1) What’s the first step to buying a home?
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 to get pre-approved for a loan.
2) How long does it take to get a home?
Answer: It depends. 30-90 days to find it, then 30-45 days buy it.
The timeline for finding a house varies greatly from person to person. Once you find a house and have an accepted offer, it usually takes around 30 days to close.
3) What Does a REALTOR® Do?
Answer: Almost everything.
A REALTOR® is your most important resource when buying a home. They walk you through every step of the home buying process. They will educate and inform you about all your options.
4) What Does It Really Mean To Be Represented By A REALTOR®?
Answer: It means having an advocate during the process.
There is a difference between a REALTOR® and a real estate agent; many people do not know this. A REALTOR® is regulated by the National Association of REALTORS® and subscribes to a strict Code of Ethics. They have a fiduciary responsibility to protect your best interests. A real estate agent does not. It is recommended that you work with a licensed REALTOR® to avoid potential problems.
5) How much does a REALTOR® cost?
Answer: For a home buyer – nothing.
In most cases, you do not pay your buyer’s agent anything to help you purchase a home. The buyer’s agent is paid by their real estate brokerage, who collects payment from the sellers real estate brokerage.
6) What’s your best advice for first time home buyers?
Answer: Trust the Professionals.
Beware of advice from people who do not work in the industry. Real estate is a popular topic and almost everyone feels like they have some great insight to offer.
In reality, the people who know best are the people that work in the business. Good REALTORS® have sold millions of dollars in real estate. We know what to expect and what to look out for.
I’ve seen too many first-time buyers become persuaded by well-meaning friends and family, only to be disappointed later when they discover the truth.
7) What does my credit score have to be in order to buy a home?
A 620 credit score, or higher, is recommended. As you are probably aware, a higher credit score offers better lending terms. This is an ever evolving topic, however, as loan requirements are constantly changing. There are some lenders who will approve buyers with a 580 score, sometimes even lower. Your loan officer will be the best source to give you a current answer for today’s lending requirements.
8) Are there any special loan programs I should be aware of?
There are some great home buying programs to research. The main ones would be VA loans, USDA loans, and FHA loans. Knowing the difference between these loan types is very important. There are a wide array of local and state down payment assistance programs as well. Talk to your loan office for more information
9) How much money do I need for a down payment?
Answer: It varies based on your loan type. Usually 3% to 5% of the purchase price.
The most common answer is 3% to 5% of the purchase price. FHA loans just dropped their requirement from 3.5% to 3.0%. There are also some conventional loans that only require 3% down. Veterans are usually eligible for a VA loan, which requires no money down. Properties in rural areas are usually eligible for a USDA loan, which also requires no money down.
10) Are there any other fees besides the down payment?
Answer: Yes. Lots of them. Mainly loan origination and closing costs. But most can be rolled into the loan and don’t come out of pocket.
The down payment is usually the largest cost associated with buying a house. Lending fees are the second largest costs to home buyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees, depending on the loan type. Conventional loans usually have lower loan origination fees, but require more money down. Your loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs.