Purchasing real estate can be overwhelming for many people, especially if you’re a first time homebuyer. But, don’t let your fears about real estate stop you from buying a home. A home is one of the best investments you can make, for many reasons. Here are 22 things everyone needs to know.
Real estate has been shown to be a good investment, historically. In recent years, many people have lost a lot of money in the real estate market. But, over time, real estate has been shown to be profitable.
You need a realtor. A good realtor can help you save money and keep you out of potential legal issues, too. A realtor is well worth their fee, and will usually save you at least the amount of their fee.
There are lots of different kinds of loans. Shopping around for your mortgage loan is important. Some loans can require 20% down, for example, while others require as little as 3%. Shopping around can help you get the best deal and help you find the right loan for your particular situation.
Know how much you can afford. There are plenty of online calculators that can help you determine how much of a mortgage you’ll qualify for.
Understand how your payment works. You may use an online calculator to tell how much your mortgage payment will be. These calculators tell you what you’ll spend each month for the principal and interest of your mortgage payment only. In most cases, your payment will also include mortgage insurance, homeowners insurance and property taxes, too.
Understand escrow: Most of the time, your payment includes money that goes into escrow, for later payment of bills like homeowners insurance, property taxes and mortgage insurance. It’s critical that you know what bills are being paid by escrow and what bills you’re responsible for.
Your mortgage insurance won’t stop on its own. You are typically required to pay mortgage insurance until you have 20% equity in your home. But, your mortgage company is not going to stop charging you for mortgage insurance automatically when you reach that 20% equity mark. You will need to ask them when you’ve reached the right point.
The asking price on a home is negotiable. When you make an offer, you can make one well below the asking price if you choose. In a good housing market, the seller will not be as willing to negotiate on the price as in a down market.
You should always have a home inspection. You have the right to have a home inspected after you’ve negotiated an offer with the seller. You should definitely had the home inspection done, and have your contract reflect that you can request repairs or back out of the deal based on the inspection results.
You should consider a home warranty. If you’re purchasing a home including appliances like a refrigerator, furnace, etc., a home warranty might be a good idea. It offers you protection if one of these major functions of the home needs repairs. Often times, the seller will pay for it, too.
You should get a copy of your credit report before you buy a home. This way you can spot and correct any problems on your report before a lender reviews it.
You should make a list of what you want in a home before you begin shopping. Consider listing “must haves” and “wants”. This will help you narrow down your search.
Foreclosures can be a great deal. But in a down economy, there will often be offers on the table already for the best deals. It’s usually a good idea to look at foreclosures along with homes that are not in foreclosure.
Some mortgages offer fixed interest rates for the term of the loan. Others offer variable rates.
You should get a good faith estimate well before closing. Your lender should give you an estimate of the amount required for closing and the amount of each payment ahead of time.
Your loan will have an application fee. This fee is usually paid ahead of closing.
Sellers pay the realtor fee. When you’re a buyer, you don’t pay a fee to the realtor.
Shopping online makes the process easier. Most real estate agencies have websites where you can review pictures and information on homes for sale before you look at them in person.
In many cases, first time homebuyers can use some “gifted” money toward a down payment.
There are a few 0 down payment mortgages, but fewer than in a good economy.
The seller’s agent must work for the best interest of the seller. That’s why you need your own agent as the buyer.
Your home has the greatest chance of selling during the first 10 days on the market, especially when there are a lot of homes for sale.
Always ahead of the highly competitive RGV real estate market, Marilyn Cortez is a Spanish speaking native of the Rio Grande Valley. Born and raised in Mission, Marilyn is committed to her clients, and is recognized as a Top Agent in the Greater McAllen Real Estate area, and within Keller Williams Realty. Since the start of her Real Estate career in 2007, she has sold over 40 million dollars of real estate. Known by her fellow real estate agents to be hardworking, honest, dedicated and motivated, Marilyn is knowledgeable in all areas of Real Estate and has built her business on results, with more than 70% of her clients being repeat clients.