The amount of a down payment that is required to purchase home depends on the price of the home and the mortgage terms provided by your lender. Different lenders offer different loan options that may allow a buyer to put as little as 3-5% down or even less. Loans with a low down payment may be require you to pay private mortgage insurance (PMI) during part of your loan.  PMI will add on to your monthly mortgage payment for a period of time.  Your lender will be able to provide information about all the costs and fees associated with your loan and give you information about what your monthly payment will be.

When it comes to financing a home, it is a good idea to shop around for the best mortgage terms. Many of our clients often start with their own banking institutions or credit unions. Another option is a mortgage company who specializes in home loans.  The federal government offers competitive loan programs for first-time homebuyers as well. Buyers are able to seek out mortgage rates and other associated costs/fees from several lenders before selecting the one that is best for them.  If you don’t currently have a lender, give us a call and we can help.

It is important to meet with a lender or bank who can help you determine what the maximum price of the home you are qualified to purchase. Lenders will consider your income, how much debt you have, any assets you own and your credit history before issuing a pre-approval letter.  This letter details the amount they can purchase (providing their financial picture does not drastically change during the home-buying process) and important to have when it comes time to make an offer on a home.

The real estate market is constantly changing, but often times, it is more cost-efficient to buy a home rather than rent. When you buy, you are investing in your own future. When you rent, you are investing in your landlord’s future. There a variety of financing options and an experienced mortgage professional can help you to find the best option for you.  Additionally, there are financial benefits to ownership including tax advantages and home equity.  (Here’s a link to a tool that can help you to determine whether buying makes sense for you:  Rent vs. Own Calculator

There’s no single sign that will confirm you are ready for home ownership, but there are a couple cues that will signal it might be your time. If you love the area that you’re living in and you’re planning to stay for a while, you may be ready to settle down and buy a home. If you’ve got a savings plan in order that is allowing you to pay your bills and save a little nest egg, you could be ready for the financial commitment that comes with buying a home. Finally, if you’ve gotten to be pretty handy around the house, that’s another sign you might be ready for the maintenance that accompanies owning your own home.

The first, and one of the most important tasks in buying a home is to select your professional real estate agent.  It is possible to buy a home without a licensed real estate agent, but it’s a whole lot harder to do so on your own. Not only have real estate agents received training to help buyers, they’re up-to-date on current market conditions, real estate transaction procedures, laws and the closing process. Agents also have access to the latest listings and can arrange for showings.  They will also be able to provide you with dependable and helpful industry contacts, like lenders, appraisers and other service professionals who are essential to help to ensure the buying-process will go more smoothly. Finally, a professional/licensed real estate agent is happy to represent a buyer and provide guidance based on experience when making an offer, negotiating on price or at any other time during the home-buying process.

Many buyers wonder if a home inspection is really necessary. Prevailing wisdom is unequivocally yes, yes, and yes.  Consider a home inspection as something of an insurance policy (it’s not insurance though). The inspector will look into the condition of the roof, electrical and plumbing systems as well as the HVAC (heating, ventilation and air conditioning) and make sure they are in proper working order.  They also evaluate other aspects of the home including cosmetic, structural and safety factors.  Often they are able to spot problems that the you would not see.  The home inspection can prevent you from paying to fix problems after you close. The inspector will provide you of a detailed report of the condition of the home after the inspection is complete.  If some things are not up to par, your agent can negotiate with the seller’s agent to get those fixed before you close.

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Before starting your home search, it will be important for you to have a pretty good idea of what you want in a home.  Working closely with your agent, you need to develop a list of must haves (these are items that are most important to you and might include price, geography, neighborhood, style of home, amenities, proximity to shopping/schools/recreation, etc.).  You’ll also want to develop a list of nice to haves, but are not a firm requirment.  Be specific, but realistic and as flexible as possible when it comes to the must haves…flexibility will give you a larger pool of homes from which to select.  The lists will also help your agent to monitor the market and find homes that are the best fits for you. Once you know what you are looking for, you and your agent will monitor all the tools available; be they the local MLS, other real estate sites, your agent’s professional network, etc.  Once you find a home(s) that look to be of interest to you, your agent will arrange a showing so you can see the home in person.  Your agent has a may also preview homes for you to ensure he’s showing only homes that will be good prospects. Industry averages show that buyers see 10 homes on average before making an offer. Don’t hesitate to move on a home you really like.  You don’t want to rush and make a decision you’ll regret, but at the same time, if you wait too long to make a decision on a home that could be “the one”, someone else might make an offer that the seller accepts.

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Before making an offer on any home, it is important to understand the market value of the home.  Your agent will be helpful in providing you with relevant comps (other similar homes that have sold) and other information that will help in determining the market value of a home. As a rule, offering 5% less than list price won't ruffle any feathers. If the home has been on the market longer than the average number of days a home has been on the market, you may consider an offer below that.  The reality is, you never know how low a seller will respond to an offer. If the sellers are eager to move, you could luck out and score a deal.

After agreeing on a home’s price with a seller and signing the contract, the closing process begins and it typically lasts between 30-60 days. During this time financial documents are finalized, home inspections and appraisals are completed as well as other legalities. On closing day, the buying and selling parties meet (usually for the very first time) to sign final documents transfer ownership!  To see a graphic detailing the milestones of the home buying process, click here. (link to the buying process graphic).