Frequently Asked Questions – FAQ
Should I Buy Or Rent?
Answer: Real estate is an investment. When you rent, you write your monthly check to your landlord and that money is gone forever. But if you own you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot of money on taxes each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may appreciate over the years and give you equity. And you’ll have the satisfaction of enjoying something that’s all yours! A home where you are free to express your individual style.
Can I Become A Homebuyer Even If I Have I’ve Had Bad Credit, And Don’t Have Much For A Down-Payment?
Answer: YES! You may be a good candidate for one of the federal mortgage programs. Your Franzese Group Professional can help guide you through this complicated process.
Should I Use A Real Estate Broker? How Do I Find One?
Answer: Using a real estate broker is an excellent idea. Many of the details involved in buying real estate, especially the financial ones, can be overwhelming at times. A Franzese Group Professional can help guide you through the entire process and make the experience much more pleasant and enjoyable. And they will be well-acquainted with all the important things you’ll want to know about a neighborhood you may be considering like: the quality of schools, the number of children in the area, the safety of the neighborhood, distance to subway stops, local restaurants and more. And buyers don’t have to pay the broker anything! Their fees are covered by the real estate seller.
How Much Money Will I Have To Come Up With To Buy A Home?
Answer: That depends on many things, including the cost of the house, your credit rating and the type of mortgage you get. In general, you need to come up with enough money to cover three costs:
- Earnest Money – the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house.
- Down Payment – a percentage of the cost of the home that you must pay when you go to settlement.
- Closing Costs -the costs associated with processing the paperwork to buy a house.
When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you.
How Does The Lender Decide The Maximum Loan Amount I Can Afford?
Answer: The lender considers your debt-to-income ratio, which is a comparison of your 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. According to the FHA, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, 4 should total no more than 41% of income. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.
How Do I Find A Lender?
Answer: You can finance a home with a loan from a bank, a savings and loan, a credit union, a private mortgage company, or various state government lenders. Your Franzese group Professional can guide you through your options so you can choose the one that fits you best.
What Does My Mortgage Cover?
Answer: Almost all mortgage loans have 4 parts:
- Principal: the repayment of the amount you actually borrowed
- Interest: payment to the lender for the money you’ve borrowed
- Homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders
- Property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year.
When I Find The Home I Want, How Much Should I Offer?
Answer: Again, your Franzese Group Professional can help you! But there are several things you should consider:
- Is the asking price in line with prices of similar homes in the area?
- Is the home in satisfactory condition or will you have to spend a lot of money making it the way you want it?
- How long has the home been on the market? If it’s been for sale for a while, the seller may be more eager to accept a lower offer.
- How much mortgage will be required?
- How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted. In some cases, you may even want to offer more than the asking price, if you know you are competing with others for the house.
Do I Really Need Homeowner’s Insurance?
Answer: Yes. A homeowner’s insurance policy is required at closing, so arrangements will have to be made prior to that day. Besides, involving an insurance agent early in the process can help save you money. Most insurance agents are a great resource for information on home safety and they can give tips on how to keep insurance premiums low. Your Franzese Group Professional can assist you in this area.
Are There Special Mortgages For First-Time Home Buyers?
Answer: Yes. Your lender should now offer several affordable mortgage options which can help first-time homebuyers overcome obstacles that made purchasing a home difficult in the past. Lenders may now be able to help borrowers who don’t have a lot of money saved for the down payment and closing costs, have no or a poor credit history, have quite a bit of long-term debt, or have experienced income irregularities. Ask your Franzese Group Professional to assist you in this process.
What Is A Final Walk-Through?
Answer: The final walk-through happens on the day of closing or possibly a few days before. It is your final opportunity to ensure your home is in the condition you agreed upon when you made the offer to purchase it. It is not an appraisal. This is not the time to begin new negotiations unless a serious new problem has come up after all of your appraisals and home inspections. It is simply a walk through to make sure any problems previously addressed have been resolved and that the home is ready for you to move in.