Home Buying Advice

Buying a Home – Let’s Work Together

Buying a home is a labor of love, and although sometimes complicated, at Hicks Elite Realty Professionals, our realtors are trained to unravel that process and make searching for your next home rewarding and fulfilling.

Here are some of the most common questions we receive from buyers about to embark upon the adventure of buying a home:

Q: How much home can I buy?

A: Make a rough estimate of how much home you can afford based on your income and current debt – not on how much a bank will lend you. Financial experts recommend that your monthly debts be no more than 36% of your monthly income. For a more conservative estimate, base this on your take home pay rather than your gross pay. Take a look at your credit report as well – the better your credit, the better the interest rate banks or lending institutions will offer you.

Q: What should I avoid doing prior to purchasing a home?

A: Avoid doing anything that will damage your credit score, such as paying a bill late, taking on more debt or showing signs of instability. Also, avoid changing your job if you’re seriously considering buying a home in the next few months. You’ll want to show income stability on your application.

Q: Should I talk with a lender before applying?

A: A good lender will work with you to make sure your credit is in the best position possible and will make suggestions for improvement if she feels it would be a benefit to you. Speaking with a lender before making any large payoffs or modifying your credit in a significant manner will help you get the best rates and terms available in the current market and help you get a more accurate idea of what you can afford.

Q: What’s the difference between a mortgage broker and a traditional lender?

A: A broker may have access to several lenders and may offer you a wider selection of loan products and terms. Brokers are paid a fee in addition to the lender’s origination fees. Brokers also set their own compensation, so you’ll need to ask anyone you speak to how their fees are determined. If you decide to work with a traditional lender, be sure to ask if a broker is involved. Many financial institutions act as both lenders and brokers, so you should ask if a broker is involved on any loan you are offered.

Q: What types of loans are available for me?
A: The types of loans you qualify for depend on your circumstances, and not all home mortgages are structured the same. A fixed rate (traditional) loan, for example, are usually structured with repayment terms of 15, 20 or 30 years, so your monthly mortgage payments remain the same for the length of the term. An adjustable-rate loan (ARM), on the other hand, features an interest rate that will fluctuate over the life of the loan based on market conditions. Federal Housing Administration (FHA) loans are insured loans made by private lending institutions such as banks and mortgage companies to eligible borrowers, and Veterans Administration (VA) Guaranteed loans are available to qualified veterans and their spouses. The VA Guaranteed Loan does not require any down payment.
Q: What types of fees may I encounter?
A: It’s always beneficial to be knowledgeable about what types of fees come with purchasing a home. This will help you better financially prepare for the cost of a new home. Most loans have fees in addition to the total amount you are borrowing to finance your home, such as Loan Origination Fees, a charge for processing the loan that’s expressed as a percentage of the loan’s amount. Other fees include Broker Fees, Closing Costs, and Underwriting Fees, which certain lenders will charge to investigate your creditworthiness.
Q: Should I get pre-approved?

A: Yes. I highly recommend you work with a lender to get pre-approved. This will give you an edge when multiple offers have been made on a house. If you’re looking for a lender, we have a list of qualified lenders our past clients have used and recommend.

Q: What should I keep in mind when viewing properties?
A: Here are some tips to keep in mind when you’re viewing properties in person:

  • Don’t be put off by interior decorations – they can and will be changed.
  • Make notes or use your phone to take photos to review when finished.
  • Keep a folder with print-outs on properties you’ve visited.
  • When you find a property you like, plan on visiting it at different times of the day.
  • Don’t hesitate to ask questions.
Q: Should I get an inspection?

A: As a buyer, you have the opportunity to hire a professional inspector to evaluate the condition of the home and analyze any safety issues you may not know about. A professional inspector will check the structure and mechanical systems of the house, ensuring any major problems are caught before purchasing it. Depending on the results, you have the opportunity to get out of a written offer, renegotiate the price of the home or negotiate that repairs are made by the seller prior to finalizing the contract.

Q: Are there dog breed-specific laws in Central Ohio I should be aware of?
A: Some Ohio cities and counties have breed-specific laws, which mean that some breeds of dogs are not allowed. If you are interested in finding more information on whether the community you are looking for a home in imposes bans, I encourage you to visit http://www.dogsbite.org/legislating-dangerous-dogs-ohio.php.

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Have more questions? You can learn more about aspects of the Home Buying process through the articles below: Why Buying a Home is a Great Investment Condo or Single Family Home?