It may be tempting to step into the home buying process without a Realtor with all of the access to information we have today.  We can turn to our trusted online sources like Google or many of the other real estate specific sites that can answer everything from finding a mortgage lender to how to find an appraiser, but in reality, each step of the home buying process is likely to create a new set of questions and relying solely on what you can research either through online sites or through friends and family is likely going to cost you time and money in the long run.

Knowing the answers to the 10 most common home buying questions can alleviate some of the stress that comes with buying real estate.  Buying a home can be a very stressful time in your life and somewhat terrifying if you don’t have an expert by your side.  Having a good Realtor will make the process seem much less intimidating and in general make the entire transaction much smoother.

What’s the first step of the home buying process?

Answer: 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. There are online calculators that can assist in this step, but it is always best to find a lender that can help with this process, and another thing to remember is to shop around for the best rates.  This is the first-step in the home buying process.

How long does it take to buy a home?

Answer: Around 30 days

The more appropriate question might be how long once you find a house and have an accepted offer does it take to buy a home?  The answer to that is usually around 30 days to close.

The timeline for finding a house varies greatly from person to person. Some folks might get lucky and find their dream home upon their first visit, yet others might take years to find the perfect home.

What does a realtor do?

Answer: Almost everything.

A Realtor is your most valuable asset when buying a home. They will walk you through every part of the home buying process. They will educate and inform you of all your options. They will represent you throughout the transaction and beyond.

There is a difference between a Realtor and a real estate agent; many people do not know this. A Realtor is regulated by the National Association of REALTORS® and subscribes to a strict Code of Ethics. A real estate agent does not. It is recommended that you work with a licensed Realtor to avoid potential problems.

How much do I have to pay a Realtor as a homebuyer?

Answer: Nothing

In most cases, you do not have to pay your Realtor anything to help you purchase a home. The sellers pay their Realtor a fee, and then that listing agent pays the buyer’s agent for bringing the buyer and facilitating the transaction.  An exception may be if you purchase from a For Sale By Owner using a Realtor – then there might be a possibility of you having to pay your Realtor.

What’s your best advice for first-time homebuyers?

Answer: Trust the professionals.

An experienced real estate broker or agent will assist you all through the process: the home search, comparable homes sold, making an offer, inspection, repairs, and the appraisal, as well as help you find the best value, neighborhood, and quality home for your budget and requirements.

What kind of credit score do I need to buy a home?

Answer: There is no hard-and-fast-rule

Currently, VA home loans require no minimum credit score, FHA minimums range from 500 to 580, USDA loans have a FICO floor of 640, and conforming loans require a minimum credit score of 620.

There’s no secret, a higher credit score offers better lending terms. This is an ever evolving topic because loan requirements are constantly changing.

Your loan officer will be the best source to give you a current answer for today’s lending requirements.

Are there special home buying programs that I should know about?

Answer: Yes

There are some great home buying programs to research. The main ones would be VA loans, USDA loans, and FHA loans. Knowing the difference between these loan types is very important.

In addition, each state offers a different number of programs, and each state offers varying levels of buyer assistance.

How much money do I need for a downpayment?

Answer: It depends on your loan type. Typically you will need to between 5 to 20 percent.

The higher your down payment, the lower your monthly mortgage payment will be.

For today’s most widely-used purchase mortgage programs, downpayment minimum requirements are:

FHA Loan: 3.5% downpayment minimum

VA Loan: No downpayment required

HomeReady™ Loan: 3% downpayment minimum

Conventional Loan (with PMI): 3% downpayment minimum

Conventional Loan (without PMI): 20% downpayment minimum

USDA Loan: No downpayment required

Jumbo Loan: 10% downpayment minimum

What other fees are there, besides the downpayment?

Answer: Mainly loan origination and closing costs.

The downpayment is usually the largest cost associated with buying a house. 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.

Other fees may include earnest money, moving expenses, home inspection and appraisal.

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?

Answer: At Closing

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.

Do you have a real estate question that you would like answered? Feel free to contact me directly.

Remember, a good Realtor is your best source of information when buying a home. Once you have a Realtor that you trust, start asking as many questions as possible. They will gladly inform and educate you through each step of the home buying process.