FREQUENTLY ASKED QUESTIONS FOR BUYERS

I WANT TO BUY A HOME - WHAT'S MY FIRST STEP?

We suggest contacting your lender of choice to get pre-qualified or pre-approved for a loan. Anywhere you currently have a bank account is a great start. Your lender will be able to help you determine your price range. After you’ve received your pre-qualification letter from your lender one of our Real Estate agents would love to help you through the rest of the process.

SHOULD I BUY OR CONTINUE TO RENT?

One of the most important things to consider is how long you plan to live in a home.  If the answer is only a few years, it’s likely the better decision is to continue renting.  Another question to ask yourself is whether you are ready to take on the additional “responsibilities” of owning a home.  When owning a home there will be general home maintenance that will require extra work and money.

DO I NEED A GOOD CREDIT SCORE TO PURCHASE A HOUSE?

A FICO credit score above 650 will help you to qualify for most loan programs, though some programs, such as FHA, allow lower scores depending on other mitigating factors. Do remember, however, that even if a client does qualify, a low credit score will mean you may pay a higher interest rate.

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​Keep in mind that a credit score is just one criterion that a lender uses in evaluating a loan. For instance, a person with a low credit score who applies for a 15-year loan with a 25% down payment may qualify for a better interest rate than another individual who has a high credit score who is applying for an adjustable-rate loan.

WHAT FACTORS GO INTO A CREDIT SCORE?

Lenders may use their own credit scoring model, different scoring models for different types of credit, or a generic model developed by a credit scoring company, but all scoring models generally contain the following categories and respective percentages of impact:

• Payment history—35%

• Amount owed—30%

• Length of credit history—15%

• New credit—10%

• Types of credit used—10%

WHAT IF I DON'T HAVE ANY CREDIT?

Generally, a credit report must contain at least one account that has been open for at least six months or more to generate a credit score. 
It is suggested to start working on your credit no less than 6mo - 12mo before wanting to purchase a home. 

DO I NEED 20% DOWN?

There are several 0 (zero) down and closing cost assistance programs in our area. Contact your lender of choice to see if you may qualify for one of these programs.

WHEN IS THE BEST TIME TO BUY?

ALWAYS! People's lives are always changing so there are always people who need to sell and buy at all times of the year.

WHAT ARE THE TAX ADVANTAGES OF OWNING A HOME?

The Interest you pay on your mortgage and your property taxes are deductible. You may also be rewarded for making energy efficient upgrades to your home. 

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WHO PAYS THE REALTORS FEES?

Generally, the seller pays the Realtors fee. In most cases, it doesn't cost a buyer anything at all to have a Realtors help and guidance when purchasing a home.

MORE QUESTIONS?

Always feel free to contact one of our Real Estate agents to get any and all of your home buying questions answered! No questions is too big or too small.

1. Pay bills on time

Approximately 35% of a credit score is based on this category.
Payment history is typically a significant factor. It is likely that your clients' scores will be affected negatively if they have paid bills late, have had accounts referred to collections, or have declared bankruptcy and if that history is reflected on their credit reports.

2. Limit outstanding debt

Approximately 30% of a credit score is based on this category.
Most scoring models evaluate the amount of debt your clients have compared to their credit limits. If a client owes an amount close to her credit limit, it will have a negative impact on her score. 

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3. Preserve length of credit history

Approximately 15% of a credit score is based on this category.
Most credit scoring models consider both the age of a person's oldest account and the average age of all of their accounts. New accounts lower a person's average account age and can have a negative effect on her score.

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4. Avoid recent credit applications

Approximately 10% of a credit score is based on this category.
If a person has applied for too many new accounts, it may negatively affect her score. Generally, credit scoring models count multiple inquiries in any one period as just one inquiry. Similarly, some models ignore inquiries made in the 30 days before arriving at the score if the inquiries come from mortgage or auto loan lenders.

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5. Manage the number and types of credit accounts

Approximately 10% of a credit score is based on this category.
Generally, a mix of credit cards, retail accounts, installment loans, and mortgage loans results in a better score, but it is not essential to have one of each type.

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You may obtain 1 free credit report each year at: annualcreditreport.com
 (This is the only source for free credit reports authoized by Federal law)