Home Team Advantage

When you're buying a house, it pays to have a strong lineup of specialists on your side

recommend a law firm. Many times, fees can be reduced if most of the purchasers are using the same law firm.”

Most attorneys charge hourly rates ranging from $150 to $350, but that can vary depending on the region. Some charge flat fees for specific services rendered such as preparing real estate closing documents. Ask what services will be performed for what fee.

Your local bar association can provide leads to a real estate attorney who will modify the standard contract to fit your circumstances. Check out such sites as www.rgtitle.com as well as the American Bar Association at www.abanet.org to find an attorney in your area. You might also want to contact the National Bar Association (www.national bar.org; 202-842-3900). Even when you find a lawyer, review his or her credentials and request references.

LENDERS SHOW YOU THE MONEY
As a home buyer, you have two financing options: You can work with a mortgage broker, who’ll shop for loans among many potential sources, or you can go right to the bank that will be making a loan. Lenders, naturally, advocate the direct approach.

“Financing a home these days can involve many decisions about cash, credit, and leverage,” says Jackson Cosey, senior vice president of emerging markets for Wells Fargo Home Mortgage in Des Moines, Iowa. “At a major lender, buyers may have access to innovative programs as well as educational materials.

“Buyers should shop around for the best mortgage terms,” says Melissa Hammel, a financial planner in Brentwood, Tennessee. “Sometimes a big bank might not have much room to negotiate, while a broker may be more willing to work on getting the best terms for a borrower.” Even before you consider individual mortgage lenders, you should determine how much house you can afford, what your monthly payments will be, and what the current interest rates are nationwide. All of this can be done online through sites such as www.bankrate.com.

Eubanks hired an attorney suggested by the homebuilder, and he also relied on the builder to arrange the financing. “My closing costs were reduced by more than $2,000 because I used this lender,” he says. “Yet, I can refinance the loan without a penalty if I find better terms somewhere else.”

The Garners also went with the builder’s preferred lender. “They gave us a break,” says Michael, “so we saved $3,500 toward closing costs. We chose an interest-only mortgage to get lower monthly payments. Our agreement entitled us to refinance at any time, so I’ve already started the process of switching to a conventional mortgage with principal as well as interest payments.” The Garners estimate that their house has increased in value from $250,000 to $320,000 in the year they’ve owned it, so using maximum leverage has paid off.

With interest-only loans, you pay only the interest for the first five, 10, even 15 years, thereby lowering your monthly mortgage payment. The problem is, once you begin paying principal, you’ll have to play catch up to pay down your debt before the term of the loan is up. That

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