1.
Question: I’m ready to purchase my 1st
home… What do I need to do first?
Answer: One of the most important steps in
the home buying process is first determining how much house you can afford and
whether or not a lender based on your current credit score and financial
situation is willing to give you a loan to purchase the house.
Pre-qualification by a lender also helps your Real Estate agent to know what
price point to send you homes in as well as the time frame you should expect to
be moving in. It won’t do any good to waste some poor agent’s time and gas if
you are not even sure you qualify for a mortgage loan. If you just like looking
at homes most agents offer online virtual tours you can watch from a tablet,
smart phone or computer or you can check the newspapers and local media for
open house schedules where certain homes are held open for a few hours on the
weekend to allow potential buyers to take a free tour.
2.
Question: What type of credit score do I need to
have in order to get pre-approved for a mortgage loan?
Answer: The majority of mortgage lenders
require consumers to have a Fico credit score of 640 or higher. Some lenders
will still work with consumers who have at least a 620 or higher. Other larger
lender institutions like Wells Fargo have loan programs that only require a
credit score of at least 580. While lower credit scores may be accepted in some
cases, keep in mind that there may be overlays on the loan. Since your mortgage
is sold on the secondary market almost immediately…These investors like Fannie
Mae or Freddie Mac will also demand that the borrower/buyer meet certain loan
underwriting standards. While a 580 credit score may get you a mortgage loan,
you may have stipulations like having to pay 20% down or keep a certain amount
of taxes, mortgage insurance, interest and principal house payment in reserves.
3.
Question: I was pre-approved for a mortgage. How
much money will I need out of pocket to close on my new home?
Answer: Closing costs in North Carolina
average around $3400-$4000 This costs includes but is not limited to; loan
application fee, loan origination fees, credit report, appraisal, inspection,
document prep, closing attorney etc. In addition to that Conventional loans
often require at least 5% of the purchase price paid down, while FHA financing only
requires at least 3.5% of the purchase price of the home to be paid as the down
payment. On a $130,000 home that could total up to $8000.
4.
Question: If I don’t have $8000 in down payment
and closing costs…Are there any programs or grants I can use to get the money?
Answer: The state of North Carolina
has an organization called NCHFA (North Carolina Housing Financing Agency) that
will assist qualified borrowers/buyers with up to $8000 in down payment
assistance. Another statewide organization, Homes4NC has a program where qualified borrowers can receive a grant
for up to $2000 to help with closing costs. The City of Raleigh has a program
offering $20,000 to qualified buyers to help with down payment and closing
cost. There are programs available, check with your agent or lender on
financing assistance options best suited to your need.
5.
Question: Why should I use a buyer’s agent to
help me purchase Real Estate?
A
Buyers Agent’s commission is paid by the seller at closing. If you have not
agreed to a verbal or written Buyer’s Agency Agreement the Agent showing you
the home is legally working as a sub-agent of the seller. That means that they
are only allowed to disclose material facts. They are working in the best
interest of the seller instead of the buyer. When you hire a Buyers’ Agent…(this
can be verbal up until the time you decide to put in an offer) they are there
to promote your best interest during the deal. They can research the property
and neighborhood, turning it upside down to help you make an informed decision
on your purchase. Your Buyers Agent will
try to gain every advantage on your behalf to give you leverage in negotiating
a fair price.
Your
Buyer’s Agent can offer you many other valuable services like;
Provide
access to new listings as they come on the market
Provide
a market analysis on any property you’re interested in to verify its value
Disclose
all material facts pertaining to the property
Disclose
potential environmental concerns like lead based paint and radon
Assist
you with loan approval
Thoroughly
explain all contracts, addendums and property condition reports
Write
up all offers and contracts on your behalf,
Line
up professional services (lender, closing attorney, inspector, appraiser,
painter, plumber etc.)
Be a
problem solver for you during the transaction
Act
as a buffer between you and the seller
6.
Question: I have been pre-qualified for a
mortgage, I have saved funds for down payment and closing cost (or I have a
program to get the funds from) I have found a property and I’m ready to make an
offer. What is the next step?
Answer: Once your offer has been
accepted the due diligence process starts. During the due diligence process you
will make your final loan application as well as perform a variety of
inspections and appraisal on the property to make sure it is a sound
investment. If before the due diligence period is up ad you and your agent
discover ANYTHING about the property you don’t like…you can cancel the
contract. If everything is suitable and you decide to move forward you will
begin to make preparations to close on the property.
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