- Why should I buy a home instead of renting?
- Number 1, you will have a sense of personal satisfaction in owning your own home. You will be able to create your own private space that is unique to you. When you own, you can do it all your way! Another benefit of owning is that you can deduct the cost of your mortgage loan interest from your federal income taxes. In the beginning, interest will compose nearly all of your monthly payment, for over half the number of years you will be paying your mortgage. This can add up to BIG savings at the end of each year. You are also allowed to deduct the property taxes you pay as a homeowner. Another financial plus of owning a home is the possibility of the home increasing in value over time. If you rent, you write your monthly check and it is gone forever. At the end of your lease, you have nothing and face the possibility of increasing rental rates.
- Can I apply for a loan before I’ve found a property?
- Yes! You have the opportunity to get pre-approved for a mortgage today. A pre-approval will take into consideration your personal information such as income, debt, and credit history. If you receive a pre-approval, we will use this information to determine your maximum loan amount. Once you find a property, we can complete the remaining parts of the application.
- Do I need to sell my existing home before I apply for a new mortgage loan?
- The answer to this question is “No.” You can apply for a new mortgage loan before you sell your current home. However, depending on your income and debt levels, you may be required to sell your current home before you can close on your new loan.
- How do I know if I can get a mortgage loan?
- If the amount you can afford is significantly less than the cost of homes that interest you, you might want to wait a while longer and save up your money. But before you give up, why don’t you contact us? We may be able to help you evaluate your loan potential and help you find something that fits your budget. I know about many kinds of mortgages the lenders are offering, and I can help you choose a lender with a program that might be right for you. Another good idea is to get pre-qualified for a loan. That means you go to a lender and apply for a mortgage before you actually start looking for a home. Then you will know exactly how much you can afford to spend, and it will speed up the process once you do find the home you want to buy.
- If I have poor credit and don’t have much for a down payment, can I still buy a home?
- There are many programs available that may allow you to buy a home. You may be a good candidate for one of the federal mortgage programs that are available. A good place for you to start is by contacting one of the HUD-funded housing counseling agencies. They can help you sort through your options. In addition, contact your local government to see if there are any local homeownership programs that might work for you.
- If I can finance 100% of the sales price, why can’t I finance the closing costs on a VA loan?
- The Veterans Administration does not permit the loan amount to exceed the value of the home. Therefore, 100% of the sales price can be financed, but all other costs must be paid at closing.
- When I find the home I want, how much should I offer?
- Is the asking price in line with prices of similar homes in the area? Is the home in good condition, or will you have to spend a substantial amount of money making it the way you want it? You should get a professional home inspection before you make your offer. I can help you arrange one. How long has the home been on the market? If it’s been for sale for a while, the seller may be more willing to accept a lower offer. How much mortgage will be required? Make sure you can really afford whatever offer you make. How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted. In some cases, you may even want to offer more than the asking price, if you know you are competing with other buyers for the house.
- What is earnest money?
- Earnest money is the deposit you make on the home when you submit your offer. Earnest money proves to the seller that you are serious about wanting to buy the 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.
- What if my offer is rejected?
- A buyer’s original offer is often rejected for one reason or another, but don’t let that stop you. Now you begin negotiating. I will help you. You may have to offer more money, but you may ask the seller to cover some or all of your closing costs, or to make repairs that would not normally be expected. Often, negotiations on a property go back and forth several times before a deal is made. Just remember, don’t get so caught up in negotiations that you lose sight of what you really want and can afford.
- What will happen at closing?
- At the closing, you will most likely sit at a table with me, the broker for the seller, probably the seller, and a closing agent. The closing agent will have a stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you may want to take the time to read each one and/or consult with me to make sure you know exactly what you are signing. After all, this is a large amount of money you are committing to pay for a lot of years! Before you go to closing, your lender is required to give you a booklet explaining the closing costs, a “good faith estimate” of how much cash you’ll have to supply at closing, and a list of documents you will need at closing. If you do not get those items, be sure to call your lender before you go to closing. Be sure to read the HUD booklet on settlement costs. It will help you understand your rights in the process. Don’t hesitate to ask question. I will be happy to answer them to the best of my ability.
- Can I bring a personal check to a property closing?
- No, you will need a cashier’s check or certified check for closing. This is to ensure that the funds are equivalent to cash.
- What are closing costs?
- Closing costs are the fees and expenses associated with processing the paperwork to buy a home, lot, or other real estate. Closing costs that you will pay at settlement average about 3-4% of the price of your home. These costs cover various fees your lender charges, and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won’t be caught by surprise.
- Where do you go to close on a property?
- You will go to the offices of a local title company or attorney who will perform the closing. All your mortgage documents will be waiting for you at closing, as well as any other documents requiring your signature.
