Our Buyers’ Most Frequently Asked Questions

Our Buyers’ Most Frequently Asked Questions…Answered!

Our Dirty Little Secrets for Buying Your First Home

Buying a home for the first time can be confusing. That’s why the tips and strategies you’ll find in our 8-week series will set you on the right path. It’s our own unique approach and a “behind the scenes” glimpse of what you should look out for and consider when starting your own search for a home.

Buying a home, especially if it’s your first time, can be complex and confusing at times.  But, you are not alone!

Just like most first-time homebuyers, you want to make sure you don’t do something wrong. Or, you might worry that you don’t know what you don’t know!

We hear from our clients all the time about their concerns and questions when buying a home in today’s market.  That’s why we’re here to provide answers to some of the most common questions we get so you can become better informed and more reassured.

The questions swirling around in your mind are likely the same ones that other buyers, like you, want to ask too.  And, more than likely, it was the same questions that buyers who went before you have also asked!

We’ve heard your question before, and even if we haven’t, no question is ever a “dumb question,” so ask away!  And, if you have any questions that aren’t listed below here, reach out and ask!

Even though each buyer’s situation is unique, you’ll find the question/answer sections below helpful in giving you some insight on what steps might be best for you.

Plus, maybe you’ll also learn something “you didn’t know you didn’t know”!

Please note that I am not a Real Estate Agent, so please be sure to consult with your realtor on your specific neighborhood and property type.

Q:  How long does it take to get pre-qualified?

It depends…

A pre-qualification is typically completed in two parts.

The first part is an initial phone consultation that should take about 15 minutes. In this call I ask a few questions so I can gain a better understanding of the goals that you have for your home, physically and financially.

Who is going on the mortgage? How many people will be living in the household? What is your ideal monthly payment? How much cash do you have for down payment and closing costs? How long do you plan to own the home? Etc.

The second part takes place after you complete the online questionnaire and submit some paperwork to verify what we discussed by phone. We do a screen share consultation where we can review what options you have and what programs you may be eligible for.

All in all, you can expect to receive a response within 24-48 hours of submitting your pre-qualification application, but keep in mind that does not guarantee that you can get pre-qualified!

Q:  What paperwork will I need?

The paperwork requested will vary based on the loan program and your specific financial situation. The standard list includes your most recent 30 day pay stubs, your most recent 2 month bank statements, your most recent 2 year W2/1099’s, your most recent 2 year federal tax returns, and your photo ID.

Q:  What if I can’t get pre-qualified?

Don’t give up!

The best thing you can do is start planning for your mortgage early. In fact, if you are a first time home buyer, I recommend getting in touch 12 months before you want to buy. That way we can make sure you are financially prepared when the time is right. If you need to work on building up your credit or saving additional cash to buy the home your want, I can help you put that plan into place.

Q:  What if someone already pulled my credit, but I want a second opinion?

No problem! Your credit can be pulled as many times as you would like by the same type of lender within the same 30 day window without negatively impacting your credit score.

Not all banks and lenders offer the same programs and products, so if you are in the planning phase, it can be helpful to get several opinions.

Q: Is it worth it to find something faster when interest rates are low?

No!  Don’t let interest rates dictate your time to buy a home.  We are still in a period of historically low interest rates, but there is so much more that goes into the mortgage you get outside of just the interest rate. Things like – out of pocket costs, monthly payment goal, mortgage insurance costs, and so on.

A slight increase in your interest rate is not going to make the home you want unaffordable.  And, just like buying and selling other investments, such as stock, timing the market is never a good idea. 

Buy and sell when the time is right for you – not based on what interest rates are doing or are expected to do. Always go based on your own timeline and schedule.

One thing we know for sure—there will always be homes to buy. And, when interest rates rise a lot, that often times leads to a slight cooling of prices.

Q:  How do I get a good deal?

Good question and one we focus on for each and every one of our clients!  We always say, you make money when you buy in real estate, so making sure you buy right is HUGE. 

The one and only way to make sure you are getting good deal is to look at the specific neighborhood, building or block you are buying in and compare your home to what has sold over the last six months to a year. 

There will be a range in price depending on specific location (for example, a basement unit may sell for less) and condition (just renovated may sell for more).  Compare the home you want to buy with what has sold recently to make sure you are not overpaying. 

Also get information from your agent about whether it’s a sellers’ market or a buyers’ market, and make your offer accordingly.  The longer a home sits on the market, the more likely you can get a lower price. 

And please keep this in mind—just because something is “cheap” doesn’t mean it’s a good deal.  Be sure not to make this crucial mistake!

Q:  If the house I want is $20k over my price range, does that mean I can’t afford it?

Maybe, maybe not…

I always tell my clients to focus on your monthly payments, not just on a purchase price. By doing this, you’ll know what you may or may not be comfortable paying for a home every month.

In other words, focus on the fact that you want to pay, say, $2,500 per month on your new home and NOT on a somewhat arbitrary price point.

Why?

Because for every $10,000 change in price, your monthly payment only goes up about $50 per month.  When you look at it that way, you might be able to afford the home of your dreams or that home you just fell in love with.

So, that extra $20,000 price tag equates into an extra $100 per month.  Is that something you can handle? If so and it’s a home that has everything you’d ever want, go for it…as long as it doesn’t break the bank or make you need to change your lifestyle in any way that is uncomfortable.

On the other hand, if you buy something not as nice for less money, you might have to spend money on repairs, etc. You’ll need to weigh the pros and cons of each situation when determining what is affordable to you.

Next week is one of our most favorite articles — Is the “Paradox of Choice” Derailing Your Home Search? We tell you the secrets from this book that can help you focus on making a decision and not being overwhelmed by too many choices. You don’t want to miss it!