Are you thinking about buying a home in Victoria, TX or the surrounding Crossroads area? Buying a home can be exciting and terrifying at the same time. There are many steps in the home buying process, and each step along the way raises new questions. Knowing the answers to some of the most common home buying questions can take away some of the stress and start you on the path to owning a new home.
This article will help you understand the basics of purchasing a home. Buying a home may seem intimidating, but a reliable Realtor will make the process much easier. Here are some of the most common questions we get asked by home buyers.
Unless you are paying cash for your house, you will need a mortgage. To find out how much house you can afford, you should first visit with a lender to get pre-approved for a home loan. This is a very important first step in the home buying process. With your pre-approval, you are ready to work with a real estate agent to find the right home and make an offer.
Pre-Qualified vs. Pre-Approved. Find out the difference!
The timeline for finding the house you want to purchase varies greatly for each person. However, once you pick the home you want to buy and your offer has been accepted, it usually takes around 30-45 days to close.
A Realtor is a highly valued asses when buying a home. They will guide you through every part of the home buying process. They will education and inform you of all your options and represent you throughout the transaction and beyond.
NOTE: A Realtor is licensed and regulated by the National Association of REALTORS, Texas Association of REALTORS and subscribes to a strict code of ethics.
When you purchase a home, it is normal practice for the seller to pay their Realtor a fee, and then the listing agent pays the buyer’s Realtor for bringing the buyer and facilitating the transaction.
Beware of advice from people who do not work in the real estate industry. Real estate is a popular topic, but the people who know best are ones that work in the business. Good Realtors have handled many transactions and know what to expect and what situations to avoid. Be confident in your decisions and trust in the professionals guiding you through the process.
A credit score of 620 or higher is usually recommended. This score will be compared to your debt-to-income ratio. A higher credit score offers more lending term options, however loan requirements are constantly changing. Some lenders will approve buyers with a 580 credit score, and sometimes even lower. A lender is the best source to give you answers for current lending requirements and options.
There are some great home buying programs for you to consider. The main ones are FHA loans, VA loans, and USDA loans. There are other options available with local lenders with 100% financing and other benefits to assist you with your purchase. We suggest you check with more than one lender for more options.
The most common answer is 3% to 5% of the home’s purchase price. Veterans are eligible for VA loans which require no money down. Properties is rural areas may also be eligible for a USDA loan, which also requires no down payment. Some local lenders offer programs with 100% financing as well. A loan officer will explain your downpayment to you as part of your loan pre-approval process.
The downpayment is usually the most significant cost when buying a house. Lending fees are the second largest cost. Most lenders will charge between 2-4% 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 lender will help you determine how much you can expect to pay towards loan origination and other closing costs. Be sure to ask them about private mortgage insurance (PMI) and ways to try to avoid that fee.
Closing costs may also include home inspection and appraisal, survey, document and recording fees, etc. The title company will provide you with a complete list of your expected closing costs.
Most buyers think they will get the keys at closing, and sometimes this does occur. More commonly, you will receive your keys after buyers and sellers have both closed and the lender has had time to fund the loan. For example, 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 and move-in times.
We hope that this has answered some of your questions. We can help make the home buying process easier and will guide you every step of the way to make your dream of home ownership a reality. Call 361.576.2353 with any additional questions you have.