Jump to "Selling a Home" FAQ
Buying a HomeAll things considered, it's better to buy. When you rent, you can't protect yourself against rent increases, build equity, or take advantage of tax benefits.
AM I READY TO BUY A HOME?
Ask yourself these questions:
- Do I have a steady income?
- Do I have a good record of paying bills?
- Do I have outstanding debts?
WHAT SHOULD I ASK WHEN LOOKING AT HOMES?
Check on maintenance issues and potential problems. Does anything need to be replaced? What requires ongoing maintenance (e.g., roof, deck, appliances, flooring)? Also, ask about the house as well as the school system.
WHAT CAN I AFFORD?
The lender takes into consideration your debt-to-income ratio, a comparison of your gross (pre-tax) income to housing and non-housing expenses. According to the FHA, monthly mortgage payments should not exceed 29% of gross income, while the mortgage payment, combined with non-housing expenses, should not be more than 41% of income. The lender also considers cash available for down payment, your credit history, and closing costs when determining your maximum loan amount.
WHAT IS A MORTGAGE?
A mortgage is a loan obtained to buy real estate. It's a lien (a legal claim) on the home or property that secures the promise to pay the debt.
WHAT TYPE OF LOAN SHOULD I GET?
Mortgages include 15-year and 30-year fixed rate mortgages as well as balloon mortgages. Your lender can explain the advantages and disadvantages of both.
IS THERE HELP FOR FIRST-TIME HOMEBUYERS?
Yes. Lenders can help borrowers who don't have a big down payment, do not have a credit history, have a poor credit history, have substantial long-term debt, or have irregular income.
DO I NEED A LARGE DOWN PAYMENT?
It's possible to buy a home with no down payment. A mortgage with a 5% to 20% down payment, however, generally requires a mortgage insurance policy to secure the loan.
HOW DO I GET A MORTGAGE LOAN?
The first step in securing a loan is to complete a loan application. To do so, you'll need the following information:
- Pay stubs for the past 2-3 months
- W-2 forms for the past 2 years
- Information on long-term debts
- Recent bank statements
- Tax returns for the past 2 years
- Proof of any other income
- Address and description of property you wish to buy
- Sales contract
During the application process, the lender will order a report on your credit history and a professional appraisal of the property you want to purchase. The application process generally takes up to six weeks.
Selling a HomeDO I NEED A REALTOR OR CAN I SELL MY HOUSE ON MY OWN?
Many people think they can save money by selling their house on their own, but working with a real estate broker gives you access to an enormous amount of information. Real estate professionals know about market trends, houses in your neighborhood, and the people most likely to buy in such neighborhoods. Not only can they reach the largest number of people who may be interested in your house, but they are trained to screen potential buyers and to negotiate with them. Finally, they are available on weekends and answer the phone 24 hours/day. HOW LONG WILL IT TAKE TO SELL MY HOUSE?
Depending on the marketing in a particular area, the average listing times vary from 30 to 180 days. Price, terms, condition, location, accessibility and exposure play a role as well.
HOW DO I DETERMINE THE RIGHT ASKING PRICE?
Real estate professionals suggest asking prices based on information you may not have at your disposal, including recent listing and selling prices of houses in your neighborhood.
SHOULD I FIX UP MY HOUSE UP BEFORE IT GOES ON THE MARKET?
You'll probably want to do some work to get your house ready to market. If you're in a hurry to sell, little things can make your home look better.
HOW DO I CREATE CURB APPEAL?
When prospective buyers like your house from the street, your house has curb appeal. New paint, a freshly trimmed lawn, beautiful shrubbery, and vibrant flowers on the porchall of these create curb appeal.
When a family looks at a house, they're picturing it as their home. Thus, it's important to have neutral colors and to keep clutter and personal knick-knacks, photos, etc. to a minimum.Jump to "Buying a Home" FAQ
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