No matter where you are in the home buying process — from “I’m just thinking about it” to “I’m ready NOW!” — we’re here to help answer your most frequently asked questions about the home buying process.
Q: Should I buy or rent?
A: If you are moving to a new city, I think it’s smart to rent for at least six months to get a feel for the area. If you end up loving where you live and plan to stay, then it may be time to settle down and buy a home.
When you rent, your monthly expense is pretty much the same every month. However, you are giving money to someone else when you could be putting that monthly lease payment towards equity in your own home and getting a tax deduction.
When you buy a home, your monthly expense is also somewhat the same, but it’s important to remember that you can’t call the property manager when something breaks. What you can’t put a price on, of course, is the great feeling that comes with owning your very own home! – Melissa Christiansen
Q: What’s your best advice for first time home buyers?
A: Assemble a great team! A home purchase requires a team of people that will guide you in making one of the most important decisions in your life. Players on your team will include a mortgage professional, real estate agent, closing attorney, home inspector and more!
Everyone’s role is important and can help make the home buying experience a smooth process. I love working with new home buyers and can recommend some great players to bring it all together! – Susan Wright
Q: How do I know what size home I can afford?
A: First, make a list of your expenses and debt to help determine what monthly mortgage amount you are comfortable paying. Then gather important documents (tax returns, financial statements, salary pay stubs, etc.) and find a reputable local mortgage lender who will listen to your needs.
A lender will help you determine how much you can afford and give you guidance. A good rule of thumb is your maximum mortgage payment should not exceed 28% of your gross monthly income! – Rhonda Gibbons
Q: How much money do I need for a downpayment?
A: That depends on two things – the price of the home and the type of loan you’ve been approved for. You can put 0% down on a NCHFA (North Carolina Finance Housing Agency) loan or as little as 3% of purchase price down with a FHA loan, but the condition of the property must be in tip-top shape (no peeling paint!).
3.5% or 5% of the purchase price will change the type of loan to a conventional home loan which doesn’t have as many restrictions as FHA. Home buyers who pay less than 20% typically must pay for PMI (private mortgage insurance). To avoid PMI, put down at least 20%. – Eileen Nelis
Q: Do I need a real estate agent?
A: Yes! Partnering with a local real estate agent during your home search and purchase process ensures you have someone in your corner who can save you time AND money.
Making an offer and finalizing a purchase contract is just the first step in what can be an emotional process. Your agent is there to walk you through the entire process. – Stephanie Therrell
Q: Who pays the commission fees and how much do I owe you?
A: Your buyer agent’s commission – in almost all cases – is paid by the seller! Which is why it’s especially important for first-time buyers to have an experienced real estate agent guide them through finding a home, negotiating an offer, inspections and repairs. – Mike Gibbons
Q: How long does it take to buy a home?
A: The actual process of buying a home doesn’t take long. Once financing has been secured, a house has been found and a price agreed upon, the actual process only takes about a month. However, that time frame can be misleading because it can take several months to get to that point.
The first task is to determine a budget and discuss financing with an expert. In today’s market in Charlotte, to make an offer on a home without approval for a loan is a waste of time. A real estate agent can help you narrow down a wish list of home amenities and neighborhoods. When you’ve found the perfect home the negotiating begins. Once all these steps are completed, it could take about another month to close. – Beverly Fasth