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Top 10 Most Common Home Buyer Questions
When I'm thinking of buying a home, where should I start?
You need a mortgage preapproval unless you have and want to use cash to purchase the home. Your local Realtor can help with that, or you can use sites like Quicken Loans (Rocket Mortgage). There are advantages and disadvantages to both.
Having this pre-approval lets you know how much your monthly payment will actually be, which is often quite far off from a Zestimate or "mortgage price" on many websites. This is because many costs are elusive yet still required, such as home owner's insurance, taxes, mortgage insurance premiums, etc. Having a Realtor and their trusted Mortgage Professional helps walk you through the details and the true cost of home ownership.
Here is a quick calculator to get you started:
How long does the home buying process take?
It can vary greatly depending on if you are already pre-approved, have your finances and taxes in order, and are ready with a down payment. I have seen closings in as little as 2 weeks and as long as 4 months.
Do I need a Realtor?
Need is a strong word. Instead, ask yourself these questions: Would I like to have someone help me who does this for a living? Would I go to a doctor who never got a degree? Would I represent myself in a court of law? Is buying a home just like buying a car, or couch, or shoes? If I can have a free executive assistant to help me with anything in life, would I hire one?
Keep in mind that a Realtor went to school to get licensed and are held accountable to ethical and community standards. Not all home sales agents have completed the same courses, and knowing the difference can make all the difference. Just as an honorary doctor may not be qualified to perform Lasik surgery on your child's eyes, a Sales Consultant who works for a new home builder may be under a different level of scrutiny than a Realtor you can hire usually at no cost to you.
What is the best advice for a first time home buyer?
Know that the people who are professionals in the industry, are there to do a job just like you do yours. Trust them, treat them well, and you will have a better and easier experience as a result.
You can ask your friends and family, who have probably purchased a handful of houses in their lifetime. However, there is no harm in speaking with a professional who has sold anywhere from 4 - 40 a year and possibly more. This is the largest investment in most people's lives, consider treating it as such.
What kind of credit do I need to buy a home?
Another very tricky one! I have seen scores as low as 560 purchase a home. If you have great income and low credit, a lower score may still qualify for a larger loan. Generally, having a credit score of 620 or better will allow you to secure financing.
One thing that I like to remind my leasing clients of is that when you are looking for a lease, they usually check your credit. Knowing this, it's almost easier to purchase a home in the Austin and surrounding areas for the same or sometimes less than it would be to lease a place.
Lastly, the credit items that a mortgage professional is looking for is not always the same as what you may receive from a credit report that you pull yourself.
What sort of assistance is available to me?
Lots! You may hear things like USDA, VA, FHA, Down Payment Assistance... these are all variations of assistance available to help you purchase your home. To get an understanding of the options that may apply to you, sharing your personal situation with your Realtor and mortgage advisor can help a great deal.
What will my down payment be?
This is the most frustrating for most people. A zero down payment program is not always zero dollars to move into a home. An easy rule of thumb is to assume, the down payment is anywhere from 3% to 5% of the value of the home.
Do I have to pay for anything else?
Getting out of a down payment can feel like jumping the biggest hurdle, but there are some other costs that may be associated. There is a fee to put all of the lending together including appraisals and paperwork, getting home owner's insurance, paying for title insurance, etc. Keeping in communication with your mortgage professional and Realtor is the best way to know the actual cost for this.
When do I get the keys?
The keys are yours when the contract stipulates. Mostly, you receive the keys at closing.
Talk to a Realtor to get a mortgage pre-approval
It takes on average 30 - 60 days to purchase a home
A Realtor can do or help you find most things related to the home buying process
Having a 620 credit score makes life easier
There are a lot of options out there to help with home buying, you won't know if you don't ask and every situation is different
Down payments are usually 3-5% of the price
Don't forget about closing costs
After all that, you'll get your keys!
Have fun, and pick something you'll enjoy living in for the next 5-7 years!
I have lived a full life. One of my lofty aspirations is to have an impact on everyone I meet. One way I am able to achieve this is through Real Estate. Whether you are buying your first home, selling....
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