What’s the first step to buying a home?
The first and most important step is to speak with a mortgage professional. They can help you not only understand how much you can afford yet how much you really want to spend in a monthly payment. They can also go over scenarios of down payment options and what’s the best plan for you to take from a financial perspective. Knowing that a $10,000 in sales price increase will change your mortgage payment by a certain amount is very helpful when you are able to spend more yet thinking of paying less to keep you monthly payment down. This process does not take long at all and we can help get you connected with a trusted mortgage professional. They are a very important piece of this process and we need to make sure you are using someone that is knowledgeable and will ultimately help you finance and close on your new home.
What’s the next step to buying a home?
Once you know your numbers from the mortgage professional, then it’s time for us to meet! Based on what you are approved for and want to spend, we can create a home buying game plan around that. Not only do we need to know how much price point you want to spend, yet all of the other important criteria like area, property type (single family or townhome/condo), space information and more! We’ll then help set up a home search, help identify properties that would meet your needs and meet to show you them in person.
How long does it take to buy a home?
Once you have find the right home, made an offer and go officially under contract (all parties agree in writing), then it typically takes 30 days to close on a home. Sometimes we can push that time frame out and sometimes we can shorten it – depending on the situation at hand.
What is Earnest Money?
Earnest money is money that you put down as soon as you go under contract. Typically, this is 1% with resale homes. New construction is different and depends on the builder’s requirements and usually more than what is expected in the resale world. This money gets deposited immediately and held in an escrow account. It is then used at closing (upon the direction of your lender to the attorney) and will be used towards your bottom line number due at closing.
Is a new home better than a resale?
A new home is not necessarily better than a resale. In fact, new homes are averaging more per sq ft than a resale. With a new home, you are the first owners, and everything is brand new. With a resale, you may be the 2nd owner or more. The beauty of the resale home is the previous homeowners have done things to the home and property that may not have been done when they purchased such as blinds, landscaping, outdoor entertainment and fencing. All of those items add up and can become a benefit to you to purchase as a resale vs new. However, we do find there are certain home buyers that need new and sometimes that’s for allergy reasons or other things. So, bottom line, whatever is best for you! We can assist with any new home or existing (resale) home and will always be looking out for your best interest in the home purchase.
What happens if the home does not appraise?
With a resale, you will have an appraisal contingency of anywhere between 21-30 days (whatever is negotiated when you make an offer and go under contract). The lender will need to have the appraisal performed with report back and delivered to you before your appraisal contingency has expired. If in the event the appraisal came in lower than the sales price, we can go back to the seller and request a reduction in sales price. That is all negotiable as well. The seller may agree or may request that you assist with some of the difference. You have the ability to walk away if you cannot come to an agreement and receive a full refund of your earnest money if you are within your appraisal contingency period.
What are closing costs?
Your mortgage professional will share with you all the numbers for closing costs. Closing costs are lumped into two categories in their mind which are the fees you pay for the mortgage side and the fees that are paid to set up the escrow accounts (pre-paid taxes and insurance) if you are not putting down 20%. You can still escrow if you put down 20% yet you do not have to. So, when a real estate agent says, “closing costs” the agent is referring to all the fees so make sure that the lender has broken down all of your fees that could be part of your closing. This will help you understand what money you will need to bring to closing above and beyond your down payment and will help us if we want to negotiate that the seller pays some of your closing costs as part of the transaction.