While you may find an answer to your question here, remember, we are always willing to answer any questions you may have about Real Estate.
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How much money do I need to buy a home?
While typically, FHA is 3% down plus closing costs, Conventional is as little as 5% down plus closing costs and VA is 0% down plus closing costs. You might be surprised to find out there are Down Payment Assistance Programs too.
Not to mention, we can often negotiate with a seller to pay some or all of your costs.
What’s the fist step if I want to buy a home?
The very first thing you want to do is speak with a lender, preferably a Direct Lender. This will let you figure out exactly how much house you can afford and address any issues on your credit you may or may not know about. Plus, in our current market, no seller would consider your offer if it’s not accompanied with a recent Letter Of Approval.
What if we make an offer and something comes up during inspections or my loan isn’t approved? Will I lose my deposit?
If you’re working with a knowledgeable Realtor, you are protected if procedures are followed. There are three Contingency Periods in place to protect the buyer.
– Inspection Contingency
– Appraisal Contingency
– Loan Contingency
Inspection Contingency – Typically a 17 day period, can be extended if the seller agrees and the situation warrants it. This time is for you to get any inspections on the property you feel you need to have, for example, Home, Pest, Roof, Pool, Septic, Well etc… Once you are satisfied, you remove the Contingency. If any issues were found, we can try to negotiate with the seller or cancel and move on, you would get your deposit back.
Appraisal Contingency – Typically a 17 day period, can be extended if the seller agrees and the situation warrants it. This time is for you to have your lender order an appraisal and receive the results. If the home appraises at or above value, great! We move forward. If not, then we need to decide if you want to cancel or try and see if the seller will sell at the appraised value, usually they won’t. In this case we need to see if the seller would consider splitting the difference or if you’re willing to bring in cash to cover the shortage. Once the home appraises below value, you are not obligated to continue, you can cancel and move on, you would get your deposit back.
Loan Contingency – Typically a 21 day period, it can be extended if the seller agrees and the situation warrants it. This time is for the lender, Escrow/Title and the underwriter to process your mortgage and give you the final loan approval. This is usually the last contingency released. You never release this one until the lender has given the final approval. Should an issue cause your loan to fail, you can cancel and move on, you would get your deposit back.
These contingencies are to protect you, you must actively remove them, they don’t just expire. They will protect your deposit, but if you were to back out after removing them or for a reason not protected, you can be subject to Liquidated Damages at up to 3% of the offer amount or more. In most cases, it would be the loss of your deposit. We never want to put you in that situation. This is why you want a knowledgeable Realtor that really has your best interests as a priority, not one just looking for their next check.