Things To Do When Buying a Home
When you are ready to purchase a new home, it's important to know what to expect throughout the loan process. With the right knowledge, the road to home ownership is just ahead.
1. Plan Ahead. Its a good idea to have at least $1,500 to $3,000 saved and available when you go into contract. You will need at least $500 for earnest money (depending on sales price) and approximately $550 for appraisal. Termite inspections may be required by your lender and are around $100. Home Inspections are around $400.
2. Save Your Money. Curb your spending habits while you are searching for a home and while you are under contract. Save as much as you can. Lenders like to see savings in your accounts.
3. Complete A Mortgage Application and/or Meet With Your Lender. Complete a mortgage application and submit it for approval. Depending on the lender, it may take anywhere from several hours to several days before learning whether or not you are approved. In most cases, however, a lender can provide you with an answer within 24-48 hours. Provide copies of your documentation to your lender at this time as this will make your pre-approval letter even stronger.
4. Choose A Home. After you have a pre-approval letter, the next step is selecting a home. I will create a personalized search website customized to you criteria so you can receive new listings and updates as soon as a property hits the market.
As you are searching for your new home, please remember that I will help you set appointments and gather pertinent information on the properties you select, no matter how you find them or who they are currently listed with. If you will keep me updated on the properties that are of interest to you, I will be happy to do the homework for you.
5. Ask Questions. I’m here to help you. Never be afraid to ask questions before you do anything.
When Do I Pay for What?
During the first few weeks of a contract, there are certain costs that will occur:
- Earnest Money deposit: At the time you write an offer, you will need to write a check for the earnest money deposit. Usually $500-$1,000. This is your deposit on the property and is applied toward your purchase price or down-payment at closing. Your earnest money will be deposited in the trust account of the listing real estate company or a title company shortly after the contract is accepted and all signatures obtained.
- Inspections: You should plan to pay for inspections at the time they are performed (usually within 10 days after the contract is signed). A termite inspection may be required by your lender and is usually around $75-125. Home inspections are not required, but are strongly encouraged - usually around $350 to $550 - depending on the inspections you choose. There may also be some additional inspections required by your lender. Prices for inspections will depend on the size of the home you are purchasing. Larger homes may cost more to inspect.
- Appraisal: Estimated appraisal fees are usually collected by your lender not long after the contract is signed and submitted to the lender. Appraisal prices can vary depending on location of the property and type of appraisal such as VA or FHA, etc. Your lender will let you know how much the appraisal estimate is.
- Survey: Should you decide to obtain a pin-stake survey, the invoice will be due and payable either at time of survey completion or at closing. This cost depends on the size of the property and other factors.
A good estimate for the earnest money deposit, appraisal fee, and inspections is around $1,500 to $3,000 (depending on the earnest money deposit amount).
Other costs that may occur at the time of Closing are:
- Down-payment: Depending on the type of loan you have, you may be required to provide a down payment. This is due at closing.
- Utility Deposits: Just prior to closing, you will need to contact the utility companies that service your new home. You may be required to pay a deposit if you are not already a current customer.
If you don't have money to cover some of these costs,
sometimes lenders will have bonus money programs available
(ask your lender if you qualify).
