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Part 2: Answering Your First-Time Home Buyer Questions with BuzzFeed

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Brandon Farber

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As part of our partnership with BuzzFeed, now for the second year, we are taking on the questions many first-time home buyers face. In Part 1, we covered questions the BuzzFeed Community asked about preparing for the home buying journey. Now, let’s tackle the next phase – the home buying process itself.

What is a down payment exactly? –VinaLane

A down payment is the cash money you put toward the purchase of a house.  It’s often referred to as a percent of the home purchase price. The remainder of the price of the home is typically paid by taking out a mortgage loan. For example, if you’re buying a $200,000 house and you are making a 10 percent down payment, you’ll bring $20,000 toward the purchase price to closing in cash (or more realistically a cashier’s check) and then you’ll take out a loan of $180,000 from a lender.  One point to remember, in this example, I’ve simplified real life to ignore closing costs. In real life, you’ll have costs associated with closing, including paying for various inspections and maybe even some transfer taxes. These costs will be in addition to your home purchase price.

-realtor.com

How much is an appropriate offer for a house (percent of the overall asking price)? –Katherineberry00

Writing an offer involves many moving parts, including market conditions, the strength of your pre-approval, finance options, down payment, and contract terms. Understanding the strength of your offer from a seller’s perspective as well as the buyer’s is where an agent’s expertise is front and center. There is no simple response, but with proper consideration of all the above, a real estate agent will help you weigh the best options.

Max Diez, realtor.com REAL Ambassador

There is never a magic number, sometimes terms outweigh a higher purchase price. A local real estate agent will be the best guide for navigating this consideration.

Jennifer Hisey Wauhob, realtor.com REAL Ambassador

How do you get down payment assistance? What are some of the programs states have to offer for first time home buyers where they can put little to no money down on a home? I heard of one called the NACA program that helps out but I’m curious to know if there are any others. Currently looking for our first home here in Chicago! –Katherinek49852f55b ; Joseg92

The best way is just by looking for it. You can search online. Look for county or state programs that may be geared to help first-time or low- to moderate-income home buyers. Your lender or real estate agent, who are likely local, also are likely to know about programs relevant to your area, so ask them. In addition to down-payment assistance, you might look for home buyer education programs that can give you information on down payment assistance resources and the overall home-buying process with particularly insight on any quirks or programs unique to your area.

-realtor.com

 

Are there programs to either help with down payments or with accessibility upgrades for people with disabilities? Can I/should I get an additional loan for this type of home improvement? If it helps, I am talking about wheelchair-accessible improvements like a ramp, bars in bathrooms, disability bathtub, etc. –Angels4d4906ef4

There are two national programs that can help lower-income disabled people become homeowners. Habitat for Humanity builds accessible homes. It also provides affordable mortgages to those approved for their program. Another program is Rebuilding Together AmericaCorps. This agency prides itself on building homes for families with one or more disabled members. The Department of Housing and Urban Development has housing counselors in every state who can assist individuals with special needs and they may be able to guide you to other programs that help fill any gaps. Check out the state-by-state listing of HUD-approved counselors. 

Dara Delgado (NMLS #1510172)

 

How do you shop around for the best mortgage rates and how do you choose a lender? Does this process count as a hard inquiry on your credit report? Jvalle2

The best way to shop around is to call several lenders on the same day, and give them the details of the loan you’re pursuing. Provide details such as the estimated purchase price, down payment amount and your credit score. With this information, the loan officer can tell you what the interest rate would be and what the loan fees would be. Every rate comes with either a cost or a credit for the interest rate. The reason you want to get quotes from different lenders all on the same day is because rates/pricing changes daily and sometimes even throughout the day, if there’s a mid-day price change. 

Dara Delgado (NMLS #1510172)

Does this process [of running your credit] count as a hard inquiry on your credit report? Jvalle2

If the lender needs to run your credit to provide you with a rate and fee quote, then yes, it would count as a hard inquiry on your credit.

Dara Delgado (NMLS #1510172)

 

When should you do this [find a lender] in regards to the before, during or after finding a home you like? Jvalle2

You should shop around and then choose the lender you plan to go with before you find the home. This way, once you find a home, your loan person can hit the ground running to ensure your loan closes on time.

Dara Delgado (NMLS #1510172)

 

What if you are wanting to buy new construction? How does that change things? Help! Jvalle2

Often times when you buy a new home, the builder will encourage you to use their in-house lender. You want to get a quote from the in-house lender just like the other lenders and see who provides a quote with the best rate/pricing.

Dara Delgado (NMLS #1510172)

To learn more about the first-time home buying process, visit our resource center. Want to start running the numbers to see what things may look like for you? Make sure to check out the home affordability calculator and mortgage calculator. Have more questions? Add them in the comments below and subscribe to the blog to stay on top of the latest information.

Special thanks to realtor.com’s Danielle Hale and Brad Sivert, as well as to the third-party real estate professionals who shared their expertise: Jeffrey Chalmers (NMLS #76803), Dara Delgado (NMLS #1510172), Faramarz Moeen-Ziai (NMLS #342090) and all of our realtor.com REAL Ambassadors: Thai Hung Nguyen, Rita Tayenaka, Jennifer Hisey Wauhob, Alexa Sanchez, Max Diez, Gonzalo Mejia, Darryl Macha, Drew Coleman, and Hagan Stone.

The above responses are general in nature and not based on anyone’s specific circumstances and is not intended to be comprehensive.  Please consult with experienced professional advisors on any home or financing opportunity.  Lenders, mortgage brokers and other loan professionals are not recommended or endorsed by realtor.com®, and are not the only providers of mortgage loan services of the kinds they offer. Responses provided by third-party professionals do not represent the opinion of realtor.com® or its operator, Move, Inc.


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