Common Buyer’s Questions

Frequently Asked and Common Buyer’s Questions Are Listed Below

Why should I buy, instead of rent?

A home is an investment. When you rent, you write your monthly check and that money is gone forever. But when 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 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 go up over the years. Finally, you’ll enjoy having something that’s all yours – a home where your own personal style will tell the world who you are.  A home that you can design and improve as you would like.

How much money will I have to come up with to buy a home?

Well, that depends on a number of factors, including the cost of the house 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; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house. The FHA offers low down payment loans that are very popular these days.

How do I know if I can get a loan?

Typically you can get pre-approved by a bank for an exact amount. However, the mortgage calculator on this website can help as well. Once you determine a payment amount that you would be comfortable with, depending on down payment amount available and additional cash/stock reserves your Realtor can help identify what price range you should be targeting.

How do I find a lender? 

Many people will choose to use mortgage brokers versus banks because the mortgage broker has access to many lenders and essentially makes them compete against each other to earn your business. However directly going to a bank sometimes can get you a better deal because there may be less costs involved. Shopping for a loan is extremely important because even a small percentage like 0.25% over 30 years can add up.  We have professionals we have worked with that we can refer you to.

In addition to the mortgage payment, what other costs do I need to consider?

Well, of course you’ll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your Realtor will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner association or condo association dues as well as property insurance. You’ll definitely have property taxes, and you also may have city or county taxes. Taxes are usually rolled into your mortgage payment. Again, your broker will be able to help you anticipate these costs.

What do I need to take with me when I apply for a mortgage? 

If you have everything with you when you visit your lender, you’ll save a good deal of time. You should have: 1) social security numbers for both you and your spouse, if both of you are applying for the loan; 2) copies of your checking and savings account statements for the past 6 months; 3) evidence of any other assets like bonds or stocks; 4) a recent paycheck stub detailing your earnings; 5) a list of all credit card accounts and the approximate monthly amounts owed on each; 6) a list of account numbers and balances due on outstanding loans, such as car loans; 7) copies of your last 2 years’ income tax statements; and 8) the name and address of someone who can verify your employment. Depending on your lender, you may be asked for other information.

What if my purchase offer on a property is rejected? 

Now you begin negotiating. Your Realtor will help you. You may have to offer more money, but you may ask the seller to cover some or all of your closing costs or to make repairs that wouldn’t normally be expected. Often, negotiations on a price go back and forth several times before a deal is made. Just remember – don’t get so caught up in the excitement of negotiations that you lose sight of what you really want and can afford!

How does the lender decide the maximum loan amount that I can afford? 

The lender considers your debt-to-income ratio, which is a comparison of your gross (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 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 can I determine my housing needs before I begin the search?

Your home should fit way you live, with spaces and features that appeal to the whole family. Before you begin looking at homes, make a list of your priorities – things like location and size. Should the house be close to certain schools? Your job? To public transportation? How large should the house be? What type of lot do you prefer? What kinds of amenities are you looking for? Establish a set of minimum requirements and a “wish list”. Minimum requirements are things that a house must have for you to consider it, while a “wish list” covers things that you’d like to have but aren’t essential.  See the page on our website about creating your home wish list.

What should I look for when deciding on a community?

Select a community that will allow you to best live your daily life. Many people choose communities based on schools. Do you want access to shopping and public transportation? Is access to local facilities like libraries and museums important to you? Or do you prefer the peace and quiet of a rural community? When you find places that you like, talk to people that live there. They know the most about the area and will be your future neighbors. More than anything, you want a neighborhood where you feel comfortable.

 

Common buyer’s questions that should be asked before the purchase.

Home Condition Questions to Get Answered.

1. How long has the home been on the market?

2. How old is the roof? – Roofs have life expectancy of anywhere from 15 to 50 years depending on materials.

3. What is the type of foundation?

4. How insulated is the home? What type of insulation in the walls and attic? – This can significantly reduce heating and cooling costs.

5. Have the appliances or systems been replaced? When?

6. Can you see yourself living in the floorplan?

Location Questions to Get Answered.

1. What types of other properties are located near the one I am considering?

2. What are the neighborhood demographics? – Talk to the neighbors.

3. Where are the schools?

4. Are there nuisance factors? For example, traffic from nearby shopping centers, freeways, is the property close to a police or fire station, etc.

 
We are experienced Sacramento Real Estate Attorneys and Sacramento Realtors. We are a unique and powerful combination and can help you buy Sacramento Real Estate homes or sell Sacramento Real Estate homes with proven results, legal advice and the strategy needed to give you the results you want. Contact us today by clicking HERE or by calling 916-378-5760. We look forward to helping you with all of your Sacramento real estate needs.