FAQ
Am I Ready to Be a Homeowner?
Home ownership is a big undertaking and not to be taken lightly. There are many pitfalls that come from homeownership. Make sure you are pre-qualified with a lender and do a reality check when it comes to your budget.
Is Renting or Buying Better?
This will depend on the current market. High interest rates and high housing prices leads to high monthly payments. Rent prices may continue to go up but may be significantly less than current mortgage payments.
What Is the Lender’s Formula?
One key formula that lenders use is the Debt-to-Income (DTI) ratio. The DTI ratio is a financial metric that compares a borrower’s monthly debt payments to their gross monthly income. It helps lenders assess a borrower’s ability to manage their debt payments relative to their income.
Total Monthly Debt Payments include housing-related expenses (mortgage or rent payments, property taxes, homeowners’ insurance, and any homeowners’ association fees) and other monthly debts (such as car loans, credit card payments, and student loans).
Lenders typically have maximum allowable DTI ratios, and borrowers with lower DTI ratios are generally considered less risky. The specific threshold for an acceptable DTI ratio can vary between lenders and loan types.
What Do I Look for in Homes?
Look for what works for in terms of size, number of bedrooms and baths. Also, what fits into your budget.
Do I Need a Home Warranty?
Home warranty’s are great for fixing issue that may arise in the short term. But a home warranty is not necessary.
What Should I Expect at Closing?
Closing typically takes place at the office of a title company, escrow agent, or an attorney. The buyer, seller, real estate agents, and possibly representatives from the mortgage lender will be present.
You will be presented with a series of documents to review and sign. These documents may include the Closing Disclosure (CD), the mortgage note, the mortgage or deed of trust, the loan agreement, and various other legal and financial documents. Take the time to carefully read and understand each document before signing.
You’ll need to pay closing costs, which may include lender fees, attorney fees, title insurance, property taxes, and other miscellaneous expenses. These costs are often paid by certified check or wire transfer.
After all documents are signed, and funds are disbursed, the buyer receives the keys to the property. This signifies the completion of the transaction, and the property is officially yours.
What Is Pre-approval?
Mortgage pre-approval is a crucial initial step in the homebuying process. It involves a thorough assessment by a mortgage lender to determine how much money you may be eligible to borrow for a home purchase.
During the pre-approval process, the lender reviews your financial health, including your income, credit history, debt-to-income ratio, and employment stability. This comprehensive evaluation helps determine the amount of money you can afford to borrow.
Am I Ready to Rent?
Similar to purchasing a house, being ready to rent will be determined by your financial situation and they size of a place that you want to rent.
What Should I Offer?
The offer on a property should be inline with the current market. Take into account any repairs needed for the property and any comparable property pricing.
Can I Ask You for Advice?
Yes of course, you can always ask for advice. We are always willing to help with any additional question that you may have.