Home Buying FAQ

Frequently Asked Questions for Home Buyers

Welcome to our home buyer FAQ page! Here, we’ve gathered answers to the most common questions home buyers like you often ask us. Whether you’re buying your first home or looking for tips on navigating the market, you’ll find helpful information to make your home-buying journey smoother and more understandable. Dive in to get clear, straightforward answers that will help you feel confident and prepared as you step into the world of real estate.

Getting Started

  1. What is the first step in buying a home?
    • The first step is getting pre-approved for a mortgage to know how much you can afford.
  2. How long does it take to buy a home?
    • Typically, it takes between 30 to 60 days from the offer acceptance to closing, depending on various factors like financing and inspection.
  3. What is the difference between being pre-qualified and pre-approved?
    • Pre-qualification is a quick assessment of your ability to afford a home, while pre-approval is a more thorough review involving a credit check and financial background analysis.
  4. How much down payment do I need?
    • The amount can vary, typically between 3-20% of the home’s price, depending on the type of loan you secure.
  5. What should I prioritize when searching for a new home?
    • Consider what’s most important to you, such as the size of the home, location, school districts, amenities, and your long-term lifestyle needs.
  6. What types of home loans are available?
    • Common types include fixed-rate, adjustable-rate, FHA, VA, and USDA loans.
  7. How do I make an offer on a home?
    • Your real estate agent will draft an offer letter including the price, terms, and contingencies, which you will sign before it’s submitted to the seller.

Home Buying Financial Questions

  1. What are the hidden costs of buying a home?
    • Beyond the down payment, buyers should consider closing costs, property taxes, homeowner’s insurance, and potential HOA fees.
  2. Can I buy a home with a low credit score?
    • Yes, there are programs available for buyers with low credit scores, but options might come with higher interest rates or require a larger down payment.
  3. What are closing costs, and how much are they?
    • Closing costs are fees and expenses you pay to finalize your mortgage, typically 2-5% of the loan amount.
  4. How can I save on homeowner’s insurance?
    • Shop around, bundle policies, increase your deductible, and make safety updates to reduce premiums.
  5. What is a good interest rate for a mortgage?
    • A good rate depends on the market conditions and your credit profile. It’s best to compare offers from several lenders.
  6. How can I improve my credit score before buying a home?
    • Pay down debt, avoid new credit inquiries, and ensure your bills are paid on time.
  7. What are the benefits of a 15-year vs. a 30-year mortgage?
    • A 15-year mortgage saves on interest but has higher monthly payments, whereas a 30-year mortgage has lower monthly payments but costs more in interest over time.
  8. What is PMI, and when is it required?
    • Private Mortgage Insurance (PMI) is required on conventional loans when the down payment is less than 20%.

Home Inspection and Negotiation

  1. What should I look for during a home tour?
    • Check the condition of the roof, foundation, HVAC system, plumbing, and electrical systems, as well as the overall layout and functionality.
  2. Can the seller reject my offer?
    • Yes, a seller can reject any offer for any reason, including offer price, terms, and contingencies included by the buyer.
  3. What happens if the appraisal comes in low?
    • If the appraisal is lower than the offer price, you can renegotiate with the seller, pay the difference, or cancel the contract under certain contingencies.
  4. What does a real estate agent do?
    • A real estate agent helps you find homes, negotiate the deal, and handle paperwork and negotiations.
  5. Can I negotiate the sale price?
    • Yes, buyers can negotiate the price based on market conditions, the home’s condition, and other factors.
  6. What happens if the home inspection reveals problems?
    • Negotiate repairs or credits with the seller, or possibly withdraw your offer if major issues are uncovered.
  7. How many homes should I view before making an offer?
    • There’s no set number, but viewing 5-10 homes is common. It’s important to take your time and find a property that meets your criteria.

Closing the Deal

  1. What are contingencies in a real estate contract?
    • Contingencies are conditions that must be met for the transaction to proceed, such as inspections, financing, and appraisals.
  2. What happens at a real estate closing?
    • You’ll sign legal documents, pay closing costs, and finalize the mortgage, after which the property will be officially yours.
  3. When do I get the keys to my new home?
    • Typically, you’ll receive the keys at closing after all documents are signed and funds are distributed.
  4. What should I do before closing on a home?
    • Conduct a final walk-through, ensure funds are in order, and review all closing documents carefully.
  5. What should I avoid doing during the mortgage application process?
    • Avoid major purchases, job changes, or taking on new debt, as they can impact your credit score and loan approval.

Legal and Insurance

  1. What is title insurance, and do I need it?
    • Title insurance protects against past title defects. It’s recommended to safeguard your investment.
  2. What legal considerations should I be aware of when buying a home?
    • Be aware of zoning laws, property rights, and local regulations that could affect your property and how you use it.
  3. What is an escrow account?
    • An escrow account holds funds, like property taxes and insurance, to be paid when due during the life of the mortgage.
  4. What does it mean to be ‘underwater’ on a mortgage?
    • Being underwater means you owe more on your mortgage than your home is currently worth.

Market Insights

  1. Should I buy a fixer-upper?
    • If you’re prepared for potentially extensive renovations and have a flexible budget, a fixer-upper can be a good investment.
  2. What is a buyer’s market?
    • A buyer’s market occurs when supply exceeds demand, giving buyers an advantage in negotiations.
  3. What is a seller’s market?
    • A seller’s market occurs when demand exceeds supply, often resulting in higher prices and quick sales.
  4. How do property taxes work?
    • Property taxes are annual taxes that homeowners pay based on the assessed value of their property.
  5. Should I consider schools when buying a home?
    • Yes, even if you don’t have children, as schools significantly impact home values and resale potential.
  6. How do I know if a home is overpriced?
    • Compare the home’s price with similar properties in the area. Your agent can provide a comparative market analysis.

Lifestyle and Additional Considerations

  1. Can I buy a home and sell my current one at the same time?
    • Yes, but it requires careful coordination and might involve bridge loans or contingent offers.
  2. What are the benefits of homeownership?
    • Benefits include potential appreciation in value, tax benefits, and the freedom to customize your living space.
  3. Should I buy a home warranty?
    • Buying a home warranty can be a wise decision to cover the cost of repairing or replacing major components like plumbing and appliances.
  4. What are the risks of buying a home?
    • Risks include market fluctuations, unexpected repairs, and the potential for financial stress.
  5. Can I back out of buying a home?
    • Yes, if within the contingency periods or if significant issues are discovered that were not previously disclosed.
  6. How often can I refinance my mortgage?
    • There’s no limit on how often you can refinance, but it needs to make financial sense in terms of costs vs. benefits.
  7. What are the advantages of buying vs. renting?
    • Buying offers potential for appreciation, tax benefits, and personal customization, whereas renting offers flexibility and minimal maintenance responsibilities.

Community and Neighborhood

  1. What should I know about homeowners’ associations (HOA)?
    • Understand the fees, rules, and regulations as they can affect your homeownership experience.
  2. How can I determine my housing budget?
    • Factor in your income, existing debts, down payment, and potential homeownership costs to find a comfortable range.
  3. How do I know if the neighborhood is safe and pleasant?
    • Research crime statistics, visit at different times of the day, and talk to neighbors to get a sense of the community.
  4. Can I buy a home directly from the owner?
    • Yes, buying a home directly from the owner is possible, but it’s wise to have professional guidance to handle the paperwork and negotiation.

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Contact Team MVE | Streetlight Realty

If you’re thinking about buying a home in the Miami Valley, you should definitely talk to Jonas Helbert and Katie Masters from Team MVE. They know a lot about homes and can help you understand all about mortgages and how much you might pay each month.

Get in touch with Team MVE:

Jonas and Katie are ready to help you find the perfect place to live in the Miami Valley, whether you’re moving for a new job, school, or just because you like the area. They make everything about buying a home easy and fun. Call them today to start looking for your dream home with Team MVE!

The Miami Valley Experience Team MVE Streetlight Realty