FREQUENTLY ASKED QUESTIONS
Do I need to use a real-estate agent?
While it is not required to work with a real estate agent, it can be very beneficial to have one working by your side. Real estate transactions are typically one of the largest financial investments that a person experiences in their lifetime. It can be invaluable to have the experience of a real estate agent on your side to manage the ins and outs of the transaction and offer support.
Below are just a few ways that working with us can help you:
- Determine Buying Power
- Assisting in Home Search
- Property Selection
- Due Diligence
- Market Data
- Marketing and Advertising
Check out this post on how a real estate agent can help you.
Where do I find a Loan?
It is recommended that first-time home buyers consult with multiple lenders before formally applying for a loan. Different lenders may have different rates and fees which can impact your monthly mortgage payment. By doing some research beforehand and shopping around, you can find the best deal. Also be sure to explore different types of financial institutions such as mortgage brokers, credit unions, savings and loans, and traditional banks.
Can I afford a Mortgage?
Before you start the home buying process it is important to be sure that you can afford a home. Most lenders and lending institutions adhere to standards that are set by Fannie Mae. Fannie Mae buys and sells mortgages in the secondary market. Lenders want to be sure that your total monthly payment is not more than 28% of your gross monthly income, and your total monthly debt payments are no more than 36% of your total gross monthly income.
How do I apply For a Mortgage?
When applying for a mortgage loan, be prepared to provide a large amount of documentation. It is recommended by Ginnie Mae that you gather these documents beforehand. Some of the documentation that you will need to provide includes personal information such as Social Security numbers and photo IDs. You will also need to have proof that you can afford the home including bank statements for the past 6 months, a month or more worth of pay stubs and documentation of other financial assets. It is also recommended that you bring documentation on your current credit accounts, tax statements for the past two years and the contact information of someone who can verify your employment.
How does my credit score fit in?
Credit scores have a major influence on whether or not you will be approved to buy a home. The Home Buying Institute states that a score of 620 will usually get you in the door with lenders. In order to get the best rates however, you will probably need a score of at least 740. Your credit score directly influences the amount of interest you will have to pay on the loan.
What Happens at Closing?
In the Real Estate industry, the term closing refers to when you sign all of the loan and ownership paperwork to take over the home or property. At closing, you may be responsible for some closing costs. These can include title insurance and points to lower the interest rate on your mortgage, fees for loan origination, loan application fees, appraisals, housing surveys and even your first month of homeowners insurance. These costs can quickly add up and can be up to 8% of the purchase price of the home or property. It is important to keep these costs in mind when purchasing.