FIRST TIME HOME BUYER
frequently asked questions
Buying a house is a lot to wrap your head around -- especially as a first-time home buyer.
But if you know what to expect, it doesn't have to be stressful or confusing.
The home buying process can be broken up into phases, making it a lot easier to approach.
What's the first step of the
home buying process?
THE MORTGAGE PRE-APPROVAL
Unless you are paying cash for a house, you will need to get a mortgage. In order to know how much home you can afford, you will need to get pre-approved for a loan.
How long does the process
take to buy a home?
AROUND 30-45 DAYS
The timeline for finding a house varies greatly from person to person.
Once you find a house and have an accepted offer, it usually takes around 45 days to close.
How much do I have to
pay a real estate agent?
In most cases, you do not have to pay your real estate agent anything to help you purchase a home. The Seller pays their agent a fee, and then that listing agent pays the buyer's agent for bringing the buyer and facilitating the transaction.
What kind of credit score
do I need to buy a home?
A 620 credit score, or higher, is recommended. As you are probably aware, a higher credit score offers better lending terms. There are some lenders who will approve buyers with a 580 score, sometimes even lower. Your loan officer will be the best source to give you a current answer for today’s lending requirements.
How much down payment
do I need?
IT DEPENDS ON YOUR LOAN TYPE.
USUALLY 3%-5% DOWN.
The most common answer is 3% to 5% of the purchase price. FHA loans just dropped their requirement from 3.5% to 3.0%. There are also some conventional loans that only require 3% down. Veterans are usually eligible for a VA loan, which requires no money down.
Properties in rural areas are usually eligible for a USDA loan,
which also requires no money down.
What other fees are there
besides the down payment?
MAINLY LOAN ORIGINATION FEES AND CLOSING COSTS
Lending fees are the second largest costs to homebuyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees, depending on the loan type. Conventional loans usually have lower loan origination fees, but require more money down. Your loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs.
When do I get the keys?
Under normal circumstances, you will get the keys at the closing.
A closing typically takes about an hour. In some cases, the lender
will need time to fund the loan and you will need to pick up the keys
after the loan has been funded. If you have a Friday evening closing
and the loan cannot fund until Monday, you may not get the keys
until Monday. Make sure to coordinate your closing to get
the keys on the same day, if that is what you need.