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Common Questions for Home Buyers

Why Should I Buy Instead of Rent?

 

Home buyers have a higher average net worth than renters. A survey conducted by the Federal Reserve determined that a homeowner with an annual salary of approximately $30,000 has a net worth of $112,600, while a renter with the same salary has a net worth of $4,240.

 

How Much Money Will I Need as a Down Payment?

 

Typically, lenders require a 20% down payment. However, if the buyer has private mortgage insurance, the 20% requirement is waived. In fact, there are now loans and special programs that make it possible to purchase a home with 0% down. Keep in mind, the lower your initial down payment, the higher your monthly mortgage payments will be.

 

How Long Does the Process Take?

 

The home closing process can take anywhere from 30 to 60 days. However, if both the buyer and seller agree to close before 30 days, the closing process can be completed in as little as 15 days.  

 

 

Do I Need an Attorney?

 

Depending on which state you are purchasing your home, you may be required to hire a real estate attorney. If you are not comfortable signing a legally binding real estate contract, you will benefit from the guidance of a real estate attorney.

 

 

Are there Discounts for First Time Home Buyers?

 

In February, 2009 President Barack Obama signed a stimulus package that included a tax rebate for first time home buyers. The first time home buyer tax rebate amounts to $8,000 or 10% of the final sale price, the lesser amount will be awarded.

How do I Go About Getting Approved?

 

The first step in being approved for a home mortgage loan is prequalifying for a loan. The prequalification process is based on your credit history, employment history, the type of loan you are applying for and an estimated price of the home you want to purchase. Not everyone will prequalify for a loan. But, if you do, the likelihood of being approved for a home mortgage is close to 100%.

 

How Long Do I Need to Be at My Current Job?

 

A steady employment history is ideal when applying for a home mortgage loan. However, there are alternative employment situations that are taken into account when being approved for a loan. The employment history of small business owners and freelancers is evaluated differently because of the nonconventional situation.

 

What are Points?

 

Each point is equal to one percent of the total loan amount. Points are paid upfront by the borrower to the lender and can be used to lower interest rates.  

 

 

How Can I Buy a Foreclosed Home?

 

If you are interested in buying a foreclosed home, it is in your best interest to hire a real estate agent that specializes in foreclosed listings. Some real estate agents with foreclosed listings will not accept offers from buyers who do not have representation.

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