10 Common Homebuying Questions Answered
Whether you’re in the market for your first home or your tenth, buying a house is an exciting and sometimes, overwhelming time in your life. From your dream must-have lists to the ideal locations, school ratings, neighborhood amenities, and budget, there is a lot involved in the homebuying process. As you continue to navigate through your personal journey of purchasing your next home, many questions may arise throughout the process.
Today, we want to answer the ten most common questions that realtors get asked in the homebuying process. We hope our answers will give you some insight into the process and ease any anxiety about all that home buying entails. One thing’s for sure: buying a home may be a lot of work, but it is worth every list, question, and step in the process to get you into the home of your dreams to enjoy for years to come.
Here are the ten most common questions about buying a home.
1. What’s the first step in the home buying process?
Before you begin touring homes and popping into open houses, the first step is to obtain a mortgage pre-approval from a loan officer. This document outlines how much you can afford and how much you’ll get pre-approved for once finalizing your mortgage. This allows you to work directly with a realtor to search for homes within your budget and wishlist. Without it, you don’t have much ground to stand on or a solid number to work with on determining the best homes in your budget. The mortgage officer will run a thorough credit check, verify income, and review other financial documents to determine a max approval amount during the pre-approval process. You may also discuss what type of loan is best for you, downpayment requirements, and overall timeline.
2. How long does it take to buy a home from start to finish?
The timeline for buying a home varies by person and is mainly driven by how quickly you find a home you want to put an offer on. Some people go through 20 or more homes before finding their dream home, while others just visit a handful before submitting an offer. Once your offer is accepted, the standard timeline from approval to keys in hand ranges from 30 to 60 days based on the terms of the closing agreement.
3. How does a realtor help me?
Realtors are your go-to industry expert in the search for your next home. They help you schedule showing, provide detailed information on the neighborhood and home specifications, and are often well-versed in the area you are shopping in, giving you the insider scoop on what area, home size, neighborhood, and amenities are right for you and your family. Realtors also work with your mortgage company and other realtors to finalize documents once you’ve closed on a home. In short, realtors are your eyes and ears in the market during the buying process and your go-to expert throughout the entirety of the purchase transaction.
4. How much does a realtor cost?
In most instances, a realtor does not cost the buyer anything. During the home selling process, the sellers pay a fee to their realtor, which is typically split between the selling agent and buying agent at the time of closing. Buyers may opt into compensating their realtor as part of their realtor agreement.
5. Do I need to meet a minimum credit score?
Yes, you must meet and maintain a healthy financial status to qualify for a home purchase. Although different loans vary when it comes to credit score requirements, most require a score of at least 620 or higher. In rare instances, a score as low as 580 may work. During your preapproval process, speak with your mortgage specialist about your unique credit situation. If you do not currently meet credit score requirements, your mortgage lender will often provide you with a path to improve your score and qualify for the loan you need over a period of time.
6. How much does my down payment cost?
Down payment cost depends on the type of mortgage loan you use. However, in most cases, you can expect a down payment to range from 3% to 5% of the total cost of the home.
7. Besides the down payment, what else should I plan to pay for?
Planning out your financial path during the homebuying process is an essential part of setting yourself up for success. Although a down payment is typically the biggest chunk of the out of pocket expense you’ll face, there are other fees you should know about and save up to cover including:
- Closing costs
- Homeowners insurance
- HOA fees (if applicable)
- Property taxes
- Home repair and maintenance
8. Are there any programs I could qualify for?
Yes, in some instances, you may qualify for special home buying programs such as:
- VA Loans
- USDA Loans
- FHA Loans
Speak with your real estate agent and mortgage lender to determine what loans you qualify for.
9. What advice would you give first-time homebuyers?
Buying a home for the first time is a big feat, albeit exciting. There are plenty of things to consider before taking the leap on submitting an offer for your first home. Our advice is this:
- Make sure you have a strong financial cushion to help pay for all costs associated with a down payment, closing costs, and other costs that may arise during the home buying process.
- Keep an eye on your credit score and work with your mortgage officer to follow recommended steps to keep your finances in tip-top shape.
- Use a realtor who understands the area and has experience working with first-time home buyers.
- Don’t be afraid to ask questions.
- Prepare to compromise on your dream wishlist.
- Enjoy the journey!
10. Why buy a home in New England?
We may be biased, but New England has our heart. From the picturesque winters and crisp falls to the blooming springs and warm and welcoming summers, we couldn’t think of a better place to call home. There is nothing like experiencing all four seasons in the glory of your backyard. Not to mention, the schools are top-rated, the seafood is out-of-this-world and the history is all-encompassing. So whether you’re new to the area or have called New England home for a while, we couldn’t think of any reason not to consider calling this lovely side of the United States home.
If you’re in the market for a home this year, it’s always important to stay up-to-date on the latest market trends, understand the entirety of the buying process, and connect with professionals who are willing to travel the entirety of the home buying process with you to make all aspects of this next chapter easier on everyone. To learn more about buying a home, or to begin the process contact us today. We would love to help you get into the home of your dreams this year.