Am I ready to buy?
- You've been continuously employed for at least 2 years
- Your current income is reliable and consistent
- You pay your bills on time and do not have considerable credit card debt
- You don’t have multiple outstanding long-term debts (such as several car loans)
- You have set aside funds for a down payment (or qualify for a zero down loan through VA or USDA programs)
- You can afford to pay the principal, interest, taxes, and insurance on a home
Is there a tax benefit to buying a home?
In short: yes. If you plan on obtaining a mortgage, the interest on that mortgage is usually tax-deductible. Local real estate taxes may also be tax-deductible on your federal return. It never hurts to read up and makes sure you have the latest information, which can be found on the IRS website. Better yet, call your accountant and ask for up-to-date information specific to your city and state.
Is there a difference between getting pre-qualified and pre-approved?
Yes. Although some may use these terms interchangeably, there are several differences:
Pre-qualifications:
What Does a Real Estate Agent Do for A Buyer?
A real estate agent has several duties when helping a client buy a home, plus a lot of "behind the scenes" activities of which buyers may never know. At the beginning of the home buying process, your real estate agent can put you in touch with a trusted mortgage lender so that you can get a mortgage pre-approval. After you have been pre-approved, your real estate agent will have a conversation with you to learn more about what you hope to find in a home. Price and location are typically the two biggest drivers of a buyer's interest in a given property.
If I Don’t Have to Pay a Commission, What Fees Are Involved in Purchasing a Home?
Buyers can expect closing costs to be about 2 to 3 percent of the home's sales price. There are some fees you will only have to pay once and others that will be recurring. If you're planning to buy a home in Washington and working with a licensed real estate agent, there’s one key document you’ll need to sign: the Buyer Broker Agreement (BBA). This agreement outlines the terms of your relationship with your agent, including how they are compensated. Think of it as the “engagement ring” of the home-buying process — formalizing your partnership while still giving you flexibility.
What Kind of Credit Score Do I Need to Buy a Home?
Credit score requirements vary depending on mortgage program guidelines. Most loan programs require a credit score be 620 or higher. If your credit score is lower than 620, you may still be eligible for certain loan programs that come with a higher interest rate. Higher interest rates offset the mortgage lender's risk; buyers with lower credit scores are shown - statistically - to be riskier borrowers. However, a lower interest rate might be available if you can come up with a higher down payment.
Can I offer less than the asking price?
If you want to offer less than the full asking price of a home, knocking off a few percent from the list price usually won't scare too many sellers away. If you're thinking about a lowball offer, be very careful. Work with your agent to research the market and make sure you're not putting in an offer that will not only be rejected, but will irritate the sellers to the point that they will no longer negotiate with you. If the home is listed for $700,000, but most of the homes in the area that are similar have sold for $650,000, you are probably safe to put in a lower offer than the $700,000 asking price. If the sellers refuse your offer and you still want the house, you'll have to get closer to the asking price to make the deal happen. If the home has been sitting on the market for quite some time, and the sellers are eager to move, you can consider that data point, too.
What Are Lender Fees?
When a Bank or Financial Institution Processes and Funds a Loan, There Are Several Fees Involved, Including Application Fees, Recording Fees, Underwriting Fees, and More. Although This Will Vary Case-By-Case, the Costs Will Typically Amount to About One Percent of The Mortgage Amount. So, if You Are Taking a Mortgage for A $100,000 Home, You May Pay $1,000 in Lender Fees. as Mentioned, This Will Vary, so It Is Best to Discuss Exactly how Much You Will Be Expected to Pay when You Meet with Your Mortgage Lender.
What Is the Standard Down Payment Amount?
Your Down Payment Will Depend on The Loan Program for Which You Are Approved.
What Is a Home Inspection (and Should I Get One?)
A Home Inspection Involves Hiring a Certified Home Inspection to Review the Home’s Hvac System, Plumbing, Electrical, Roof, Attic, Floors, Windows, Doors, Foundation, Basement, and Structural Components. They Will Then Provide a Written Report that States What Needs Repair (if Anything at All). I Strongly Advise Getting a Home Inspection.
Is a Final Walk-Through Necessary?
Although a final walk-through isn't completely necessary, a good agent will recommend it and schedule one for you. A final walk-through allows you to make sure that all repairs you requested are complete. You also want to make sure that new issues haven't turned up (leaks, etc.) so that you can move in after the closing without a hitch. Source: Great Vancouver Homes/Tony Mariotti
