Team Morales at Century 21 AllPoints Presents...
First Time Home Buyers Guide
So you have made the decision to buy a home—Congratulations!
Buying a home is a process, a series of steps that will lead to the ultimate goal of owning your own home. The first step is deciding where to buy when to buy, and who to hire?
Where it begins? Your credit score. The higher the better, but you will need at least a 580 to qualify for an FHA loan since they require only 3.5% down payment. Last is your work history, you'll need to show proof of at least 2-years of steady employment (doesn't have to be the same job).You can indeed have a lower credit score, but it'll cost you!
Credit Score Loan Qualifications:
Please note—this is just the basic info, there are more programs available, feel free to ask us, or a qualified Mortgage Lender!
If your credit score is:
500-570, you'll need 10-20% down payment
580 (FHA loan), you'll need 3.5% down payment
620 VA (Veterans Loan), NO downpayment
620 USDA Loan, NO downpayment
620 FHA 203k Loan (this is a rehab loan for homes that are in need of major repairs)
620 Conventional Loan, usually 10-20% downpayment
640+ These higher scores can possibly qualify you for NO DOWN PAYMENT!
These are basic credit score requirements, and there are hundreds of different loan programs available. A qualified Mortgage Lender can find the best program for you
Team Morales works with many great lenders, we can point you in the right direction.
Pre-approval: Unless you are paying cash for your home, you cannot buy a home without a mortgage preapproval. Preapprovals are done by mortgage lenders private or a bank, and they will ask for you documents such as tax returns .pay stubs. credit history and bank statements. It will then be determined just how much house you can afford. You cannot buy a home without one, and we have several awesome lenders that we use.
Since we are realtors and you're reading this, we'd love to work with you! We would be you’re ‘buying agent’. There is NO charge to you for this—we get paid by the seller of the home once the transaction is complete. After we've determined that you have a preapproval, and ask a few brief questions regarding your price range and what sort of home you prefer, we jump into the search and the fun begins! You should decide what you want in a home, what you need, and be prepared to compromise!
Once we find a house that makes everyone happy, we will write up an offer! This is the price you want to pay for the house. Your offer will be accepted, countered, or rejected. Once an agreement is reached, it takes 45 days for the entire process to be completed. Usually, a deposit is given at this time which comes off the price you have offered, so you do need some ready cash...
Once your offer has been accepted a home inspection is recommended, paid for by you. This must be done within 10 days of contract signing. A good home inspector will check your future home from roof to basement, all mechanical and structural functions of the home, plumbing electrical panels, etc. If something major is found, you can withdraw from the contract and get your deposit back with no penalty. A home inspection usually runs from $500 or more depending on the size of the home and required tests. Some homes are sold "as is" which means just that, they will not repair anything in the home and the inspection is for your info only. We ALWAYS suggest a home inspection.
At this stage, an attorney must be hired to prepare the closing documents as well as perform a title search of the home. Usually, the attorney's fee is included in the closing costs.
The closing costs are the fees paid by the buyer at the time of the closing date. These fees include taxes, home insurance, appraisal fees. Closing costs can vary but they usually range around 6% of the home price. Sometimes the seller will agree to help with the closing costs.
The walk-through is usually done the day before contract closing to make sure that everything is as it should be and that nothing in the house has been damaged or removed.
The big day! This is the day when the home officially becomes yours. Typically, the closing is held at your attorney's office, papers are signed and the keys are handed to you!
Costs of buying a home:
Deposit- Amount varies but the higher the better! This will hold the home for you and also comes off the total price of the home.
Inspection- This is NOT a requirement, but we always suggest it! A qualified home Inspector will run around $400-$600 depending on the size of the home.
Appraisal Fee- Ordered by your lender,and if seller is agreeing to cover closing,you will be reimbursed.Usually runs around $300-$400.This is done by the bank to make sure the home is worth the money you are paying for it!
Closing day- This is the BIG day! You are now responsible for your down payment,which can vary.
Different Home Types
Home types are different and varied. From a huge mansion to a tiny house, and in between. It can be confusing however, so I am going to try to give a good sample of home types here...but as always,compromise! 70% of the USA population live in single family
homes, so that's where I'll begin...
Cape Cod - usually modest in size with different layouts. Can have 2 -3 beds and has 2 floors
Ranch: One story living.Can have a basement and attic but all other rooms on one floor
Salt Box: This homes takes its name from the resemblance to a wooden lidded box in which salt was once kept and is identified by its asymmetrically long, rear roof line. The pitched roof that slopes down to the first floor was first created to cover a lean-to addition at the rear of the original house.
Log Cabin:This home is what it says it is: a cabin made of logs! Also known as a post and beam home in its larger form
Condominium: One floor living and is similar to living in an aparment except you own it! Includes an HOA fee: Homeowners Association, which covers indoor and outdoor building maintenance. However upkeep inside the condo is all yours. Usually rules apply such as pets and what is allowed on a balcony if one is present.
Multi family: Can be several floors,each containing a complete apartment which are usually rented out.
Mobile Home:a large trailer or transportable prefabricated structure that is situated in one particular place and used as a permanent living accommodation.
Bungalow- Usually all on one floor with a low pitched roof and usually a porch
Raised Ranch: A raised ranch has two levels, the lower level sunken below grade and an entry at grade halfway between the two floor levels. Lower level offers additional living space
Split Level: Split-levels include at least three distinct levels of living separated by short flights of stairs
Contemporary: Usually has clean lines and whatever architectural design is trending. Big windows usually unadorned and can vary in size
Townhome: Different than a condo as it has more than one level, often a garage.HOA fees also apply here.
Mansion: Large estate usually worth millions, many rooms and floors.
Tiny House :Last but never least the tiny house.
A miniature version of a home, sometimes inexpensive and often mobile.