Hi, I’m Rachel Pope, REALTOR with Jean Scott Homes at Keller Williams Advantage Realty. Today I’m answering questions submitted from first-time home buyers about what goes into the home buying process.
Question #1: “Should I live somewhere with an HOA or without?”
This is largely a personal preference. Do you want to ensure that all the homes around you are well maintained on the outside? Do you want amenities within the community? If so, you probably need to go with a home in an HOA. If you want to be able to do “whatever you want” with your home and yard and not need approval, an HOA may not be for you.
Question #2: “I know it’s dependent on the cost, but what is the typical down payment for a mortgage, so that we can save appropriately?”
There are different types of loans that will have different minimum standards for down payment. A VA loan requires $0, but you must be active military or a veteran. An FHA loan requires 3.5% of the purchase price for your down payment. A conventional loan has a lot of options, ranging from 3%-20%, or anything above that you may be comfortable. The benefit of putting down at least 20% is that you do not have to pay PMI, or private mortgage insurance. This is an additional fee that you will pay monthly, up until the time you have paid off 20% of the loan. Also important to note is that you don’t need JUST down payment money in order to close on a home. A buyer also has an additional 3%-4% of the purchase price in closing costs, so please keep this in mind when saving up for a home purchase.
Question #3: “What do I need to have or know before I can start searching? What if I drive by a house and want to buy it? How long is the process between us finding a Realtor® and us putting an offer on the house we saw?”
Before you start looking we recommend getting pre-qualified by a lender. This will allow you to know exactly what your budget is, what your monthly payments may look like, and a breakdown of fees and costs associated with the loan. Once you have this you will be more familiar with the financial side of buying a home and can start searching. If you drive by a home and decide that it may be a good fit for you, you should contact your Realtor® to schedule a showing. Once you have seen the home and are sure you want to buy it, they will submit an offer on your behalf. There isn’t a specific time frame between finding a Realtor® and putting an offer on a home. This depends on your urgency, housing availability, and when something comes on the market that meets your needs. It could be a 2-day process from pre-qualification to offer or it could be a 60-day process. This is all based on your needs and criteria.
Thank you to everyone who submitted a question to us! We’ll be making more posts with answers to questions from first-time home buyers like you. Submit your questions to CustomerInquiry@JeanScottHomes.com.
