Common Home Buying QuestionsPosted on 10/21/2015
Are you thinking of buying your first home? Congrats! Your first real estate transaction is exciting but terrifying at the same time. Knowing the answers to the below questions can help remove some of the stress. Remember a good agent can make this process a lot easier.
- Where do I begin?: The first step is getting pre-approved for a home mortgage. Unless you are paying cash, you need a mortgage. By getting pre-approved you know how much you can afford.
- Hong long will it take?: The time varies from person to person. Once your offer gets accepted your agent can give you a estimated timeline.
- What does your Realtor do? He/She will help guide you throughout the entire process. They do a lot more than just walking through the homes with you. In short they educate you on different options and represent you. Just because someone is the listing agent does not mean they have to be your agent.
It is important to note the difference between a Realtor and a real estate agent. A Realtor subscribes to a strict code of ethics and is regulated by the National Association of Realtors.
- How much do you pay a realtor? Nothing! While many people give the realtor a gift ( ex: nice bottle of wine) after closing it is not mandatory. A realtor gets paid from the seller.
Before listing a home the agent and seller agree on a commission. Then the listing agent pays the buyer's agent for bringing the buyer.
- What should my credit score be? The higher your credit score, the lower your interest rate. The minimum score needed for approval is constantly changing. Your loan officer and agent will be your best source.
To help your credit score pay bills on time, do not cancel any credit cards and avoid major purchases.
How much money do I need for the down payment? The amount needed depends on the loan type. The average is 3-5% of the purchase price. USDA and VA loans require no money down.
Are they any other cost besides the down payment? Yes there are other cost besides the down payment. The down payment though is typically the largest with loan origination being the second largest. Loan origination is typically 2-4% of the loan amount. Other cost include: Earnest money, moving expenses, home inspection ( optional but highly recommended ).
When do I receive the keys? In most cases home buyers receive the keys at closing.