When you are ready or looking into to buying your first home you may be wondering about the entire process. It is a huge responsibility to take on a mortgage payment and the care of your new investment. You need to be prepared to go through a lengthy process. You can prepare to go through the process by learning the answers to many of your questions here on our first time home buyer FAQ.
How many homes should I see before making an offer?
This question is completely up to the individual. While home shoppers these days can look at hundreds of homes online using our MLS Home Search, they usually only view around 10. But keep in mind, this varies tremendously for each person. Some are eager to find their home within hours of hunting online and selecting the few they see fit. On the other hand, it can take months and 100 showings. Our tip would be if you want to expedite the process, it can be very helpful to hone in on a particular neighborhood(s). However, if you feel limited by your options, it may be time to explore surrounding areas.
How much do I need for a downpayment?
Saving for the down payment is the greatest obstacle for first-time homebuyers. Lenders expect between 5% to 20% for a down payment. It varies according to the lender’s requirements, and the type and length of the loan. Make a budget, set a goal, and stick with the plan. Saving and sacrificing is how most people come up with their first down payment.
What is the difference between Pre-qualified and Pre-approved?
Pre-qualification: Getting pre-qualified for a mortgage gives first-time homebuyers an indication of how much they “might” qualify to borrow. This mortgage amount is not guaranteed because no information has yet been verified. A letter from the lender may only state that you are “likely” to be approved for a mortgage.
Pre-approved: Better yet is getting pre-approved for a mortgage, which is based on a real credit score, and it also puts real estate agents and home sellers at ease. The buyer has more to offer when making a deal and in a competitive market this can be a definite plus.
Why should I work with a REALTOR®?
A REALTOR® is a licensed real estate professional belonging to the National Association of REALTORS® (NAR). NAR is a real estate trade association that requires all of its members to follow a 17-article Code of Ethics. This means that your REALTOR® is required to have your best interests in mind.
What are my loan options as a veteran or an active member of the military?
A VA loan is provided to veterans, active members of the military and their families by the U.S. Department of Veterans Affairs. VA loans are typically associated with a lower interest rate and do not require a minimum credit score. The VA can also help veterans negotiate and provide assistance if you default on a loan. Learn more about the resources available to service members and veterans.
What should I expect when making an offer?
Every home closing is different. In general, you'll work closely with your REALTOR® to put an offer on the table that has a chance of getting accepted. If the market is competitive, you may need to be prepared to make an offer the day you tour the home. It is also possible that you will need to make a few counter offers or negotiate with the seller before closing on a home.
Once your offer is accepted, you will need to get the home appraised and go through a home inspection. The appraisal will tell you the value of your new home and you may enter another round of negotiation if you initially agreed to more than the appraised price. Similarly, if your inspection shows any issues with your home, you may be able to negotiate so that the original owners pay for some of the damages. After your offer is accepted and you finish settling your terms with the seller, your REALTOR® will make the closing process as simple as possible.
What should I know about credit and down payment assistance?
Your credit score will inform what loans you can qualify for, and this may impact your chances of closing on a house. Credit scores range from 300 to 850. Typically, taking out a loan on your mortgage will require a score above 500. However, it is possible to take steps to improve your credit score, as well as to qualify for loans with a lower credit score.
We would strongly recommend getting pre-approved for a mortgage before starting the search process. You want to be able to offer on the house you have your heart set on and the only way to do that would by being pre-approved. Once you have the pre-approval, you’ll know how much you can afford and can start the fun part! We have complied a list of lenders that we have been working with for many years and highly recommend, click the button below to view our recommendations.