Charlottesville Real Estate

First Time Buyers & Answers to FAQ about Buying a Home

Buying your first home can be an intimidating process.  Making the decision to purchase a home is the first step.  You will join the more than two thirds of American households who own their home.  They know the benefits of home ownership, from the accumulation of home equity, tax incentives, as well as, the pride of owning a place of their own.  The idea of purchasing your first home is bound to bring many questions.  This is a natural reaction.  I am committed to assist you in understanding the entire home buying process, explaining what you need to know during every step along the way.  Call or email me to request your Home Buyer Workbook that covers the basics of buying your first home.  I am happy to help.  Contact me today and let’s get started!

 

The following information is courtesy of the National Association of Realtors.

Common Questions about buying your first home:

–How do I find a mortgage lender?

You can finance a home with a loan from a bank, a savings and loan, credit union or mortgage company.  Shopping for a loan is like shopping for any other large purchase: you can save money if you take the time to look around for the best customer service and loan packages.  Choosing a loan officer that is familiar with the most recent loan programs offered will allow you access to the latest in the changing world of financing.  It is vital that you are comfortable with your loan consultant and feel all your questions are answered.  I have lenders in the area that I have worked with that will provide you everything you need to ensure your loan process is a smooth one.  Contact me today for lender references to ensure you are getting the best mortgage loan for your needs. 

–I know there are different types of mortgages, how will I know which is best for me?

There are many different loan packages today.  Your loan officer will be able to tell you about the most recent mortgage programs and changing requirements for different loans.  Most people use a fixed-rate mortgage.  In a fixed-rate mortgage, your interest rate stays the same for the term of the mortgage, which is normally 30 years.  The advantage of a fixed-rate mortgage is that you always know how much your payment is going to be and you can plan for it.  Another kind of mortgage is an Adjustable Rate Mortgage.  With this kind of mortgage, your interest rate and monthly payment usually start lower than a fixed rate mortgage.  But your rate and payment can change either up or down.  There are also several government mortgage programs that your loan advisor can let you know if you might qualify.

–What do I need to take with me when I apply for a mortgage?

1. Social security numbers for you and your spouse

2.Copies of your checking and savings account statements for the past 6 months.

3.Evidence of any ohter assets, such as stocks or bonds.

4.A recent paycheck stub

5.A  list of all credit card accounts and the approximate monthly amounts you owe on each.

6.A  list of account numbers and balances due on outstanding loans, such as car loans.

7.Copies of your last 2 years income tax statements.

8.The name and address of someone who can verify your employment.

–How much money will I have to come up with to buy a home?

The answer depends on a number of factors, such as the cost of the house and the types of mortgage you get.  In general there are three main costs:

Earnest money-the deposit you give the seller when the offer is made.  When you make an offer on a home the real estate broker will put your earnest money into an escrow account.  If the offer is accepted, the earnest money will be applied to the down payment or closing costs.  If your offer is not accepted, the money is returned to you.

Down Payment-a percentage fo the cost of the home that is paid when you settle.  Your down payment will depend on the loan program you use to finance. 

Closing Costs-the costs associated with processing the needed paper work to buy a house.  The average closing costs can be 3% of the cost of the home.  When you apply for your loan, the lender will give you an estimate of the closing costs.

What will happen at closing?

You will sit at a table with your Realtor and closing agent to sign papers related to your home purchase.  While your closing agent will give you an explanation of each paper you sign, you will want to look over and read each form and consult your agent if you have questions.  Before you go to closing your lender is required to give you an explanation of clsoing costs, a “good faith estimate” of how much cash you’ll have to bring to closing, and a list of documents, if any you will need at closing.  Don’t ever hesitate to ask questions about the documents or process.

What will my mortgage cover?

Most mortgages have 4 parts that are covered:

-Principal: the repayment of the amount you actually borrowed.

-Interest: payment to the lender for the money you have borrowed.

-Homeowner’s Insurance: a monthly payment required to insure the property from loss against hazards such as fire and theft.

-Property Taxes: city or county taxes assessed on your property, divided by the number of mortgage payments over the year.