Home Buying FAQ’s

319ae7f04ff001d6dacdff45c39ee8ffHow much should I put down on a house?

Pay as much as it takes to get the loan you want. The more you pay upfront, the smaller your loan amount will be and the less you’ll pay out in interest later.  The larger your down payment is, the more money you save. But remember, you will still need to pay closing costs and other moving expenses. With all that being said you should try to pay about 20% of the total home cost. With conventional mortgages, if your down payment doesn’t equal at least 20% of the total home purchase price, you’ll have to pay for private mortgage insurance, which will cause your monthly mortgage payments to increase.  FHA loan is 3.5% down and conventional starts at 5% down.  VA and USDA loans are still 100% financing.

So I have found a home I want, how do I make an offer?

The first thing that happens is your official offer, or bid. When you make the offer, you have to keep in mind that it could easily become a legally binding contract if the seller accepts it. Because of this, you need to make sure the offer includes all of the contingencies, concessions, and other details you need it to cover. You really need to work with your realtor.

What is a contingency?

Contingency can be defined as a contingent event; a chance, accident, or possibility conditional on something uncertain. In the home buying world, it is a provision in a real estate contract that specifies the contract would cease to exist upon the occurrence of a certain event.

How does escrow work?

The principals to the escrow, buyer, seller, lender, and borrower, cause escrow instructions, most usually in writing, to be created, signed and delivered to the escrow officer. If a broker is involved, they will normally provide the escrow officer with the information necessary for the preparation of your escrow instructions and documents. The escrow officer will process the escrow, in accordance with the escrow instructions, and when all conditions required in the escrow can be met or achieved, the escrow will be "closed."

What happens at closing?

Closing day is the day the homebuyer and the seller complete the legal transfer of the house. Once the closing process has been completed, the keys to the house are given to the buyer. You will sign papers that legally turn the house over to you and pay the closing costs. You will also find out exactly how much you will be paying every month.

How much is the average closing cost?

In general a good estimate is 3% of the purchase price. It really depends on how much you loan is for and if the sellers are willing to help out with the cost. Sometimes you can make it a part of the deal that the seller pays some, or all of the closing cost. But do not count that, make sure you have saved money to pay for closing costs as well as the down payment?

Why should I buy a house?

Buying a house is an investment. Eventually you will no longer have to pay for that home. Also, when you own a home, you gain equity. As the value of the home goes up, you are making money. Home owners also get a tax deduction every year that renters do not. When you own a home you can do whatever remodeling and renovations you would like to do. If you know you are going to be living in one house for a while, you should consider purchasing a home.


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