FREQUENTLY ASKED QUESTIONS
You’ve Got Questions. I’ve Got Answers
What is the first step of the home buying process?
Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender will get you pointed in the right direction. Knowing how much you can afford to borrow; will keep you focused on the homes that you can afford. Getting pre-approved for a mortgage, also demonstrates that you are a serious buyer to both your real estate agent and the person selling their home.
What is a seller’s market?
In a seller's market, increasing demand for homes drives up prices. Here are some of the factors that make a seller's market:
• Economy
• Interest rates trending downward
• Low inventory - fewer homes on the market. Prices for existing homes may go up because there are fewer homes available.
What is a buyer’s market?
A buyer's market is characterized by declining home prices and reduced demand. Interest rates trending higher. The amount of money people can borrow to buy a home is reduced because the cost of money is higher, which then reduces the total number of potential buyers in the market. Home prices drop to meet the level of demand and buyers find better deals.
• High inventory – a new subdivision and can create downward pressure on prices of older homes nearby, particularly if they lack highly desirable features (modern appliances, etc.)
• Natural disasters - a recent earthquake or flooding can drastically affect property values.
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What kind of credit score do I need to buy a home?
Borrowers with higher credit scores represent less risk to the lender, often resulting in a lower the down payment requirement and better interest rate. Home shoppers with lower credit scores may need to bring more money to the table (or accept a higher interest rate) to offset the lender’s risk.
How much do I need for a down payment?
It depends on which loan you are looking to get. A conventional loan is typically 20% down. If you are a first home buyer and want to get an FHA loan, you will need 3.5% down. If you are looking for a VA loan (must have an active or retired military status for this type of loan) there is zero % down.