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For Your Protection, Get a Home Inspection
Home inspections at a minimum can provide peace of mind or even possibly allow you to negotiate with the seller to have certain repairs completed.
The ability to have a home inspection completed is negotiated as part of your offer. You can indicate in your offer that you wish to do an inspection and whether the offer is contingent on your home inspection. A time frame is set in which you agree to have your home inspection completed along with negotiating any repairs if needed.
You can use anyone to conduct your home inspection but it’s recommended that you use a qualified professional that does home inspections full time. Professional home inspectors will use exhaustive checklists to make sure every part of the home that is accessible is inspected. The cost of an inspection usually starts around $500 but can go up from there depending on what other services you wish the home inspector to complete.
After your inspection, the inspector will walk through the house with you and put together a report. Inspectors will find problems with every house, however, it’s up to you if the problems found are deal breakers or not.
What is the First Step? Getting Pre-Approved or Meeting with an Agent?
What is the first step you should take when you’ve decided it’s time to purchase your first home?
Either meeting with a trusted mortgage lender or real estate agent is a great first step!
It’s important to align yourself with people you trust early on in the process. If you already know and trust a real estate agent, they can get you started by walking you through the process and referring you to a mortgage lender. Vice versa, if a mortgage lender is your first contact, they can refer you to a real estate agent they feel would be a good fit for you.
What is Equity: Understanding Real Estate Vocabulary
Equity is the share of your home that you “own” (have paid off) versus what you still owe on your mortgage (and any other liens you might have).
For example, if your home is worth $330,000 and you have a remaining mortgage balance of $280,000, your home equity would be $50,000.
Your equity will increase as you continue to make your payments. As time goes on, more and more of your payment will go toward the principal balance increasing your equity more rapidly.
Market fluctuations can also impact your equity. Your equity will increase with appreciation but decrease with depreciation.
Down-Payments: The Facts and the Fiction
One of the biggest hurdles many first-time homebuyers face is coming up with a down payment. However, many don’t realize the many options available to them.
One of the biggest myths about down payments is that you need 20% of the purchase price. This is far from the truth. Here are some loan programs that allow less than 20%.
- Conventional – as low as 3%
- FHA – as low as 3.5%
- Rural Development – as low as 0% but the location must qualify.
- VA – as low as 0% but only available to veterans.
There are also a few down-payment assistance programs available that may cover some or all of your down payment. We can connect you with a lender to learn more about those or to find out if you’re eligible.
What is Earnest Money: Understanding Real Estate Vocabulary
This is like making a down payment. An earnest money deposit shows that you are committed to buying that house. It is deposited within a few days of your offer being accepted. The earnest money is typically credited back to the buyer at closing. If the transaction doesn’t close, the earnest money may refunded to the buyer or retained by the seller depending on how the purchase agreement is written. Typically if the buyer decides to back out of the purchase agreement during the inspection period or is unable to obtain the financing outlined in the purchase agreement, the earnest money will be refunded to them.
What is a Mortgage: Understanding Real Estate Vocabulary
While you may be thinking, I know what a mortgage is, this is a silly term to be included, it’s probably one of the most used words in real estate so it’s good to revisit and burn into your brain.
A mortgage is a loan agreement between a lender and the home buyer (you), that lets you borrow money to purchase (or refinance) a home. This agreement gives the lender the right to take possession of your property if you fail to repay the money you’ve borrowed. There are many different rates for mortgages, and it’s smart to choose a lender that gives you the best interest rate.
Statistics and Perspective: A real estate update
As home purchases are slowing down another real estate sector is heating up.
