Do you have questions about buying a home? If you are a first time home buyer, the info contained here is a great start!
Q: What’s the first step of the home buying process?
A: Getting pre-approved for a mortgage. Unless you are able to pay cash for a house, you’ll need to get a mortgage. In order to know how much you can afford for a home, you will need to get pre-approved for a loan. This should always be the first step in the home buying process.
Q: How long does it take to buy a home?
A: The average time of closing on a home is around 30-45 days. The timeline is going to vary from person to person but once you find a house and get your offer accepted, it usually takes about 30 days to close.
Q: What does a Realtor do and do I need one?
A: A realtor is going to be your most valuable asset when it comes to buying a home. They are going to be there to walk you through every step of the home buying process. They will represent you in the transaction and beyond. They should also be there to educate you on all decision you’ll need to make and inform you of your options along the way.
Q: How much do I have to pay a Realtor as a homebuyer?
A: Nothing! That’s the great thing about being a homebuyer. You do not need to pay your realtor anything for helping you purchase your home. The seller pays their realtor a fee and then that agent pays the buyers agent for bringing the buyer and facilitating the transaction.
Q: What does my credit score need to be at in order to buy a home?
A: The recommended credit score is 620 or higher. The higher credit score you have, the better lending terms you get. This is an ever-evolving topic with requirements that are constantly changing. There are some lenders who will approve a buyer with a 580 score or sometimes even lower. Find a loan officer who will give you a current answer for today’s lending requirements. If you need a lender, let us know. We have some great lenders who we work closely with.
Q: What type of home buying programs are there?
A: There are several different home buying programs that you could use. The main ones we see are FHA loans, VA loans, and USDA loans. You’ll want to know the difference between these as you begin your home search.
Q: How much money do I need for a downpayment?
A: It all depends on your loan type. It can be anywhere from 3% to 20%. FHA loans require 3% down where conventional loans require 20% (there are some conventional loans that only require 3% down though). Veterans are usually eligible for a VA loan, which requires no money down. This is also true for USDA loans which are for properties in rural areas.
Q: What other fees will I have to pay other than the down payment?
A: You will have loan origination fees and closing costs. The down payment is typically the largest cost of buying a house. The second largest cost is the lending fees. Most lenders charge between 2% to 4% of the loan amount for the loan origination fees. Again, this depends on the type of loan you have. Conventional loans are usually lower when it comes to loan origination fees, but of course, conventional loans require more money down.
Please contact us for more information at 763-746-3997 and speak with one of our outstanding buyer's agents today!