1) Where do I start? Always start with getting pre-approved for a mortgage.
Unless you are paying cash, then you will need proof of your funds. If you need a loan, then you will need to get pre-approved before you start your home search. There is nothing more disappointing for a buyer than to have to lower their expectations after they have seen homes above their price range. Sellers will not accept an offer without a pre-approval or proof of funds.
2) How Long does it take once I find the right home? If you are using financing it takes around 45 days.
Of course, the time it takes to find the right house depends mostly on you, the buyer, and the available homes on the market. Once you have an accepted offer, it takes around 45 days to close.
If you are using cash, you should be able to close in 10-14 days if the sellers are willing.
3) What Does My Agent Do? That is a good question with a long answer…but in short, anything that needs to be done for you to purchase a home.
Your agent is your partner in the home buying process. They will educate you about the process, inform you of your options, and assist you with every part of the home buying process. They will be your advisor, negotiator, and facilitator throughout the transaction.
You need to know that there is a difference between a real estate agent and a Realtor®. A Realtor® is regulated by the National Association of Realtors® and adheres to a Code of Ethics. A real estate agent does not.
4) How Much Does My Realtor® Cost Me? The short answer is nothing…with a bit of an explanation…
Most of the time, you don’t pay your REALTOR® directly. The sellers pay their Realtor® a commission, and then the listing agent typically splits that commission with the buyer’s agent.
5) What is The Best Advice for Homebuyers? Pick a Realtor® You Can Trust, Then Listen to Her/Him.
A good full-time Realtor® has probably sold hundreds of homes and stays educated on current real estate information and laws. Most of your friends and relatives have only bought or sold a few homes. I’ve seen first-time buyers listen to well-meaning friends or family, only to miss out on their dream home. It’s fine to get your friends and families input, but you need to trust your Realtor’s® educated advice.
6) How Good of Credit Score Do I Need? 640 or Higher…
Of course, as you probably already know, the higher your credit score the better your lending terms will be, including the interest rate of your loan. Loan requirements are constantly changing so your loan officer is your best source for any lending requirements.
7) What Home Buying Programs Are Available? There are several different government programs to assist buyers.
There are some great home buying programs to research. The main ones would be VA loans, USDA loans, and FHA loans. Knowing the difference between these loan types is very important. There are some local programs in Shasta County that provide down payment assistance for lower income borrowers. Again, your loan officer is the best person to get the details from since the guidelines do change.
8) How Much Money Do I Need for a Down-payment? That depends on the type of loan you use.
Usually it’s somewhere between 3% & 5% of the purchase price. Veterans who are eligible for a VA loan can finance 100% of the purchase price. Properties in rural areas are sometimes eligible for a USDA loan, which also requires no money down. Any down payment under 20%, except on VA loans, requires some type of private mortgage insurance.
9) What Other Expenses Are There Besides the Down Payment? There are loan origination fees and closing costs.
The down-payment is usually the largest cost with lender fees being the second largest costs to homebuyers. Most lenders will charge between 2% to 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 loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs.
Your Realtor® and Lender can give you estimates of your expenses prior to making an offer, so you won’t be caught short on cash after you find your dream home.
10) When Do I Get the Keys? You get the keys once the sale is recorded at the County Recorder’s Office.
Because California is an escrow state you will most likely sign the closing documents several days prior to closing. Once the lender has approved the loan documents for funding the loan funds will be wired to the escrow company. After one final check of all the documents and loan conditions the lender then will issue a clear to close. Then the escrow company is then released to record the transfer of the title and you will get your keys!!