Tag: closing

Frequently Asked Questions: Real Estate Edition

Posted on by Jessica Ward

 

The Most Frequently Asked Questions in Real Estate:

Expert Insights for Oregon & SW Washington First Time Home Buyers 

Navigating the real estate market in Oregon and Southwest Washington can be complex. As an experienced real estate professional with deep knowledge of the local market, I’m here to provide answers to the most frequently asked questions I receive from clients. From understanding mortgage options, to tackling common buyer and seller concerns, this guide will equip you with the information you need to make informed decisions. Whether you’re buying your dream home in Portland, Vancouver, the scenic Willamette Valley, or anywhere else in the Metro area I’ve got you covered with expert advice tailored to the unique nuances of the Oregon and SW Washington real estate markets.

 

What is the first step in buying a home?

  • The first step is to determine your budget and get pre-approved for a mortgage.

How do I know how much I can afford?

  • Your lender will consider factors like income, debt, credit score, and down payment to determine your affordability.

What is a down payment?

  • A down payment is the upfront amount you pay towards the purchase price of the home. It typically ranges from 3% to 20% of the home’s price.

What is a mortgage pre-approval?

  • Pre-approval is when a lender evaluates your financial situation and gives you a loan amount you are likely to qualify for.

What additional costs should I budget for?

  • In addition to the down payment, consider closing costs, home inspections, property taxes, homeowners insurance, and maintenance.

What’s the difference between a fixed-rate and an adjustable-rate mortgage (ARM)?

  • A fixed-rate mortgage has the same interest rate for the entire loan term, while an ARM’s rate may change over time.

What is closing?

  • Closing is the final step in the home-buying process where you sign all the paperwork and officially become the homeowner.

Can I buy a home with student loans or other debts?

  • Yes, but your debt-to-income ratio will be considered by lenders when determining how much you can borrow.

What is a good credit score for buying a home?

  • Generally, a score of 620 or higher is considered good for most types of loans, but the higher your score, the better your loan terms will be.

What is the difference between pre-qualification and pre-approval?

  • Pre-qualification is an informal estimate of how much you can borrow based on basic financial information. Pre-approval is a more formal process that involves submitting financial documentation and allows you to get a specific loan amount from a lender.

How long does it take to buy a house?

  • From making an offer to closing, the home-buying process usually takes around 30-45 days. However, this timeline can vary depending on factors like negotiations, inspections, and financing.

What is a contingency, and should I include one in my offer?

  • A contingency is a condition that must be met for the deal to go through, such as a home inspection or financing contingency. It’s wise to include contingencies to protect your interests, especially as a first-time buyer.

What are the best mortgage options for first-time buyers?

  • FHA loans, VA loans (for military members), and conventional loans with low down payments are popular options for first-time buyers. The best loan for you will depend on your financial situation, credit score, and down payment.

What is earnest money, and how much should I offer?

  • Earnest money is a deposit that shows the seller you’re serious about purchasing their home. Typically, earnest money ranges from 1% to 3% of the purchase price. This money is credited toward your closing costs or down payment if the sale goes through.

What happens if I don’t get approved for a mortgage?

  • If you’re not approved for a mortgage, you can work with your lender to understand why and address any issues, like improving your credit score or reducing your debt. You may also explore other mortgage options or down payment assistance programs.

For more frequently asked questions, in depth information & a more personalized discussion please register for either a virtual or in person first time home buyers class https://www.livingroomre.com/stories/first-time-home-buyer-class-southwest-washington/

 

The Long and the Short of It: A Quick Chat On Closing Timelines

Posted on by Living Room Realty

Congrats to our buyer J for the successful close of his dream home, in his dream neighborhood, of Lake O!

Let’s have a quick chat about closing timelines: nowadays, its rare to encounter sellers wanting a longer close (than the typical 30 days). This case was a little different. The house was truly decorated like a museum, and they needed time to be able to move all of their worldly possessions out and patch the walls for the new owner.

More often than not, in competitive scenarios we’re seeing cash closes of two weeks, sometimes even three week closes on financed transactions – such short timelines for all that goes into such a big purchase!

Occasionally, a seller prefers either a longer close, or “rent back” period (when the home closes on a typical timeline but then the seller “rents” the home back from the new owner).

In general, it is most advantageous for buyers to be amenable to the timeline of the sellers when writing offers, whether or not there’s competition: if it’s not a match, the seller will either reject the offer or accept with a sour taste in their mouth going into the transaction.

In this case, the seller didn’t mind waiting for the funds (or didn’t need the funds to be able to move forward with their next home purchase) and didn’t want to deal with the nuances of a “rent back”, so we adjusted to a longer close. It allowed for a comfortable inspection period and a cushy timeline for back and forth communications – what a change of pace in this crazy market! It was also just the concession needed to get our offer accepted $50k UNDER list price !!

Thankfully, buyers don’t get any cooler (or more reasonable) than J, who was uber flexible on timelines and understood what it would take to make his homeownership goals a reality.

Don’t hesitate to reach out if you’d like to discuss more in depth how closing timelines can help to inform your offer-writing strategy as a buyer.