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Buyers Frequently Asked Questions
Before starting the fun of looking at homes for sale, it is helpful to get pre-approved for financing. Visit the get pre-approved page for a list of lenders I personally recommend, or choose someone with whom you have worked before and have had a good experience. After securing your pre-approval, you can start your home search in a price range that’s comfortable for you, prepared to act when you find the house you on which want to write an offer.
The Buyer has provided verbal and sometimes hard copy information regarding their income, expenses, assets and liabilities. Their credit report may also have been obtained. A Pre-Qualified buyer, at best, can provide the seller with a letter stating an opinion of what they can afford. This has no real value to a prospective seller.
The Buyer has provided written evidence of income, expenses, assets, liabilities and credit. All information has been verified. As a result, much of the paperwork for the buyer's loan has been completed. The Buyer is able to furnish a pre-approval letter (from the lender) to the seller and Listing Broker stating that they are financially capable of purchasing a property. This buyer will be able to engage in a negotiation that would be taken seriously.
How much you can afford depends on a number of things: Your income, the amount you have for a down payment, outstanding debts, credit score, the type of mortgage you select and current interest rates.
These documents will be necessary from each borrower who will be on the loan application.
- Home address(es) for the previous two years.
- Your social security number.
- Employment information for the previous two years including employer name, address and phone number.
- Paycheck stubs-last two consecutive.
- W-2 forms and personal tax returns for the last two years.
- Detail of any other income sources.
- Last two months statements (all pages) from the bank accounts from which the down payment will come.
- Investment accounts
- Asset accounts
- Retirement accounts
There are various programs available for first-time buyers. The best way to get the most current information is to contact lenders who offer government-insured loans. Other sources to look at are:
- Escrow fee. These fees are based on the price of the home and are generally divided between the buyer and seller.
- Loan origination fee. To cover the cost of the administration costs of the lender.
- Title Insurance. A policy the lender requires.
- Appraisal. Lenders require an appraisal of the property value (typically $450-$575).
- Inspection. These average around $425-$650 depending on the size of the home and the inspector. When performing a pre-inspection the inspector does not write and provide a report. Because of this, pre-inspections typically cost $250-$400.
- Pro-rated property taxes. At closing, the buyer and the seller are responsible for taxes during the time of their ownership. After closing, the Buyer’s taxes are typically included in the loan payment.
- Home owners' dues. This applies to condominium and co-op purchases only.
- Wire transfer and courier fees.
- County recording fee.