Five Common Home-Buying Questions

So here we go with five common questions when buying a home:

1. How do I find out my price range?

Determining a price range should be one of your first steps when buying a home. When you know how much you can comfortably afford each month, you'll save time during the house hunting process by only visiting properties within your price range.

To determine your price range, sit down and compare your monthly income to your monthly expenses (savings, credit card payments, car payment, quality of life, etc.). How much is left? Your monthly mortgage should be less than this amount. Now you can use an online mortgage calculator to break each sale price down to a monthly amount, and determine if that amount is inside or outside your comfort zone.

2. Do I need a Realtor?

Here's the short answer ... yes! If you are buying a first home, you should have a Realtor. Buying a home is one of the biggest financial transactions you will ever make, so it's always wise to have professional help.

Your agent will help you find homes that match your price range and desired features. He or she will also help you validate the asking process (next item), write up the purchase offer, help you negotiate with the seller, and guide you through the rest of the home buying process.

3. How do I research the asking price?

The first thing to realize here is that it's called an "asking price" for a reason. The price set by the seller is never set in stone. It's what they are asking for, and you are free to make a counter-offer is you see fit. Your Realtor will help you validate the asking price by looking at comparable, recent sales in the area. This will tell you if the asking price is reasonable or over-priced, based on current marketing conditions.

4. Which type of mortgage loan should I choose?

This question is hard to answer. I am not a mortgage professional. I don't dare make a decision like that on behalf of a stranger. It's too important a decision for me to make for somebody else. I can, however, point you in the direction of the knowledge, to Scheetz Mortgage

While there is no obligation to use this lender, they can quickly pre-approve you without making a mark on your credit. They are true professionals and can answer any questions about mortgages, big or small. I encourage you to do your homework and decide what loan you are most comfortable with.

5. What happens at the real estate closing?

Basically, the real estate closing (also known as a "settlement") is when property ownership transfers from seller to buyer. All remaining fees will be paid as well, and these are known as closing costs. The seller gets their portion of the payment (minus what they still owe on the mortgage), and the deed is transferred to reflect the new owner.

As a home buyer, the best you can do is save more money than you think you'll need at closing, just to be safe. You should also make sure you receive a HUD-1 statement (or "settlement statement") at least one day prior to the closing date. This document gives you an itemized list of the costs you'll be expected to pay at closing. The Real Estate Settlement Procedures Act (RESPA) requires that the closing / escrow agent provide this document at least one day before the real estate closing.