Whether a first-timer or seasoned home buyer, your home buying and selling process can be as challenging as learning a new language. Before you make your move, it's important to first understand the steps involved and the buzzwords of the "deal" to ensure the smoothest transaction possible.

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The silver linings that are emerging for buyers as a result of the changing housing market are greater selection, fewer competitive offers, and less pressure to make a snap decision. However, you should still be thinking of putting your best offer forward, since there may not be a lot of room for negotiating the price and terms. Having a knowledgeable agent who can pinpoint what amount will be met with serious interest on the seller's part is half the battle.

During the negotiation process, you have the right to include a home inspection to uncover any serious flaws in the structure. At the same time, you should appeal to the seller's desire for a quick and uncomplicated sale by coming close to all the reasonable terms of the closing requirements. Moreover, avoid sticking too many conditions in your offer. One big advantage for you as a buyer is to have preapproved financing so that the seller knows that you have the necessary funding to complete the transaction. Again, your agent can be your "wingman" as you make the "offer-to-purchase" run.

For a homebuyer, closing on a property means finally having the flexibility to build and create your own living space and, as homes typically appreciate over time, some measure of financial security.

Unfortunately though, closing also means having to comb over pages of legal documents, budgeting for closing costs, and finalizing your home financing. By being prepared before moving day, you'll make sure there are no surprises.

Paperwork
Some of the legal documents you'll need to look at on closing day include estimates, contracts, title searches, appraisals, home inspection summaries, and financial documents. Your real estate lawyer and/or sales associate should make these services available to you.

A week before you take ownership, consider coordinating a meeting where all respective agents, vendors, buyers, and your attorneys finalize closing details and documents. This step will help you avoid any surprises the day of, and ensure all paperwork is complete prior to taking possession.

When you close, also make sure to obtain the deed to your property.

Payments
Your mortgage is far from the only cost you should expect to pay when purchasing property. Other expenses may include legal fees, insurance, appraisal fees, moving fees, utility hook-ups, and depending on what state you live in, land transfer taxes.

Once you've been pre-approved for a loan, begin discussing closing costs with your Better Homes and Garden Real Estate sales associate. If you need more cash on hand for anticipated closing costs, this may force you to adjust the terms of your home financing. Putting down a smaller down payment is one way to free up some additional cash; however, it may make it more difficult to obtain financing from your lending agent. Also, consider that a smaller down payment may mean higher monthly mortgage payments. Carefully weigh these options with your sales associate and consider the length of time you intend to stay in your new home.

Additional Closing Costs
Land transfer taxes are costs many first-time buyers may overlook when purchasing a property. Whatever the amount, the trick is to be prepared.

Ask your sales associate to look at comparable sales in the neighborhood. With that information, he or she should be able to provide a fairly accurate cost estimate that will help you budget more effectively before taxes.

Adjusting to life in a new neighborhood can be stressful enough; the physical act of moving shouldn't make it worse. Ironing out the details weeks in advance will help make sure you and your prized possessions arrive at your new home in one piece.

Organizing the move
According to the US Census Bureau, an estimated 39 million Americans relocate annually, while half of all moves occur between May and Labor Day. If you're planning to move in during that time, make sure to book movers well in advance to avoid having to make arrangements around the schedules of others.

Before signing a contract, however, insist on getting in-home estimates from at least three reputable companies. While estimating your home's contents over the phone may seem like a simple way to obtain a quote, it often winds up costing more in additional fees, a scenario that can be easily avoided by scheduling face-to-face appointments.

Packing
Weeks before you move, start collecting boxes and gathering any necessary supplies (packing tape, sharpies, etc). Ideally, the boxes will be uniform so that they are easily stacked and stored prior to the day you close on your new home. When you start packing, work your way through your home, room by room, to make the task seem less onerous. If possible, spread out heavy items like books in several boxes as you may be the one lifting them.

Before buying loosefill peanuts or other packing materials, first consider what you have around the house for this purpose. Linens are excellent for wrapping and insulating delicate items, while old newspaper will help cushion plates, mugs, and cups and will more than likely ensure they arrive intact at your new home.

Insurance
Before movers start angling your widescreen TV down narrow hallways, make sure most, if not all, contents in your home are properly insured. If you're unsure, contact your insurance provider and get a list of what is covered under your home insurance. Does it cover items in transit? If not, most moving companies offer additional insurance, something you may want to consider purchasing for added peace of mind.

Also, few, if any, reputable moving companies will be held liable for the safe transport of important documents, jewelry, or currency. Pack those items yourself, and, along with any other precious keepsakes, keep them in your car to ensure they arrive safely.

Last minute
When moving, you'll likely discover items around the house that have been dormant for years. Heirlooms, collections, and other possessions with sentimental value aside, this is an ideal opportunity to clean up and donate any unwanted or unused items to a local charity. You'll not only be giving these items a second life, you'll also be limiting the time you spend creating space for them in your new home.

To encourage home buying during the Great Depression, the government created the Federal Housing Administration to provide insurance to banks on FHA-approved loans. If the borrower defaults, the bank is repaid in full and the home is taken over by HUD, the Department of Housing and Urban Development for sale. 

FHA-insured loans are known as conforming loans, with loan limits of $417,000, or up to $625,500 in high-cost areas, and $938,250 in Alaska, Guam, Hawaii and the Virgin Islands.  They have their own requirements including income verification, credit scores, and work history.  FHA loans are desirable because borrowers can finance up to 97% of the purchase price of the home, and there are ceilings on the interest rates that can be charged by banks.

A solution for non-conforming borrowers
But not every borrower meets FHA guidelines, particularly those who want to finance a larger,

more expensive home, or unique homes that are more difficult to appraise.

To serve these borrowers, lenders increasingly turned to non-government-insured loans.

Conventional loans are bank loans that are intended for purchase by the secondary market dominated by Fannie Mae and Freddie Mac. Conventional loan limits are larger and there is no interest rate cap, but their higher risk requires a bigger down payment from borrowers, usually 20% of the purchase amount.  The loans are purchased by the secondary market and packaged into securities, allowing the banks to borrow fresh money for lending by the Federal Reserve.

Many otherwise qualified borrowers were not able to qualify for these loans because they didn’t have enough to meet the down payment requirements. Private mortgage insurance (PMI) allows these borrowers to purchase a home with less down, with PMI insuring the difference.

PMI is paid to the lender at closing by a private mortgage insurance company. The borrower pays back the PMI, along with principal and interest payments.

For example, a borrower could put 10% down, and obtain a conventional 80% mortgage with PMI paying the remaining 10%. 

Eliminating PMI

What’s confusing to borrowers is that many believe the PMI should be eliminated from their loan obligations after they build equity of 20% or more, but that’s a misconception. 
Loans purchased by Fannie Mae and Freddie Mac also have guidelines, and require 30% insurance coverage if the borrower puts 5% down, 25% coverage with 10% down and 12% coverage with 15% down. The extra insurance is not only designed to cover the amount defaulted, but additional costs such as unpaid interest, legal expenses and property preservation expenses.

To have PMI eliminated, borrowers must have good mortgage repayment history as well as proof of the home’s current value, which can be determined by a professional appraiser at a cost of approximately $375-$500.  The equity in the home must have improved so that the loan-to-value ratio is 75% or less.

Borrowers may also provide a written request for cancellation of PMI if the principal balance is paid down to 80% of the loan’s original amount if the PMI is borrower-paid. Federal law also requires mortgage insurance to be canceled automatically when the borrower has paid down their mortgage loan to 78% of the original loan amount.