10 Most Common Home Buyer Questions

Buying a new home is exciting and confusing. There are a lot of steps to buying a home, and people have questions. These are the most common questions home buyers have, and the answers.

1. How do I get started? – The first step is to speak with a lender and get a pre-approval. This will tell you, and potential sellers, how much you can afford.

2. How long does it take to close on a home? – Typically, it takes about 30-45 days once contracts are signed to complete the lending, appraisal, and inspection processes.

3. What does my agent do? – A buyer’s agent will negotiate terms and manage the closing process from start to finish.

4. How much do I pay for a buyer’s agent? – Nothing. The seller’s agent gives the buyer’s agent a portion of their commission from the seller.

5. What credit score do I need to qualify? – A 620 FICO score or higher is required for most home loan programs. Talk to a lender for other options for lower scores.

6. How much money do I need for a down payment? – It varies. FHA loans start as low as 3% and most lenders offer standard programs for a 5% down payment.

7. What other fees will I need to pay? – Closing costs and loan origination fees will add another 2-4% to the costs.

8. What if I change my mind? – Your agent will work with you to build in contingencies for condition, loan terms/approval, and other protections to allow you time to evaluate the home during escrow.

9. When do I get the keys? – Unless you’ve negotiated extra time for the sellers to move, you’ll get the keys at the closing.

10. What’s the best advice for home buyers? – Trust the experts and ask lots of questions. Buying a new home is exciting. Reduce any anxiety by finding a good buyer’s agent who can help you make the best choice for your needs.

Family Opportunity Mortgages

Baby boomers have reached retirement age. This generation is healthier and more active than their predecessors and many want to age in a home of their own. Many of these potential home buyers have fixed incomes and with soaring home prices, they are unable to qualify for a new home when they are ready to downsize. This is where a Family Opportunity Mortgage can help.

A Family Opportunity Mortgage is backed by Fannie Mae and allows you to purchase a home for your elderly parents if they cannot qualify on their own, at the same favorable down payment and interest rates as a primary residence. This is a significant advantage over loan programs for second home or investment properties.

The terms of the loan program are simple. The borrower needs a 620+ FICO score, steady employment, and enough income to qualify for both their current housing and the new loan. Total debt-to-income ratios cannot exceed 45% and that must include all the new costs. Finally, the parents must demonstrate that they do not have the income to qualify for the loan on their own. It’s important to understand that bad credit is not sufficient to use this loan program, it must be a lack of income that disqualifies them. This program can also be used to help an adult child with disabilities.

As more people choose to live independently in retirement, the need for housing will continue. By taking advantage of a Family Opportunity Mortgage, qualified borrowers can purchase a home for their parents at very favorable owner-occupied rates and terms. Make sure to talk to a licensed mortgage lender to learn more.