Here are some answer the most common questions we get. Have a question not listed or want more information? Contact us!
How Do I Know What Price Is Right For Me?
Buying a home is generally one of the biggest purchases you’ll make in your life and you have to be smart when it comes to fitting it into your budget. According to Credit.com, you shouldn’t spend more than 28% of your gross monthly income on a mortgage payment.
How Much Are Closing Costs?
“Closing costs” is a term that is used to describe the number of one-time fees you’ll have to pay at the close of the real estate transaction, and it depends on the transaction. It can include any loan processing or lender fees, title and escrow company charges, local recording fees, inspection and appraisal fees, property insurance and taxes, etc. Based on current industry trends it’s estimated you’ll pay 1.5-2% of the total purchase price for closing fees.
What is the difference between pre-qualification and pre-approval?
Pre-qualification is a lenders’ estimate of the amount you can expect to be approved for a loan. It’s a quick assessment of your financial situation based on the information you give the lender.
Pre-approval is more involved. You’ll have to fill out an application that lets the lender determine your financial situation. Once this is processed, you’ll get an exact loan amount that you are pre-approved for and the total sales price you are approved for. This letter generally lets you see your estimated down payment and potential interest rates.
What Financial Documents Do I Need To Buy A House?
If you are seriously looking to buy, it’s important that you have the necessary documents ready. These documents include pre-approval letters and proof of funds.
Proof of funds documents usually need to have your name, issue date (ideally within 90 days of the offer date), name of the financial institution, and the amount that’s currently available all clearly visible.
What Is Escrow?
It’s a process where a third party makes sure that all the necessary parts of the real estate transaction have been fulfilled. The escrow company holds the deposits and the deed to the house until closing and they gather all the documents needed to legally record the transaction. They are also responsible for distributing funds.
What Is Closing and Recording?
Closing and recording is the final step in the home buying process. It occurs when the County Clerk date-stamps the property deed and the property legally changes hands. The sale is complete and you can get your new house keys!
What Is Home Sale Contingency?
It’s a clause in an offer contract that makes the purchase of a property dependent on the successful sale of another piece of real estate. It’s good if you need to sell your current home in order to have a down payment for a new one. If the sale of your home falls through for some reason, this clause allows you to back out of the new home purchase agreement.
What Is Loan Contingency?
Also known as a mortgage contingency, it is a clause in an offer contract that allows you to back out of the deal and keep your deposit if you are unable to secure a mortgage with specific terms during a fixed time period. Even though it’s not required, it’s always a good idea to add this clause if you are financing to purchase a home. Standard loan contingency periods are 21 days, but can be adjusted.
What Is Appraisal Contingency?
This is a clause that allows you to dissolve a purchase agreement if a home’s appraisal value is lower than the sale price. It provides you, as the buyer, with a safety net. Without this clause, you would be responsible for paying the full sale price set in the purchase agreement or lose the deposit to break the agreement.
I Made Improvements To My Home. Will It Increase The Offer Price?
It’s important to know the difference between repairs and renovations. Repairs are typically items that buyers expect to be in good condition when they purchase a home (like a working HVAC unit or no missing floor tiles). However, renovations are improvements made to the home (like upgraded countertops or new stainless-steel appliances) and can potentially increase the value of your home.
What Information Do You Need To Know To Buy My House?
We can get started with basic information. How many bedrooms? How many bathrooms? Is there a garage or finished basement? What is the overall condition of the property?
I Have A Mortgage. Does It Get Payed Off?
Yes, by law any mortgage must be paid off when you sell the house.
I Am Facing Foreclosure, Can I Still Sell My Home?
Yes, as long as the foreclosure has not been finalized (the bank owns it), you can sell it, but work quickly! Most lenders would prefer to continue receiving payments rather than taking your property. Often, we can work with lenders to delay foreclosure until you have sold your home and have the money to pay off the mortgage and avoid foreclosure. This can help your credit by preventing a “foreclosure” from appearing on your credit report.
My House Needs Several Repairs, Will You Still Buy It?
Yes! Many houses we purchase need repairs or updating. If your home is in good condition overall, we can make an offer.