FAQ

A down payment for a house is a portion of the total cost of the property that a buyer pays upfront when purchasing a home. It’s typically expressed as a percentage of the home’s purchase price.

For example, if a house costs $300,000 and the lender requires a 20% down payment, the buyer would need to pay $60,000 upfront as the down payment. The remaining amount is financed through a mortgage.

The percentage required for a down payment can vary based on factors like the type of mortgage, the lender’s requirements, and the buyer’s financial situation. A larger down payment often leads to more favorable loan terms, such as lower interest rates or avoiding private mortgage insurance (PMI) in some cases.

Listen to your real estate agent’s advice, but follow your own instincts on deciding a fair price. Calculating your offer should involve several factors: what homes sell for in the area, the home’s condition, how long it’s been on the market, financing terms, and the seller’s situation. By the time you’re ready to make an offer, you should have a good idea of what the home is worth and what you can afford. And, be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.

We can assist you in making an offer, which will include the following information:

• Complete legal description of the property
• Down payment and financing details
• Deposit amount
• Proposed move-in date
• Price you are offering
• What conditions do you want in the offer? (Financing, Home Inspection, Insurance Inspection, Septic Inspection etc.)
• Proposed closing date
• Length of time the offer is valid
• Details of the deal

Remember that a sale commitment depends on negotiating a satisfactory contract with the seller, not just making an offer.

It’s not required, but it’s a good idea. Following the inspection, the home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you’d like to purchase and it is a good time to ask general, maintenance questions.

An inspector checks the safety of your potential new home. Home Inspectors focus especially on the structure, construction, and mechanical systems of the house and will make you aware of only repairs that are needed.
The Inspector does not evaluate whether or not you’re getting good value for your money. Generally, an inspector checks (and gives prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and Ventilation, the HVAC system, water source and quality, the potential presence of pests, the foundation, doors, windows, ceilings, walls, floors, and roof. Be sure to hire a home inspector that is qualified and experienced.

You may want to include an inspection clause in the offer when negotiating for a home. An inspection clause gives you an “out” on buying the house if serious problems are found or gives you the ability to renegotiate the purchase price if repairs are needed. An inspection clause can also specify that the seller must fix the problem(s) before you purchase the house.

There isn’t a set number of houses you should see before you decide. Visit as many as it takes to find the one you want. On average, home buyers see 5-10 homes before choosing one. Just be sure to communicate often with us about everything you’re looking for. It will help avoid wasting your time.

In addition to comparing the home to your minimum requirement and wish lists, you may want to consider the following:

• Is there enough room for both the present and the future?
• Are there enough bedrooms and bathrooms?
• Is the home structurally sound?
• Do the mechanical systems and appliances work?
• Is the yard big enough?
• Do you like the floor plan?
• Will your furniture fit in the space? Is there enough storage space?
• Imagine the home in good weather and bad – will you be happy with it year round?

Take your time and think carefully about each house you see. Ask your real estate agent to point out the pros and cons of each home from a professional standpoint.

The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

The two don’t really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing.

Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that’s an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.

You can find out by asking yourself some questions:

• Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable?
• Do I have a good record of paying my bills?
• Do I have money saved for a down payment?
• Do I have few outstanding debts, like car payments?
• Do I have the ability to pay a mortgage every month, plus additional costs?

If you can answer “yes” to these questions, you are probably ready to buy your own home.