Top FAQ's Buying a Home
When it comes to buying a home, there are many things you should take into consideration. You may even want to print off this FAQ Buying a House Guide. Of course, you need to make sure you can afford to buy a home. But, there is more to buying a home than signing your name on the dotted line. As a matter of fact, you are about to enter an entirely new world.
Being educated about the home buying process is essential. Getting answers to some of the most common questions is something every buyer should do. If you have just started to think about purchasing your first home, here are some things to think about.
1. Should I buy a home or continue to rent?
Buying a home has many advantages. Hopefully, your new home should increase in value over time. The best thing you can do is to listen to the advice of your real estate agent. He or she will be familiar with the local area and know where to invest.
Renting is a good idea if you have just moved away from home. However, ultimately, renting a home may be a complete waste of money. You could be paying for a mortgage instead of making extra money for a landlord.
If you know you want to own in the near future, it's essential to start planning for going from a renter to an owner. The more you can do to better your financial strength the easier it will be in the long run.
2. What is earnest money when buying a home?
Earnest money is often a misunderstood concept. In a nutshell, the earnest money is the funds you pay into an escrow account to show that you are genuine about buying a home. It may be as little as 1% or up to 5% depending on the local real estate market. Your real estate agent will give you all of the advice that you need, but the earnest payment is one of the most important topics in any FAQ buying questions guide.
One of the most confusing aspects for buyers is knowing the difference between earnest money and a down payment. The article at Maximum Real Estate Exposure does one of the best jobs of explaining how these things differ from one another.
3. How much of a down payment do I need?
The down payment is the funds you need to contribute on your own when you buy a house. It varies a little depending on what kind of mortgage you take out. However, you should expect to make a down payment at a minimum of 5% of the value when using a conventional mortgage.
If you are taking out an FHA mortgage, the down payment is around 3.5%. It is crucial to match your financial criteria with the right mortgage for you. Your real estate agent can point you in the right direction, but it is also a good idea to check with your bank or recommended lenders.
If you are serving or have served in the military a Veterans loan may an excellent option. The advantage of a VA mortgage is that you don't have to put any money down. Another no down payment option is what's referred to as a USDA loan. These are considered "rural loans." If you live in an area where the population is under thirty-five thousand, you might qualify for this type of loan.
In addition to saving for a down payment, make sure your financial house is in order. Getting your credit scores as high as possible is a fruitful task. The better your credit score, the more favorable loan terms you'll get. Can you get a mortgage with a low credit score? Sure, but why not do what you can to get the best mortgage rate!
4. Should I call a real estate agent before looking at homes?
Yes, you should always contact a real estate agent. This is still the best way to buy a home. You may think that doing everything yourself is going to save you money. But, in the long run, you will probably get a better deal on the house using a real estate agent.
There are many advantages to using a buyer's agent. First of all, a real estate agent will have experience in the local market. They will match you up with the right home for you, cutting out the need for unwanted viewings.
A buyer's agent will also help you to negotiate the best price and deal with any issues that come up during the house buying process. Some people think that going directly to the listing agent is what they should do. The thinking is that this will save them money - WRONG!
The listing agent works for the seller. If anything, they will discount the seller's commission if they get both sides of the sale, NOT help the buyer. Further, even if the listing agent gave you some money back, would you rather save a couple thousand and overpay for the home? I seriously doubt it!
Using a buyer's agent becomes even more vital when you are purchasing specialty property.
5. Are there any mortgage programs for first-time buyers?
Yes, there are several mortgage programs for first-time buyers. There are some federal programs, but there are also state programs. If you have a particular profession, you may also find that there are programs uniquely available to you.
A lender will give you the right advice. There are even special programs available for buyers who would like to buy a fixer-upper. Shop around to find the best deal for you or ask for advice from a real estate agent or finance company.
6. Are online estimates like Zillow accurate for home values?
The jury is still out on this issue, but more than 90 percent of the time, you see a Zillow estimate it is not the real value of the property. Sometimes the value can be off by tens of thousands of dollars. When you're interested to find out the accurate value of your house, who wants to see something off by that much?
What it does is give both buyers and sellers a false sense of what a property is worth. Working as a real estate agent, I have seen values from Zillow be off by over one-hundred thousand dollars, both high and low. Can you say ouch!
Perhaps the best way to look out online estimates such as Zillow is to compare them a game. You can have a little fun with it but, you can’t replace the know-how of a skilled local real estate agent.
7. How much will my closing costs be?
Closing costs are another expense you need to be prepared to pay. Once again, they may fluctuate depending on your mortgage provider. In general, they range between 2% to 5%. However, that being said, some programs help you to pay associated home-buying costs.
Look out for them, and you may be able to save some money. Seek the guidance of your mortgage professional as well.
8. What stays and what goes with the house? Will things like curtains and the fridge stay?
There is no way to give a black and white answer to this question. It all depends on what you agree with the seller. Some sellers will want to buy new gadgets for their home, but that is not always the case.
It may be helpful to move in and not have to worry about buying new appliances, but if any kitchen equipment in the home is more than 10 years old, it probably needs updating anyway.
The same thing applies to decor. The seller may think that he will achieve a better price when including soft furnishings, But, if they are not to your taste, it would be better to negotiate a better price instead of accepting any deals on the contents of the home.
What should be noted is that things like refrigerators and curtains are considered "personal property." They don't come with the house unless the owner includes them. If something is attached to the home, it can be assumed to stay unless otherwise noted.
9. What are the most essential inspections to have?
You need to have a full home inspection, and yes, you will be expected to pay for that. As part of any home inspection, the home inspector must pay extra close attention to areas of the home, such as the roof, HVAC system, plumbing, and wiring. These are the areas of the home that can easily cost you a lot of money to fix or repair.
You can use this checklist on home inspections to understand the process and what to expect. A home inspection is one of the most vital aspects of purchasing a home and should not be skipped. The cost of a home inspection is well worth it in the grand scheme of things.
Not only will a great inspector find all the warts but they will give you an outstanding education on how everything functions. Quite often they will share helpful maintenance tips as well.
10. How long does it take to close on a house?
Most of the time it takes between 30 to 60 days to close on a house. But it can take longer. Your real estate agent will keep the buying process on track, but you do need to be prepared for surprises. Things do happen.
A common cause for a delay is something that gets screwed up with the financing. However, most of the time, when you have a professional mortgage broker and real estate agent on your side, the process will go smoothly.
Final Thoughts
Hopefully, a review of these most frequently asked questions when buying a house has been useful. These FAQ's on home buying are undoubtedly some of the most common. If you have further questions, it is a good idea to ask your real estate agent. They will be more than happy to help you out. And no, you don’t have to worry about asking silly questions.
Real Estate agents get asked all sorts of questions on a regular basis.
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