TD Bank Firt-Time Homebuyer Kit Finihing The Proce If the file i approved by the underwriter, the cloing department work with all the partie involved to chedule the cloing date and prepare the document for cloing. After the cloing, it i the cloing department reponibility to make ure that the igned documentation and paperwork i proceed. Anticipating Required Fund The amount of money you ll need up-front to cloe your loan i typically compried of your down payment, the cot of the home inpection and your cloing cot, a well a the prepaid item for your initial taxe and inurance ecrow account. To ait you with thi determination, we re required to provide you with a Good Faith Etimate (or GFE ) of ettlement cot within three day of your application. Alo, generally within 24 hour prior to your cloing, the cloing agent will provide you with the final um of money required for the cloing. Down Payment Down payment requirement typically range from 5% to 20% of the cot of the houe. The more you can put down, the greater equity you ll have in your home and the lower your monthly payment will be. For down payment le than 20% you may alo be required to pay mortgage inurance. Cloing Cot Cloing cot typically range from 2% to 6% of the loan amount depending on your area. Thee cot include fee that you ll need to pay to tate and local government a well a fee aociated with obtaining and originating your mortgage. 15

16 STEP 5 Cloe The Loan and Move In TD Bank Firt-Time Homebuyer Kit Cloing Your Loan Once your home ha been inpected, your contingencie have been met and your mortgage ha been approved, it time to cloe the deal! While every cloing i a little different, there are certain element that each cloing ha in common. Who I Involved at Cloing? You of coure will be in attendance along with (in mot cae) a repreentative of your lender, called a cloing officer, or a repreentative of the title inurance company. The cloing officer job i to make ure that all neceary document are igned and verified and that the money from the ale i properly ditributed. In ome cae, you may alo have your own attorney attend the cloing. Sometime, the eller will be preent, along with any real etate agent involved in the ale. It i common for buyer and eller to complete their paperwork in eparate room and never ee each other on the day of cloing. What to Bring to Cloing A the buyer, you hould bring the following document to the cloing: Binder for homeowner inurance and paid receipt. Before going through with the cloing, the cloing officer will contact you to confirm that you have your binder for homeowner inurance and your paid receipt for the firt-year premium. A binder i a document that prove you have adequate homeowner inurance for the home you are buying. Your lender will not iue the mortgage loan without it Certified or cahier check for your down payment and cloing cot. You can find out the exact amount you will need by contacting your lender a day or two before the cloing How to Prepare for Cloing Review all of your cloing document (with your attorney if you chooe to ue one) to be ure there are no error or problem before the cloing begin. Thee document will include: The Mortgage, a eparate document that you ign at cloing, in which you pledge your home a ecurity for the loan. In ome tate, buyer() ign a Deed of Trut rather than a mortgage, but both document erve the ame purpoe The Mortgage Note, your promie to repay your loan. It indicate the term and condition of your loan and how it will be repaid (the amount of your monthly mortgage payment for principal and interet, when it i due, the length of the mortgage, etc.) The Settlement Statement, created by the Federal Department of Houing and Urban Development (HUD) i ued in mot reidential real etate cloing in the United State to itemize the cot aociated with the loan During Cloing Once the cloing get underway and the cloing officer ha verified that you have your binder and your paid receipt for homeowner inurance, he or he will explain each cloing document and ak you to ign each of them. Your cloing officer will anwer any quetion you have about the document before you ign them, o don t heitate to ak. Typically, the cloing officer will begin by reviewing the mortgage note and the mortgage document and ak you to ign them. Then, he or he will move on to the Settlement Statement. Beginning on the back of the form, where each of the cot being paid by the eller and the buyer i itemized, you will find a breakdown of the cot, including: All the buyer and eller cloing cot A ummary of both partie tranaction by howing how fund are tranferred among the buyer, eller, lender and any other partie involved in the ale 16

17 TD Bank Firt-Time Homebuyer Kit The net amount due from the buyer and the net amount that will be paid to the eller Commiion to real etate agent involved in the ale Any lender charge made in connection with the loan, uch a point and other fee Item that the lender may require to be paid in advance, uch a interet due from the date of the cloing until the firt mortgage payment Amount depoited in ecrow to cover inurance and property taxe Title charge for the title earch required by the lender and title inurance policie for the lender and the buyer Charge to cover recording the mortgage and deed at the county courthoue Tax ervice fee to cover the lender cot of reearching the tax rate for the property The cloing officer will then go over the ummary of each party tranaction (on the front of the form). The left column ummarize the buyer tranaction and the right ide ummarize the eller. The ale price of the home i lited at the top of both column. Amount are added or ubtracted in both column to arrive at the net amount due from the buyer to the eller. After the cloing officer ha covered the entire Settlement Statement, he or he will ak for a check for the down payment and cloing cot. When all of the buyer document have been explained and igned, the cloing officer will move on to the eller document. After the Settlement Statement, the cloing officer will review both the Deed and the Commitment for Title Inurance, making ure that the legal decription on each document match exactly. The final activity at cloing involve the ditribution of the money generated by the ale. It the cloing agent reponibility to preent check to: The eller The eller lender, if there i an exiting mortgage on the property The real etate agent involved in the ale Any other who may be indicated on the Settlement Statement After Cloing After you have igned all the neceary document and paid your cloing cot and down payment, the cloing i finihed. Your poeion date, the day you can move into your new home, i tated in the purchae agreement. If your poeion date i the ame day a your cloing, you will receive the key to your new home before you leave! If your poeion date i different than the cloing date, arrangement will be made to ecure the key on the poeion date. CONGRATULATIONS ON BUYING YOUR FIRST HOME! 17

18 Home Comparion Checklit You ll want to make everal copie of thi checklit and fill one out for each home you tour. Then, comparing your rating later will be eay. Addre THE HOME Good Average Poor THE NEIGHBORHOOD (cont d) Good Average Poor Square footage Number of bedroom Number of bath Practicality of floorplan Interior wall condition Cloet/torage pace Baement Fireplace Cable TV Baement: dampne or odor Exterior appearance, condition Lawn/yard pace Fence Patio or deck Garage Energy efficiency Screen, torm window Roof: age and condition Gutter and downpout THE NEIGHBORHOOD Appearance/condition of nearby home/buinee Traffic Noie level Safety/ecurity Age mix of neighbor Number of children Pet retriction Parking Zoning regulation Good Average Poor Neighborhood retriction/covenant Fire protection Police Snow removal Garbage ervice SCHOOLS Good Average Poor Age/condition Reputation Quality of teacher Achievement tet core Play area Curriculum Cla ize Buing ditance CONVENIENCE TO: Good Average Poor Supermarket School Work Shopping Child care Hopital Doctor/dentit Recreation/park Retaurant/entertainment Church/ynagogue Airport Highway Public tranportation 18

19 Mortgage Checklit Pleae bring the following paperwork to your initial meeting with a TD Bank mortgage advior. You will alo be required to attach copie of mot of thee document to your mortgage application for proceing. Income: W-2 income tatement for prior year Mot recent pay tub reflecting at leat 30 day of year-to-date earning Credit: Letter of explanation for any recent credit inquirie from the pat 60 day Divorce decree (if applicable) If your ource of income i from commiion, dividend, interet or rental property, provide a complete copy of your filed and igned tax return for the prior year If elf-employed, provide a complete copy of your filed and igned peronal tax return with all chedule for the previou two year If you are a ole owner or hare ownerhip in a corporation, provide the mot recent two year of buine tax return along with your peronal tax return Proof of receipt of alimony or child upport, if needed to qualify for thi loan If you receive a fixed income, e.g. Social Security, Retirement/ Penion or Diability, pleae provide a copy of the award letter or proof of receipt of income; depending on ource of income, more information could be requeted Addre, mortgage tatement and tax and inurance cot for other real etate owned; if rental propertie, alo include page 1 and 2 and Schedule E of your tax return for the prior year Property: Fully executed purchae and ale contract Copy of the Earnet Money Depoit check (will need to how that thee fund have been cleared by your bank) Contact information for broker() Legal decription of property Copy of homeowner and flood inurance (if applicable) Aet: Complete checking and aving account tatement for the lat two month Mot recent complete retirement account, 401(k) and/or invetment account tatement If you are receiving gift fund for your cloing, a copy of the depoited check along with a letter detailing the term for repayment, if any, from the grantor 19

20 Mortgage Gloary Adjutable Rate Mortgage (ARM) A mortgage in which the loan rate change during the life of the loan. Change are governed by the movement of an index uch a the treaury bill, treaury ecuritie index, or London Inter-Bank Offered Rate (LIBOR) and the margin and cap of the particular ARM program. Amortization The gradual repayment of a mortgage by cheduled intallment. Annual Percentage Rate (APR) The actual interet rate, annualized, that a borrower pay when certain cot of financing are included. Appraial A profeional etimate of a property market value. Aeed Valuation The value placed on a property to determine property taxe. Cap A limit placed on the upward movement of the payment and interet rate of a loan. Cloing The meeting to finalize your financing by igning all document and making the appropriate payment, including cloing cot. Cloing Cot Cot, in addition to the property price or loan payoff, that are due at the cloing. Cloing cot often include: origination fee; dicount point; attorney fee; cot for title inurance, urvey and recording document; and prepayment of real etate taxe and inurance premium. Cloing cot may include other fee, uch a appraial credit report cot and underwriting fee. Sometime the eller will help the borrower pay ome of thee cot. Cloing Statement A tatement of all applicable financial detail of the tranaction. Both the buyer and eller receive one. The tandardized HUD-1 Settlement Statement form i ued in mot reidential tranaction. Collateral Property pledged a ecurity for a debt, uch a real etate ecuring a mortgage. HUD The Department of Houing and Urban Development i a U.S. government agency reponible for regulating mortgage cloing and the adminitration of federal houing and urban development program. Down Payment The portion of the purchae price that the buyer pay and doe not finance with a mortgage. Ecrow Account An account held by the ervicer to which the borrower pay monthly intallment for property taxe and inurance. The ervicer dibure fund a they become due. Fannie Mae (Federal National Mortgage Aociation) A private, hareholder-owned corporation created by Congre to upport the econdary mortgage market by purchaing and elling reidential mortgage inured by the Federal Houing Adminitration (FHA) or guaranteed by the Veteran Adminitration (VA), a well a conventional home mortgage. Fixed Rate Mortgage A mortgage in which the interet rate doe not change throughout the loan term. Freddie Mac (Federal Home Loan Mortgage Corporation) A tockholder-owned corporation chartered by Congre to increae the upply of fund mortgage lender can make available to homebuyer and multi-family invetor. Gift Letter A letter or form verifying that part of the down payment i upplied by omeone other than the borrower a a gift that doe not have to be repaid. Good Faith Etimate A tatement providing a breakdown of the etimated cloing cot. Hazard Inurance A broad form of real etate caualty inurance coverage that include protection againt lo from fire, certain natural caue and vandalim. Hometead Exemption A tate exemption that protect hometead property, uually to a et amount, againt the attachment right of creditor. Index For an adjutable rate loan, a meaure of current market interet rate i ued to determine a new interet rate at the time of adjutment. If the index increae, the interet rate increae until an interet rate cap i reached. An index mut be readily verifiable by the borrower and i beyond the control of the lender. Loan-To-Value Ratio The ratio of a loan amount to the value or elling price of real property, uually expreed a a percentage. Margin The amount added to the index to determine the rate on an adjutable rate mortgage. 20

21 Market Value An etimate of the price a property would ell for within a reaonable period of time on the open market under normal condition. Mortgage A legal document that pledge a property to the lender a ecurity for payment of debt. Point One point equal one percent of the mortgage amount and i a one-time charge by the lender at cloing. A borrower can pay point to reduce the interet rate of a loan. Pre-Approval The proce ued to determine how much money a homebuyer i eligible to borrow. Generally, the borrower credit report i obtained. Pre-Qualification Compared to pre-approval, a le formal proce ued to etimate how much money a homebuyer may be eligible to borrow. Private Mortgage Inurance (PMI) Inurance written by an independent mortgage inurance company protecting the mortgage lender againt lo if a borrower doe not pay the loan. Refinancing The proce of paying off one loan with the proceed of a new one and uing the ame property a ecurity. Secondary Market The financial market where mortgage are bought and old. Servicer The intitution that collect loan payment and adminiter the loan after cloing. Thi may or may not be the ame company a the initial lender. Title Inurance Lender Inurance protecting the lender againt lo ariing from dipute over lien priority and ownerhip. Title Inurance Owner Inurance protecting the buyer againt lo from dipute over right to the property and ownerhip. Tranfer Tax State or local tax paid when real etate pae from one owner to another. Underwriting The proce of reviewing a loan, including an evaluation of the property, a review of the applicant creditworthine and compliance with program guideline. Rate Lock A written agreement that guarantee the borrower a pecified interet rate a long a the loan i cloed within a et period of time. 21

22 FAQ Many people have quetion about mortgage, including the type of loan that i right for them. You ll find anwer to the mot common quetion below. Your TD Bank mortgage advior i alway available to anwer thee or other quetion in more detail. Q. What are cloing cot? A. Cloing cot are the fee paid at the meeting that complete your tranaction, alo known a the cloing. Cloing cot often include: origination fee; dicount point; attorney fee; cot for title inurance, urvey and recording document; prepayment of real etate taxe and inurance premium; appraial fee, credit report cot and underwriting fee. Sometime the eller will help the borrower pay ome of thee cot. Your TD Bank mortgage advior will provide you with a detailed etimate of your cloing cot. Q. What i Private Mortgage Inurance (PMI), and who pay it? A. Private Mortgage Inurance enable a borrower to purchae a home with le than a 20 percent down payment. PMI protect the mortgage lender againt lo if a borrower doe not repay the loan. It i the reponibility of the borrower to pay the premium for thi inurance. Your TD Bank mortgage advior will be happy to dicu PMI and available government-inured program. Q. Should I chooe a fixed rate or adjutable rate mortgage? A. There i no imple anwer to thi quetion, but chooing the right mortgage for you largely depend on your financial profile and how long you intend to keep the houe. We recommend reviewing the feature of each kind of mortgage, then peaking with your mortgage advior, o you can feel entirely comfortable with your deciion. Q. How do I determine what price home I can qualify for? A. How much home you can afford depend on how much you earn and how much you owe, a well a your aving and the type of loan you chooe. To help you determine what you can afford, peak with a mortgage advior at your nearet TD Bank Store or at We will conider your expene in relation to your income to determine your maximum payment. Q. When hould I refinance? A. When you own your home, you may have the opportunity to manage thi important aet by refinancing your current mortgage. Perhap you need extra money for college expene or a major purchae, or perhap you are conidering an addition or remodeling. Refinancing may be the bet choice for obtaining the lowet interet rate. You may not need to pay any out-of-pocket cah in the proce. In addition, when rate are favorable, you may be able to lower your monthly mortgage payment or horten your loan term. Q. A a Firt-Time Homebuyer, what do I need to know? A. A profeional and experienced mortgage advior i your greatet aet when financing a home. Your TD Bank mortgage advior i familiar with all of our mortgage program and i committed to partnering with you to bet meet your goal and need throughout the mortgage proce. Q. Should I include homeowner inurance in my etimated monthly payment? A. Inurance i an eential part of every homeowner cot, but it i eay to overlook thee additional cot when conidering what i affordable in a houe. It i important that you conider thee neceary cot when calculating your monthly mortgage payment and that you undertand the role inurance play in the overall mortgage proce. Inurance provide important protection for both you and the lender. Viit u at for a wealth of information, including ueful calculator and frequently aked quetion. Or, call u at to peak with a mortgage advior. 22

23 Moving Checklit Quick Summary 1. Each tak i aigned a Priority of either A (Critical) or B (Recommended), o you can focu on the thing that matter mot. 2. Focu on Priority A tak firt wherever poible, followed by B tak. 3. Try etting a target date for each tak in advance, allowing more than you think i abolutely neceary. 4. Track your progre every day, and adjut your chedule a neceary. 5. Delegate tak to trutworthy family, friend and neighbor who are willing to help. The Detail The Moving Checklit i organized to group tak together to make thing eaier. 4 WEEKS PRIOR TO MOVING DAY Check Category Priority When Tak Note Done Organizing A Set the date. While TD Bank ha ome of the longet hour around, not all office do. Monday and Thurday are your bet choice to enure office are open in cae you have a problem. Arrange for utility tranfer. Notify current and future utility provider of your move date. Note when current ecurity depoit will be refunded a well a cot and due date for the new one. Thi include: Cable/atellite televiion Electricity Internet/broadband Long ditance phone ervice Recycling pick-up Security ytem Cell phone ervice Ga Local phone ervice Propane Sewer Trah pick-up Water NOTE: It a good idea to chedule utility turn-on date at leat one day prior to the move date and turn-off date at leat one day after the move to allow for emergencie or iue that may arie. File change of addre. At minimum, file a Temporary Change of Addre with the U.S. Pot Office to buy you time before you notify everyone ele. You can file online at or call ASK-USPS ( ) (both have a $1 fee), or go to the local Pot Office and complete form PS Make ure you have enough cah. Mot moving companie init on being paid in cah before they unload a ingle box. Be ure to have the correct amount with you with moving expene, depoit, tip and anything ele you ll need on moving day. B Start a change of addre log. Create a change of addre log by writing down who you receive mail from each day. Then contact thoe organization with your change of addre each morning or evening. Thi break up the tak and help make ure you aren t miing important contact. 23

24 4 WEEKS PRIOR TO MOVING DAY (CON T) Check Category Priority When Tak Note Done Organizing B Notify pecific (con t) people of your change of addre. Some of the people who might need your change of addre include: Accountant/tax preparer Alumni aociation Attorney Babyitter/child care provider Bank (auto loan, checking account, credit card, home equity, IRA, mortgage, afe depoit box, aving account) Broker Buine card (order new one) Cell phone provider Chiropractor Court, epecially for traffic ticket or local dipute Credit bureau Credit card iuer Dentit Department of Motor Vehicle Dry cleaning pick-up and delivery Family member Health club Houe cleaning ervice Houe of worhip Inurance provider (auto, health, life, other vehicle) IRS (form 8822) Lawn care Luggage tag (replace exiting one) Magazine ubcription New employer Newpaper ubcription Old employer Orthodontit Parent-teacher aociation Paport Pet itter/dog walker/pet day care Pharmacy (BONUS: get year-todate expene ummary for taxe) Phyical therapit Phyician (BONUS: get referral for new location) Pot office Profeional organization Retirement plan holder Return addre label (order new one) School (BONUS: get copie of trancript) Snow removal ervice Social Security Adminitration Swimming pool maintenance (pool cleaning, pool opening or cloing) Swimming pool memberhip Veterinarian (BONUS: get vet record and recommendation) Water delivery ervice 24