Common Buyer Questions
What's the first step of the home buying process?
Answer: The Mortgage Pre-Approval
Unless you are paying cash for a house, you will need to get a mortgage. In order to know how much home you can afford, you will need a pre-approval letter for a home loan.
How long does it take to buy a home?
Answer: Usually 30 to 35 days
The timeline for finding a home varies from person to person however once you have an executed contract, the time frame to ownership is generally 30 to 35 days.
Do I really need a Realtor when buying a home?
Answer: Yes
When buying a home, it is strongly recommended that you have a Realtor. Attempting to buy a home without a Realtor can really make the home buying process more difficult.
Who pays the Realtor fees when buying a home?
Answer: Usually the seller
Under normal circumstances, the seller pays the Realtor fees.
Why should I buy, instead of rent?
Answer: Depends on your situation
A home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you'll enjoy having something that's all yours - a home where your own personal style will tell the world who you are.
How much money will I have to come up with to buy a home?
Answer: Well, that depends on a number of factors, including the cost of the house and the type of mortgage you get.
In general, you need to come up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement which is generally 3% to 5% of the sales price; option fee money that goes directly to the seller, and closing costs, the costs associated with processing the paperwork to buy a house. When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies.
How do I find a lender?
Answer: You can finance a home with a loan from a bank, a savings or loan, a credit union, a private mortgage company, or various state government lenders.
Shopping for a loan is like shopping for any other large purchase: you can save money if you take some time to look around for the best prices. Different lenders can offer quite different interest rates and loan fees; and as you know, a lower interest rate can make a big difference in how much home you can afford. Talk with several lenders before you decide. Most lenders need 3-6 weeks for the whole loan approval process. Your real estate broker will be familiar with lenders in the area and what they're offering. Therefore, feel free to ask me for a list of preferred lenders.
So what will my mortgage cover?
Answer: Principal, Interest, Taxes and Insurance
Most loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year.
In addition to the mortgage payment, what other costs do I need to consider?
Answer: Utilities, HOA fees, and general maintenance
Your real estate agent will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner association or condo association dues. You'll definitely have property taxes, and you also may have city or county taxes. Taxes normally are rolled into your mortgage payment. The upkeep of your home is an added cost to consider as well.
When do I get the keys?
Answer: At closing
In a normal situation, you will get the keys at closing which takes roughly an hour. In most cases, the lender will need time to fund the loan and you will need to pick up the keys after the loan has been funded. Therefore if it is a Friday closing date, you might not receive the keys until the following Monday.
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