What To Know Before Starting The Home Buying Process

Before shopping for a St. Louis or St. Charles County home, there are some important things you should know. Once you’ve learned how to start the home buying process, you’ll be better able to get the right home at the right price. Consulting a qualified lender to find out how much house you can afford and getting preapproved for a loan is always a good place to start. Below we’ve put together a list of frequently asked homebuyer questions and our answers to help you prepare and start the home buying process on the right foot.

 

How much house can I afford?

When determining how much you can afford, one must look at savings, income and the current interest rates to figure the maximum price you can spend on a home. Most lenders recommend that you spend no more than 28% of your monthly income on mortgage payments. Also, don’t forget to consider any monthly fees that may be included if you choose a condo/low maintenance lifestyle.

 

What are the current interest rates?

Interest rates fluctuate daily based on the market and your individual rate will additionally be based on your credit history. Talking to a qualified mortgage loan officer will help you determine your rate. Contact The Boehmer Team if you would like the names of some reputable mortgage loan officers in St. Louis City, County, St. Charles County and surrounding areas in Missouri.

 

What is an appraisal and how much does it cost?

An appraisal is a valuation of a property that determines property value for tax and home loan purposes. Currently an appraisal costs between $350-$500 in the St. Louis, Missouri area.  This is considered part of your closing costs. Keep in mind that prices may vary depending on the size of the home and the amount of land included.

 

What inspections will be required & how much do they cost?

A building inspection is the best opportunity to learn about your new home. This tells the buyer about the condition of the mechanical systems, roof, plumbing and electric just to name a few. Currently in the St. Louis, Missouri area a building inspection runs approximately $500-800 and is based on the sale price of the home.

 

Additionally, you can get termite inspections ($80-$100) and radon inspections ($100-$150). There are several other items that you can also inspect for including sewer laterals, septic systems, swimming pools, wells and environmental testing if desired.

 

What is a home closing?

The home closing is the final transfer of the ownership of a house from the seller to the buyer, which occurs after both have met all the terms of their contract and the deed has been recorded. This term can also be used to explain the timing of when the deed/ownership of the house will be transferred to the new owners. The closing usually takes place at the office of someone like a title officer, escrow officer, or real estate lawyer (someone who is licensed in initiating the transaction and purchase agreement).

 

How much will the closing costs be?

The amount of closing costs will depend on the amount of points a buyer will be paying with their mortgage loan. (Each point is 1% of the mortgage loan amount). Closing costs vary depending on the type of loan you are using.  They can include title fees, origination fees, pre-paids including insurance, setting up your escrow account and survey to name a few. Depending on the loan amount and loan type, closing costs usually run approximately 2-3% of the loan amount. Your loan officer will be able to give you more accurate information on what your total closing costs will be.

 

I’m also thinking of buying a car, a boat or other big-ticket item. Should I wait?

Do NOT make any large purchases while in the home buying process as it could affect your ability to get a mortgage loan. Consult your loan officer before opening any charge cards and obtaining any other type of loan or credit.

 

 

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Now that you have the information you need to start the home buying process visit TheBoehmerTeam.com to see homes currently for sale in the St. Louis and St. Charles County areas of Missouri. You can narrow the results by the area and price range of your choice in addition to many other advanced features. Our website gets listing updates multiple times daily and has features like saved search, saved favorites and email notifications of new homes that meet your criteria as the come on the market. Contact us if you have any questions about the home buying process.

 

Mortgage Loan Products For Buying A Home

There are great programs to help those who want to buy a home get a mortgage. Having trouble putting together the down payment? There are also programs available to assist with down payments. And if you are a veteran, physician, physician’s assistant, nurse practitioner, RN, pharmacist, veterinarian, dentist, dental surgeon, CPA or attorney there are even more options available with Professional Loan Programs. Below are some of the more popular mortgage products currently available.

 

Basic Federal Housing Administration (FHA) Loans

Not only are FHA loans great for first-time homebuyers they are also available for existing homeowners. Interest rates are typically the same as conventional loans, making FHA loans a very affordable option, especially for borrowers without the ability to make a large down payment. Another feature of FHA loans is that they are assumable. This means when a seller with an FHA loan sells the property, the loan and its financing terms (interest rate) can be transferred to the new buyer - a feature that will certainly make a property more intriguing in times of rising interest rates.

THE BENEFITS OF AN FHA LOAN

• As little as 3.5% down payment

• Down payment gift allowance


• No maximum income restrictions

• Flexible credit requirements

• Transferable interest rates


• FHA is more forgiven than a conventional loan on bankruptcy


• FHA is more forgiven than a conventional loan on foreclosure


• Loan to value up to 96.5%


• Higher debt to income ratios (over 50% with AUs approval) with compensating factors


• Credit scores down to 600


• Better interest rates than conventional if credit history is not the best

• gift funds accepted


• Down payment assistance accepted

BASIC LOAN AMOUNTS

• $472,030 - single-family home (Based on most St. Louis metro areas. Loan Amounts may vary by home location.)

ELIGIBLE BORROWERS

• Borrowers must be occupants. Non-occupant co-borrowers allowed

• Typical qualifying ratios: Housing - 31%, Total Debt - 43%

• Permanent resident aliens


• Non-permanent resident aliens

95% Conventional Loan

The 95% Conventional Loan is the best alternative to FHA financing. In some cases, the ENTIRE 5% Down Payment is allowed to be a Gift.

•   No Income Limits 


•   No Higher Rate 


•   No Homeownership Course 


•   Mortgage Insurance may drop at 78% 
Loan to Value (LTV) 


Gift funds are allowed for entire down payment if:

• DTI (Debt to Income) less than 50%


3% Down Loan     

3% down purchase loan is part of an ongoing effort to expand access to credit for creditworthy borrowers and support sustainable homeownership.

Guidelines:

• Standard Purchase Transactions
• If one of the borrowers is a first-time home buyer (FTHB/Not owned a home in the past three years), and their income is below 80% AMI, there is an opportunity for reduced rates and mortgage insurance
• All loans must be fixed rate
• 1 unit principal residence
• 35% mortgage insurance
• Does not cover manufactured homes

USDA 100% Financing Loan

Those looking to occupy residence in some areas may qualify for a USDA Loan. In many cases the property only has to be located outside a metropolitan area. Along with location, a few other items for eligibility criteria include household income, household dependents and credit history. These guidelines are detailed and may differ from county to county.  

Guidelines:

• 100% financing available
• Up to 102% financing (with funding fee)
• No maximum seller concessions
• Gifts funds allowed for purchase loans
• Primary residence only
• Closing costs may be financed up to 100% of appraised value
• No county loan limits
• New and existing homes are eligible
• No in-ground pools
• No manufactured homes
• Minimum credit score of 680
• New funding fee 0.35% as of 9/1/2023

100% Financing Loans St. Louis Metro Area

Household Income Limits (As of 9/1/2023)

1-4 Persons : $115,000

5-8 Persons: $152,000

Bridge Loan

Bridge financing is for prospective borrowers who want to use the lendable equity in their existing residence as a down payment for the purchase of another property. A bridge loan program first encompasses a lien on the borrower’s existing primary residence to be sold. Then a separate, permanent loan will be made on the property to be purchased.

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Loan information provided by Jeff Griege, Vice President at Paramount Bank. All loans are subject to updated guidelines by lenders and qualification for approval. Check with your preferred lender for their latest mortgage program guidelines and qualifications.  

 

For more information on types of mortgage products, obtaining a mortgage, receiving down payment assistance or to be put in touch with a qualified reputable lender, contact The Boehmer Team. We can recommend experienced mortgage loan providers in the St. Louis or St. Charles County areas of Missouri. 

 

Using a REALTOR to Buy a New Construction Home

One of the most common questions we are asked is “Do I need a Realtor to represent me when purchasing new construction?”  The answer is pretty simple. While it is not required that you have representation, a Realtor can play a valuable role in your purchase of new construction. Whether you are buying new construction or an existing home in the St. Charles County or greater St. Louis area, The Boehmer Team realizes the importance and value of the Realtor in every step of your home purchase. 

Building your own home is an exciting yet sometimes complicated process. There are many details to consider - from choosing the right builder to calculating costs and finding the best community for your needs. The Washington Post says when, “buying a new constructed home, an experienced real estate agent is essential.”

The Boehmer Team is specially trained in the new construction field. We have worked with builders in the St. Louis County and St. Charles County areas of Missouri for years. We will work with you and your builder towards a smooth process every step of the way.  A good real estate agent can make the new home buying process a dream come true versus a job.

Here are some ways a The Boehmer Team can assist you specifically with your New Construction purchase:

• Assistance in selecting the community and neighborhood that best meets your needs and that of your family.  Important factors that many homebuyers consider include: school districts, community amenities, access to shopping and recreation. 
• Help with home site selection including its location within the community, the size of the lot, facing direction, orientation, and surroundings are all evaluated.
• Determining which structural features are most important to you and what features are will benefit you for a future resale. 
• Assistance choosing colors and materials for interior and exterior finishes.
• Explanation of construction progress and terminology as well as assistance in managing expectations.
• Understanding the value of surrounding homes and comparable homes so that you pay fair market value for your new home.
• Offering objective professional advice and insight during all phases of the process.

 

Contact The Boehmer Team today if you are considering a newly constructed home or have additional questions regarding buying or selling a home. Or visit our website TheBoehmerTeam.com and check out our pages dedicated to new construction in the area.

 

Answers to Homebuyers’ Most Asked Questions

Every homebuyer is going to have questions when going through the process of buying a home. Knowing what questions to ask and taking into account the answers will empower buyers to make the right decisions for their situation. The Boehmer Team has years of experience helping buyers with answers to the important questions that arise during the home buying process. 

What is the best way to begin the home buying process?

The best way to begin the home buying process is to get pre-approved for a mortgage loan by a reputable local lender. Getting pre-approved before shopping for a home will help you determine how much you can afford and will show sellers you are serious and capable of purchasing their property when you make an offer. The Boehmer Team feels it is important that the lender you choose can be reached easily and is readily available with answers to questions based on your individual needs.

What is this property really worth?

Real estate agents cannot ethically tell a client what to offer for a home. However The Boehmer Team can look at dozens of comparable properties for sale, along with recently sold properties to help determine value. They will look at updates, custom features, lot size, location and more. They can also tell you how long homes in the area are staying on the market and the percentage of asking price that sellers are getting. 

What is the best way to begin the home buying process?

Not all sellers are willing to negotiate asking price or assist with any closing costs. If your strategy is to make low offers, be prepared to make several offers on properties before finding a seller willing to bargain.  Ultimately it is more important to pay market value than a price with an emotional tie to it or unrealistic price based on what a seller still owes on the property. If you are simply looking for a great deal you can always look at foreclosures and fixer-uppers. 

What’s wrong with this house?

The seller says everything is perfect, but unless it is new construction that is rarely the case. The Sellers Disclosure document should contain information on the age of the roof, the age of the appliances, the type of foundation and more. Any other issues most often will appear on a home inspection. The Boehmer Team highly recommends getting a home inspection for any home purchase. Buyers also can also get radon, termite and other building inspections. If a buyer still has a question about a home that is not disclosed, ask the seller directly.

Is this home on a floodplain?

FEMA provides free online maps that show if a home falls within a flood plain. There are different types of floodplains that require different types of insurance. The Boehmer Team can recommend companies that offer flood insurance for different situations. 

Do you have the receipts and warranties for the home’s mechanical systems?

This is not something that buyers have much control over. If a seller purchased a new furnace before putting the home on the market and doesn’t leave any information on where the furnace was purchased, the buyers won’t have many options if the furnace malfunctions. However a home warranty can be purchased at a reasonable yearly fee to cover these types of situations and offer peace of mind.

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When you are ready to buy a home talk to The Boehmer Team. Experience and knowledge have made The Boehmer Team one of the top real estate teams in Missouri. They can help get the answers you need to make the best decision for you.

Questions to Ask a REALTOR® When Listing Your Home

If moving is on your mind, you should talk to a REALTOR. An experienced local real estate agent can answer all your questions. But do you know what questions to ask? To help, we've made a list of questions to ask a REALTOR when listing your home.

How should I price my home?

This is a question that no online estimator or Zillow “zestimate” can answer accurately. It is imperative that you speak to an experienced REALTOR for correct pricing. A REALTOR has access to the most current information on the local market and can take into account upgrades and high-end finishes comparable to your recent neighborhood home sales to get you the most accurate price. Expect the REALTOR to share their research and data with you so you can better understand their findings and price suggestions. A quality Realtor should want to review the details with their sellers.

How many sales did you complete last year?

Did you know that the average real estate agent only sells about 6 homes a year? An agent/team that works with a higher volume of clients makes more buyer and seller connections that help sell homes quicker. For the last 7+ years The Boehmer Team has consistently closed over 300 home sales per year. This is why we are the top real estate team in St. Charles County.

What is your marketing plan for my home?

A quality marketing plan should include a variety of strategies to reach other agents as well as consumers searching for homes.  The Boehmer Team's “Maximum Exposure Marketing Plan” encompasses various tools and resources which have proven to be successful in the home selling process. During their listing presentation, The Boehmer Team will thoroughly review the full marketing plan.

How many websites will include information about my home?

Hundreds. The Boehmer Team’s listings are submitted through Maris MLS IDX feed to all local area real estate company websites. In addition, your listings are submitted to the major national websites and promoted through the BHHS Select Properties Relocation Program as well as numerous social media platforms.

Do you have advice for me about the condition of my home?

The Boehmer Team assists home sellers in determining small tweaks or updates that may result in higher net profit from their home sale. We'll share our experience of what buyers are looking for to help you make your home the most valuable in their eyes.

Can you recommend contractors and moving companies?

During our numerous years in the real estate business, we have gathered quality resources that can assist both buyers and sellers in the home sale and moving process. We are full service Realtors, at your service for life.

Why should I hire you or your team to sell my home?

Any quality agent or team should be prepared to handle and answer this question. For more information on why The Boehmer Team is your best choice in listing your home, contact us today!

 

 

How to Know If Your Insurance Covers Sump Pump Failure

Spring weather in the St. Charles County area of Missouri often brings heavy rain, which can lead to flooding and potential damage to your home. If you have a sump pump, it can help prevent water damage, but what happens if your sump pump fails? Does your insurance policy cover it? Here's what you need to know to make sure your home is protected.

Does Homeowners Insurance Cover Sump Pump Failure?

The answer to this question depends on your insurance policy. Most standard homeowners insurance policies do not cover sump pump failure. However, some policies may offer an endorsement or rider that provides coverage for sump pump failure. It's important to review your policy carefully and speak with your insurance agent to understand if you have this coverage.

What is Sump Pump Failure Coverage?

Sump pump failure coverage is an add-on to your homeowners insurance policy that covers damage caused by a malfunctioning sump pump. This coverage typically includes repairs to the pump, as well as damage caused by water that enters your home as a result of the failure.

If you live in an area that is prone to flooding or heavy rain, sump pump failure coverage may be a wise investment. It can give you peace of mind knowing that you are protected against potential water damage.

What to Do If Your Sump Pump Fails

If your sump pump fails, it's important to act quickly to prevent water damage to your home. Here's what you should do:

• Turn off the power. Before doing anything else, turn off the power to your sump pump to prevent electrical shock.
• Remove the water. Use a wet/dry vacuum or a pump to remove any standing water from your basement or crawl space.
• Call a professional. Contact a plumber or sump pump repair specialist to inspect and repair your pump.
• Contact your insurance company. If you have sump pump failure coverage, contact your insurance company to file a claim.
  
  

What Else to Consider

In addition to sump pump failure coverage, consider doing the following to protect your home from potential water damage:

• Seal cracks and leaks. Make sure your basement or crawl space is properly sealed to prevent water from seeping in.
• Elevate your belongings. Consider elevating your belongings off the ground in case of flooding.
• Install a backup sump pump. A backup sump pump can help prevent water damage in the event that your primary pump fails.
• Clean your gutters on a regular basis.
• Purchase a water sensor for early detection.
• Create an emergency plan. Have a plan in place in case of flooding, including a list of emergency contacts and an evacuation plan.

Remember to beware of flooding around or in your home as water damage can be costly to clean up. If you have a sump pump, it's important to understand if your insurance policy covers sump pump failure. Review your policy carefully and speak with your insurance agent to understand if you have this coverage. If not, consider adding sump pump failure coverage to your policy for added protection. And remember to act quickly if your sump pump fails to prevent water damage and protect your home.

What An Insurance Agent Says About Sump Pump Coverage

Stephen Willet, local St Charles County insurance agent with State Farm says:

“With the rainy season upon us, it is important that you review your homeowners coverage with your insurance agent and keep up with the general maintenance on your home. We always recommend taking a look at the endorsements (optional coverages) that are available on your homeowners policy. My State Farm agency always recommends that our customers carry an endorsement called: Back-Up of Sewer Or Drain. This endorsement provides coverage in the event that the sewer pipe or sump pump in your home backs up and leaks out into the basement. This coverage is extremely important for those that have a finished basements or use their basement for storage. These types of claims can cost thousands of dollars just to clean up the water and sewage, so make sure you take out the maximum amount your company offers.”

Willet also notes that aside from making sure your coverage is where it needs to be, make sure that you try to mitigate the chance for water loss to your home. When water that enters your home from the outside is considered flood and is only covered through a FEMA flood policy and not your homeowners insurance.

If you have other questions about home ownership, repair or remodel options you are considering to improve your home’s value, or if you’re considering buying or selling real estate, contact The Boehmer Team. We are here to support the homeowners in our St. Charles County communities.