Working with first-time homebuyers presents its unique questions and challenges.
PUNTOS CLAVE
Top 5 First-Time Homebuyer Questions
Q: Is it better to buy instead of rent?
Homeownership gives you more than just a place to live. Owning your home gives you greater stability and permanence than renting. Financially, homeowners benefit by building equity and deducting some or all of their mortgage interest and property taxes.
Renting, on the other hand, offers greater flexibility if your life circumstances change. However, selling under such circumstances is stressful. You don’t get the financial benefits associated with homeownership, but you won’t be responsible for the cost of household repairs.
Q: Should I use a real estate agent when buying my first home?
An agent handles all aspects of buying a home, which is a complex process.
The agent will will learn your needs and desires for a home, then narrow down the search by showing them homes that fit your profile. No need to waste your time looking at properties that won’t work for you and your family.
An agent also, has valuable insights about neighborhoods, schools, recreational amenities, shopping areas, and planned new development.
Once you select a house, an agent will help you determine the offer that will fit your budget while hopefully securing the house.
Then, once you go under contract, your agent will help you with the home inspection and appraisal process
and assist with contractors needed for repairs before closing if required.
Lastly, your agent will help guide you through the closing
process, which can be complex and intimidating.
Your Real Estate Agent is your TRUSTED ADVISOR
Q: Do I need to be pre-approved for a mortgage?
The short answer is yes. Pre-approval tells sellers you are a serious buyer, not a time-asting tire-kicker. It also lets you know how much house you can afford. What’s more, pre-approval means that when your offer is accepted, the process of getting a mortgage has already started. Mortgage pre-approval, by the way, is different than prequalification. The latter is a more cursory process.
Q: What costs will I pay at closing?
- A fee for the title search the title company conducts to determine whether there are liens and easements affecting the property.
- In certain states, a closing or escrow fee to the title company for managing the transaction.
- Attorney fees for review of escrow documents and mortgage loan paperwork.
- An appraisal fee for the lender
- Prepayment of two months of property taxes, homeowners insurance and mortgage insurance.
- Homeowners association transfer fees and first month’s dues
- Mortgage application, underwriting and origination fees.
- Per diem mortgage interest covers the time between closing and the first monthly payment date.
- A lender’s title policy
- In some states, an owner’s title policy
- Loan discount points paid to buy down the loan’s interest rate.
- Various fees for couriers, county clerk document recording, surveys, and miscellaneous other costs.
Q: Is now a good time to buy, or should I wait?
The phrase “marry the house, date the rate” has become popular recently. As rates change, there are two options: 1) lock in now to protect against higher rates; and 2) lock in now, and if rates go down, you can refinance your mortgage to lower your monthly payments. The main factor to consider is can your client afford the monthly payments comfortably at today’s rate.
Are you missing mortgage opportunities? Shop around for the best rate with the best terms. Educate yourself on the terms, interest rates, fees, and details of each loan offer. Don’t be afraid to interview lenders; make sure you use a lender with experience in your selected loan program.