Q: Why should I buy, instead of rent?
A: A home is an investment. When you rent, you are writing your monthly check to pay your landlords investment. When you own your home, you can deduct the cost of your mortgage loan interest from your income taxes. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years and obviously increasing the value of your investment. Finally, you’ll enjoy having something that’s all yours – a home where your own personal style will tell the world who you are.
Q: Can I buy a home even if I have had bad credit, or don’t have much for a down payment?
A: Start by contacting a mortgage broker or lender that can help you sort through your financing options. With the variety of lending options available to buyers, your lender will inform you of your options and down-payment requirements. Many lenders have programs to help buyers purchase a home – even buyers who have recently filed for bankruptcy.
Q: Should I use a real estate agent?
A: Using a real estate agent is a very good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good realtor can guide you through the entire process and make the experience much easier. With immediate access to homes as soon as they’re put on the market, your realtor can save you hours of wasted driving-around time. When it’s time to make an offer on a home, the agent can point out ways to structure your deal to save you money. And you don’t have to pay the agent anything! The payment comes from the home seller – not from the buyer.
Q: How much money will I have to come up with to buy a home?
A: In general, you need to come up with enough money to cover three costs, your earnest money, down payment and closing costs. The earnest money is the deposit you make on the home when you submit your offer which shows the seller that you are serious about wanting to buy the house. The down payment is a percentage of the cost of the home that you must pay when you go to closing. Generally, the more money you can put into your down payment, the lower your mortgage payments will be. Finally your closing costs are another expense that you will have which are the costs associated with processing the paperwork to buy a house.
Q: How do I know if I can get a loan?
Contact a mortgage broker. They will help you evaluate your loan potential. A broker will know what kinds of mortgages the lenders are offering and can help you choose a lender with a program that will be right for you. Another good idea is to get pre-qualified for a loan. That means you go to a lender and apply for a mortgage before you actually start looking for a home. This way you’ll know exactly how much you can afford to spend, and it will speed the process once you do find the home of your dreams. Besides many sellers will not even look at an offer from a buyer who is not pre-qualified.
Q: In addition to the monthly mortgage payment, what other costs do I need to consider when purchasing a home?
A: Well, of course you’ll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate broker will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner association or condo association dues and property insurance payments. You’ll definitely have county property taxes. Taxes and your property insurance is normally part of your mortgage payment.
Q: When I find the home I want, how much should I offer?
A: In addition to finding the home of your dreams your realtor can help you determine what to offer for the home. Several factors to consider when deciding how much to offer are:
4. How much mortgage will be required? Make sure you really can afford whatever offer you make.
5. How much do you really want the home?
The closer you are to the asking price, the more likely your offer will be accepted. In some cases, you may even want to offer more than the asking price, if you know you are competing with others for the house.
Q: So what will happen at closing?
A: Basically, you’ll sit at a table with your attorney, real estate agent, and possibly your mortgage broker. The seller and his or her attorney and the seller’s realtor and a closing agent will also be present. The closing agent will have a stack of papers for you and the seller to sign. As your attorney, I will explain each document to you so you know exactly what you are getting yourself into. We will cover the fees involved with the transaction and also review the conveyance documents that give you ownership in the property. Upon completion of the closing, you are now the proud owner of your new home.
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