Home Buyer’s Frequently Asked Questions
What advantages are there to purchasing a home?
Buying a home is one of the best ways to build equity. When you’re a homeowner, you’re taking control of your living situation, and you’ll be making positive strides for your community and family. One study even asserts that owning a home can improve your quality of life. The infographic below explains more about the social benefits that come with owning a home.
How much “house” can I afford?
To get an accurate idea of how much you can afford when it comes to owning a home, you should estimate that you’ll pay 25% of your gross income in mortgage payments. Most lenders will feel comfortable with this estimation. However, your credit score and other debts that you owe each month will be factored into a lender’s decision as well. A mortgage calculator is a helpful tool to determine what type of home loan is best for you.
Do I have to have a buyer’s agent?
A buyer’s agent is committed to putting your best interest first as the home owner, so hiring one is a good idea. A buyer’s agent is familiar with the local housing market and will let you know which homes are properly priced. When you have to fill out the paperwork for your home, a buyer’s agent can make sure you’re going about the process the right way.
What’s the difference between mortgage pre-approval and pre-qualification?
When you pre-qualify for a mortgage, the lender gives you an estimate of how much you can afford in a mortgage loan. This will help you find a home in a price range you can afford.
When you’re pre-approved for a mortgage, you get a written guarantee from a mortgage broker or lender to grant you a mortgage for a specific amount. Before you submit an offer for a home, it’s best to get pre-approved. Potential sellers will take this more seriously than simply being pre-qualified for a home.
What do I do if my offer is rejected?
If a seller rejects your first offer, don’t be discouraged. This happens more often than you may think, and it doesn’t mean that you’re not getting the house of your dreams. If your offer is rejected, this means it’s time to negotiate, and that’s why hiring a buyer’s agent is so important. You may be advised to offer more money for the house, but you may also get the advantage of having more repairs done on the home. The length of the closing period may also be shortened or lengthened during negotiations. It’s common for negotiations to go through a little back and forth before both parties reach a beneficial compromise.
Do I have to get a home inspection?
Before you officially sign the contract and close on your home, It’s important to get a home inspection. The inspection will let you know what condition the home is in, so you won’t have any surprises once you move in. No one wants to buy a home only to find that major repairs, like a leaky foundation or roof, need to be fixed.