Frequently Asked Questions
How do I find a real estate agent to work with?
Asking family, friends or co-workers can be a great place to start. If someone you know was happy with the service they received from their agent, chances are you will be too. It can be a good idea to interview a few different people, having a good fit is important. Understand how the agent you are consdering working with services their clients and what their background/experiece are.
Open houses are a low commitment way to tour properties and often where buyers begin their home search. Most of the time they are hosted by the seller's agent or another agent affiliated with the seller. You maybe asked to sign in and it is definitely ok to attend without your agent but if your agent is available they may want to attend with you.
Do I need a pre-approval before looking at homes?
The short answer is maybe. It is standard practice for some agents to require a pre-approval before they will show you homes and some sellers require it to be provided before viewing their house. It is a good idea to explore your lending options early to know how much house you can afford, have time to learn about different lending options, focus on seeing the right properties and avoid missing out on your dream home as a result of not being ready.
What is the difference between a bank, a mortgage broker or an online lending company? How do I choose a lender?
Banks are limited to the loan products offered by their institutions and they typically are available limited hours (aka bankers hours). Mortgage brokers act as an intermediary between banks and borrowers. They 'shop' various banks to find the best loan fit, are often avaialbe at off hours and are usually compensated through the terms of the loan, not the borrower. Online lenders can be about convience over quality since they are so easily accessible. It can be a good idea to explore all three
How do I know how much to offer on a home?
A strong offer is comprised of more than just the offer amount. All terms of the offer should be considered, not just the amount. Compartive home sales, days on market, other buyer's interest in the property and the seller's motivation/needs all play a role in crafting a great offer.
What happens at the home inspection? What if something is found?
A general home inspector is going to review the systems of the house - foundation, roof, plumbing, electric and more. A good inspector will take a lot of pictures and provide you with a comprehensive report on the home. If something undesirable is found your options are to address the items post closing as the new owner, negotiate repairs or price credits with the seller or walk away from the sale. Which of these options will apply is largely dependent on the specific circumstances surronding your purchase.
How long does the homebuying process usually take?
If you are purchasing with a mortgage the average time to closing is approximately 60 days. This is after you have found your new home, negotiated an offer, performed inspecitons and executed contracts. In New York, the contract closing date is 'on or about', allowing 30 days flexiblity for both parties to meet their obligations. In Connecticut the closing date is 'on or before' the contract closing date.
What’s included in my monthly mortgage payment?
For most homeowners your monthly payment is comprised of loan principle, interest on the loan, taxes, homeowners insurance and PMI (if applicable). The taxes and insurance are paid into an escrow account held by your lender and used to pay those bills when they are due. PMI is mortgage insurance that lenders charge buyers who put less than 20% down on their home.
How much do I need for a down payment on a home?
The amount you need for a down payment depends on the type of loan and your financial situation. While 20% is a common benchmark, many buyers are surprised to learn that much less is actually required — some conventional loans allow as little as 3% and FHA loans require just 3.5%. There are VA and USDA options can allow for no money down.
What are closing costs, and how much should I expect to pay?
Closing costs are the fees paid at closing including lender fees, third party fees (title, appraiser, ect), prepaid escrow, recording fees and tax prorations. These costs are typically 3%-5% of the loan amount. Total costs can vary from lender to lender.
