a home is not just about pricing and negotiation. A great deal of the process
has to do with how well--or how poorly--a buyer is prepared for making the purchase.
This preparation does not need to take a great deal of time, and most of it can
be done from the comfort of your current home or office, but it is important to
spend some time getting ready before running off to look at specific homes. On
this page you will find answers to common questions regarding the buying process.
Be sure to check back with my site frequently, as I am constantly adding more
Is a Pre-approval Letter Necessary?
Getting a pre-approval letter from a lender before you start looking at homes
tells sellers that they are dealing with a qualified buyer when you present an
offer, and you won't waste time, or fall in love with a home that is beyond your
How much house should you buy?
answer to this has a lot to do with your income and the amount of your debt load.
As a rough rule of thumb, most home buyers purchase houses that cost between 1
1/2 and 2 1/2 times their annual income. For example, a home buyer earning $40,000
per year would buy houses costing between $60,000 and $100,000. There is, however,
a degree of variation due to the individual market prices of the area in which
you are interested. In some areas, there may not be houses available within that
range, so you may need to spend a bit more. In general, however, your monthly
mortgage payment cannot exceed approximately 28%-29% of your gross monthly income.
Your total debt payments (car payments, credit card payments, etc. plus the monthly
mortgage amount) cannot exceed approximately 36%-40% of your gross monthly income.
These ratios will depend on the type of mortgage for which you are applying.
Why should you use an agent to buy a house?
you don't need an agent to buy a house, but it is a good idea for two reasons.
First, in virtually all situations, the buyer does not pay a commission, so the
services of an Agent working for you are paid for by the seller. Second, without
an Agent, you may be missing valuable representation of your interests.
How can you be certain that you are getting a good deal on a mortgage?
a word: Compare. There is a good deal of variation in the mortgage market, not
only from week to week, but from lender to lender. Many newspapers list current
mortgage rates for your local area in their Real Estate sections, often on Saturday
or Sunday. Check them. I will provide you with several lenders names and numbers.
How much should you offer for a house?
is no simple answer to that question, since each property stands on its own. A
particular house may be overpriced (you should make an offer BELOW the listing
price), "on-the-money" (you should make an offer at or just below the
listing price) or under priced (you should grab it before someone else does!).
Why should you spend the money to have a home inspection?
is vital. The $350 to $500 that a professional home inspection costs could be
the best money you ever spend on your house. Not only does the home inspection
seek out any defects (and gives you some peace of mind), the home inspector will
often give you tips on maintaining and repairing your house. I will provide you
with several names and numbers of reputable inspectors.
Why will you need an appraisal?
appraisal is an opinion of value of the home you want to purchase. Virtually every
lender will require some sort of appraisal before the loan is approved.