- 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 to get pre-approved for a
loan. This is the first-step in the home buying process.
- How Long Does it Take To Buy a Home?
- Answer: Around 30 days
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.
- What Does A REALTOR® Do?
- Answer: Almost everything.
A
REALTOR® is your most valuable asset when buying a home. They will walk
you through every part of the home buying process. They will educate and inform
you of all your options. They will represent you throughout the transaction and
beyond.
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. A real estate
agent does not. It is recommended that you work with a licensed REALTOR® to
avoid potential problems.
- How Much Do I Have To Pay a REALTOR® as a Homebuyer?
- Answer: Nothing
In
most cases, you do not have to pay your REALTOR® anything to help you
purchase a home. The sellers pays their REALTOR® a fee, and then that
listing agent pays the buyers agent for bringing the buyer and facilitating the
transaction.
- What’s Your Best Advice for First-Time Homebuyers?
- 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 hundreds (maybe thousands) of properties. We know
what to expect and what to look out for. Friends and relatives have only bought
and sold a few homes, if any at all. Buying and selling a couple of homes does
not make someone a well-rounded source of information. Be confident in your decisions and trust the
professionals.
- What Kind of Credit Score Do I Need to Buy a Home?
- Answer: 620+
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.
- Are There Special Home Buying Programs That I Should Know About?
- Answer: Yes
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.
- How Much Money Do I Need for a Downpayment?
- Answer: It depends on your loan type. Usually 3% to 5% down.
The
most common answer is 3% to 5% of the purchase price. FHA loans 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.
- What Other Fees Are There, Besides the Downpayment?
- Answer: Mainly loan origination and closing costs.
The
downpayment is usually the largest cost associated with buying a house. Lending
fees are the second largest costs to homebuyers. 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.
- When do I get the keys?
- Answer: At Closing
Under
normal circumstances, you will get the keys at the closing. A closing typically
takes about an hour. In some 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. If you
have a Friday evening closing and the loan cannot fund until Monday, you may
not get the keys until Monday. Make sure to coordinate your closing to get the
keys on the same day, if that is what you need.*
*Article Courtesy of GreatColoradoHomes.com.
