When buying a home, home buyers are more than likely making the biggest financial decision in their life, and therefore have many questions….as they should. I have found that almost always the same questions pop up when I am working with Home Buyers. Maybe these are questions you have as well.
Here are top 5 Home Buyers Questions & Answers
Question 1: How much money do I need out of pocket to buy a house?
Answer: To get started, you’ll need money for your earnest money, appraisal and inspections up front. Some of these costs may be paid at the time of closing.
Question 2: How much should the earnest money be and when is it cashed?
Answer:Earnest money is typically 1% of the sales price and is applied to your down-payment OR closing costs at the time of closing. If you have a loan requiring no down-payment, such as a VA loan, lower amounts may be acceptable. Earnest money is NOT held until closing – it is cashed when all terms of the contract are agreed upon.
Question 3: Do I have to sell my house before I can put an offer on another house?
Answer: Unless your income is high enough to afford two house payments, you need to sell your home first. However, once your home is under contract, you can make an offer contingent upon the successful sale of your home.
Question 4: How much down-payment is needed?
Answer: FHA financing which requires a 3.5% down-payment. Conventional financing requires 5-20% and is not the best option unless you can put down 20%. VA financing does not require a down-payment. Here’s some tips on how home buyers can prepare for a mortgage application.
Question 5: How much are my closing costs and does the Seller help with those costs?
Answer: Many of your closing costs will be directly related to the price of the home you are purchasing. Some costs are associated with your loan, and some are related to charges from the title company. The Seller can contribute up to 6% of the sales price towards your closing costs.
Remember no question is a “stupid” question, after all you don’t buy a house every day. Realtors expect you to ask questions. If you are ready to buy a home, give me a call! 480 688-2000.