Homebuyer Frequently Asked Questions
As a new homebuyer you may have a lot of questions about real estate.
It is always advisable to do your research before you invest a large amount money that may be needed to buy a house.
Below may help to answer some of the most common homebuyer questions:
1. Is buying better than renting?
Investing a lot of money often makes people hesitant. Some may be tempted to just rent a house instead of buying. While you are renting a property, you only need to pay at regular intervals in exchange for the property. After the rental period, you move out and that’s how it usually works. However, buying gives you the right to the house for your lifetime, so you invest your money once (or over a period of time) and enjoy the benefits over time. Of course, you will have to consider how long you want to stay in the house and if you can actually afford to buy the house at all.
2. Should I consult the bank before buying?
Of course, you should. That is probably what you should do right after the thought of buying a house enters your mind. First of all, you have to have a clear idea about what you can afford. You would otherwise be looking at houses outside your price range. Also, banks will show you the programs available for new buyers that you can use.
3. Should I work with a real estate agent?
The process of purchasing a house becomes a lot easier if you have a realtor. Of course, not all realtors are same and the good comes with the bad like everything else. In general, your agent will be very useful for providing you practical advice, guiding you through the procedures, and step in wherever a professional touch is needed. Also, remember that everything regarding your house should go through your realtor. Do not ignore to inform them anything just because you don’t want to bother them.
4. If I own a house, should I sell it before buying a new one?
This one does not have a correct answer, it depends on your situation. There are pros and cons to both buying the new house before and after selling the old one. If you do not have any place to stay, you should probably buy the new one before selling the old one. In some situations, the finance from the sold house can help you buy the new one. Also, selling your old house is not very time specific: you can never tell when it will sell.
5. What are “HUD Homes”?
HUD homes are pretty good deals. If a HUD insured buyer is unable to clear the payment and the lender is about to close on the house, HUD pays the lender’s money and after ownership then sells it at market price as quickly as possible.
6. What is the procedure for applying for a mortgage?
First, you have to calculate your deposit and your borrowing capacity. The bank can help with that and if you already know the figures, there are online calculators that can help you. Then you have to choose the most suitable mortgage that is most beneficial for you. Apply for a loan once you have a mortgage rate locked and then all you need to wait for is the formal approval and the final settlements.
7. What is a Pre-approval?
This merely indicates your borrowing ability. It can be applied for at any time, to ensure that you have a good understanding of your ability to borrow, but it does not give you any guarantees to fund you.
8. What is the length of a mortgage?
The period of mortgage can vary from anything up to 30 years. The longer the timeframe, the lower the loan repayments.
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