Buyer's Toolbox: Frequently Asked Questions

Client: I want to purchase my own place, but not sure if I can afford it and have no clue where to start?

Mike: This web site is a good place to start. I usually have any potential clients start with the following:

Make a budget, take your last months bank statement and credit cards statements, write the amount of every expense you had for the month, add them up and subtract from your take home pay. Decide what you are comfortable paying per month. This should give you an idea of what you are comfortable paying per month for a mortgage.

Sit-down with myself to get more clarity on what you can afford, discuss what areas you are interested in compared to your budget, and go over how the whole home buying process works.

Get a pre-approval letter from a lender. This is a letter that has to be presented before you can make an offer on any home, it just states the buyers name and that they are approved for a purchase price X amount. This can generally be done over the phone and takes no more then 15 minutes.
 
Client: How much do I need for a down payment?

Mike: I highly recommend have 5% of the purchase price to use as a down payment. However, 3.5% is the minimum required for an FHA loan (government sponsored mortgage). There are down payment assistance programs out there making it possible to pay less then the 3.5%, but they often run out of funding and many people do not qualify for them. Regardless, I recommend any 1st time home buyers check with their mortgage broker about there availability.
 
Client: How much do I have to pay you?

Mike: Nothing. I obviously don’t work for free, but the sellers of the home you choose normally pay me. All homes listed on the MLS have a compensation fee listed for a buyer representative. It was created this way to make it easier for 1st time buyers with less cash to get equal representation as the sellers without having to pay a large fee.
     
Client: How long does it take to move-in once we found a house?

Mike: Once you have found a house and have an accepted offer the soonest you can move-in is usually one month from the acceptance. However, sometimes the sellers also have to find a new home which can put the transfer of ownership out even further.
 
Client: What is mortgage insurance? Do I need it?

Mike: Mortgage insurance is a monthly fee added to your mortgage payment that you have to pay to the lender. If you don’t put 20% down on a home you will have to pay mortgage insurance. The amount varies depending on the price of the home.
 
These are answers to just a few of the questions you must be having about making a home purchase. Know that Elliott Real Estate is here to answer all your questions and make the process as hassle free as possible. please e-mail us directly at: mike@mikethehomehelper.com or utilize our Perfect Home Search feature should you have a specific question.
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