I'm not going to purchase right away so why should I get pre-approved?
It is important to be pre-approved by a lender prior to beginning your search for the perfect home. This will allow you to act quickly when you find the home you want to purchase and puts you in the best position from the seller’s point of view. It also eliminates any surprises later on. Pre-approvals are typically good for 90-120 days. If the pre-approval expires, check with your lender, they may have to refresh the credit report and pre-approval. It is a very simple and quick process.
I have all the information I need online so why should I use a Realtor®?
With today's technology, it is true that anyone can find their dream home on their own. However, did you know that finding the perfect home is a very small part of the realtor's job? As a realtor, I owe my fiduciary duty directly to my client and do everything in my power to look out for YOUR best interests. This includes negotiating to protect your financial interests, staying current with local, state and federal regulations to protect your legal interests and advising you of your options surrounding possession and condition negotiations to protect your emotional interests. There is no savings in purchasing a home directly through a listing agent who is bound to protect the sellers interests.
What if my credit is not high enough to qualify for a loan?
Don’t get discouraged if your credit is not quite there. Many lenders can help you improve your credit scores and put you in a position to purchase quickly. They may also refer you to a credit repair agency that could help as well. There is usually a light at the end of the tunnel so consult with your local lender.
How much money do I need to purchase a home?
You will need money for your down payment, earnest money, inspections and closing costs. Most lenders require 5-20% of the purchase price for a down payment, however, there are several down payment assistance programs available that may assist you with the down payment amount. The earnest money deposit is typically 1% of the purchase price but can vary. Depending on the type of property that you are purchasing and the type of inspections you choose, I would recommend setting aside $500-1,000 (includes whole house inspection, sewer scope, radon, etc.). Finally, closing costs (including pre-paids and pro-rates) average approximately 3% of the sales price. Note: It is not uncommon to finance the closing costs by asking the seller to pay for them. This is something that we can discuss in more detail when you are ready to move forward with the purchase.
What is Earnest Money?
An earnest money deposit shows the seller that you are serious about purchasing the property. When the transaction is finalized, the funds are put toward your down payment. If the deal falls through for any reason other than the contingencies (or terms) you have negotiated, you may not be able to reclaim the deposit. Typically, if the seller terminates the deal, the earnest money will be returned to the buyer.
What are Closing Costs?
When you get a mortgage, you will need to pay closing costs, which are fees – charged by lenders and third parties -- related to the purchase of the home. So, in addition to owing the lender the down payment on the home and the principal and interest related to the mortgage, you will also owe the lender and third parties closing costs, which you usually pay at the time that you close on your mortgage. A few examples of what are included are: loan origionation fee, credit report fee, appraisal fee, title fees, title insurance, escrow deposit to set up your escrow accounts, recording fee, etc.