Q: What is the most important thing I need to do to buy a home?
A: Know what you want. Whether you’re a first-time buyer or a veteran homeowner, it’s important to have a clear understanding of what you want in a home. This makes the process flow more smoothly and helps keep you firmly focused on your priorities.
Q: Why do I need a real estate agent?
A: A real estate agent is a paid professional who can guide you through a process that can alternate between frustrating and exhilarating. Real estate agents know the ins and outs of the market.
Q: How do I choose a real estate agent?
A: There are a number of ways, including local advertising, Web sites, referrals and recommendations.
Q: How do I get a loan?
A: To obtain a loan, you must complete a written application and provide supporting documents, including pay stubs, rental checks and tax returns for the past several years.
Q: Where can I get a loan?
A: Mortgage financing can be obtained from mortgage bankers, mortgage brokers, savings and loan associations, mutual savings banks, commercial banks, credit unions and insurance numbers. A growing number of real estate agents also can arrange financing.
Q: How do I make an offer?
A: Typically, you complete a written offer that is presented to the seller and his representative. The seller may accept, reject or counter the offer.
Q: Why are structural home inspections important?
A: The home inspection keeps a buyer from being surprised by expensive problems such as structural damage, termite damage, or other physical defects. It represents a chance for a buyer to get an objective top-to-bottom look at the property.
Q: What types of home insurance are there?
A: There are various types associated with home ownership, including title insurance (protects owners if title is found to be invalid), homeowners’ insurance (provides fire, theft and liability coverage) and flood insurance (generally required in high-risk, flood-prone areas).
Q: What can I expect during closing?
A: Closing the process where all necessary paperwork to complete the sale of the home is signed. It typically occurs in an office setting. This can be delayed if conditions of the sale are not met.
Q: What is the advantage to pre-qualifying for a loan?
A: It takes very little time and can speed up the process later. It also gives you a realistic price range to consider for your purchase and can make you more attractive to sellers.
Q: What documents will I need when applying for a home loan?
A: A copy of your purchase and sale agreement, present mortgage information, two-year history of employment and verification of all income resources, information about checking, savings and credit card accounts, name, account number and outstanding balance of each of your debts, application deposits, information about assets and information about other assets that might be used as funds to close.
Q: What factors should I consider when looking at homes?
A: Much will depend on your own personal tastes, but keep in mind price, condition, size and configuration, comfort, style and resale potential.
Q: What is the purpose of a final walk-through?
A: It allows you as the buyer to see if there have been any fundamental changes in the property since closing. It also allows you to make sure any promised repairs have taken place.
Q: What is earnest money?
A: This is a deposit that you give when making an offer on a house. It shows the seller that your offer is made in good faith.
Q: What are contingencies?
A: Contingencies are included in a written offer to stipulate that certain conditions must be met for the sale to take place. For instance, a common contingency states that specific financing must be found for the buyer to be bound by the contract.
Q: Can I withdraw an offer?
A: In many cases the answer is yes, right up until the moment it is accepted, or, in some cases, the moment you’re notified it’s been accepted. Be advised that it is wise to consult an attorney experienced in real estate matters before revoking an offer.
Q: How do I determine how much house I can afford?
A: Determine your gross monthly income and your monthly debt obligations. Typically, your housing expense shouldn’t exceed 28 percent of your gross monthly income. Also, your housing expense and your debt obligation shouldn’t exceed 36 percent of your gross monthly income. Remember, though, these numbers are guidelines and each case is unique in the eyes or a lending institution.
Q: What factors should I consider in evaluating a potential neighborhood in which to live?
A: There are a number of factors, but experts agree quality of schools, property values, traffic patterns, crime rate, future construction and proximity to frequent destinations all should weigh heavily.
Q: How do I get a copy of my credit report?
A: You can obtain a copy from each of the three companies for $8.50 or less. The three companies are Equifax Credit Information Services, Experian National Consumer Assistance Center and Trans Union National Disclosure Center. You can call, write or e-mail each entity. Your request must include your full name, current address, previous addresses from the past two years, Social Security number, date of birth and phone number.
Q: What should I look for in my credit report?
A: First, make sure the information is up to date. Then, make sure the report reflects how you use credit today. Then hunt for mistakes.
Q: What is a credit score?
A: It is a computer-generated number based on data in your credit file. It takes into account things such as number and frequency of late payments; the number of credit cards you possess; whether you consistently live within your credit limits; whether you have savings and the frequency with which inquiries are made about your credit.
Q: How do I correct an error in my credit report?
A: Send the particular credit bureau a letter by certified mail with a return receipt requested immediately. The bureau has 30 days to investigate your claim. It should send you a written notice of the results of the investigation within five days of its completion as well as a copy of the corrected report.