The Realtors at Homeworx are here to serve you. Whether you are leasing or selling your home, or looking for your next new home, we will be there every step of the way!
First and foremost: are you paying cash or will you need financing?
If you will be using a loan to purchase your home, we suggest getting pre-approved with a lender as soon as possible. Not only does this help you review your finances to know how much house you can afford, it also helps you submit a strong, serious offer when you find your home.
Sellers often won’t consider an offer without pre-approval and in multiple offer situations, offers with pre approval letter attached will almost always carry more weight. Gather your financial documents (income verification, tax returns, account statements for assets, etc) and review your credit report for discrepancies.
Find a lender that meets your needs and begin applying for a pre approval home loan. Pre-approvals are usually valid from 60 to 90 days.
Do you need to find a home loan lender? Click to receive a list of reputable home lenders.
Fixed-Rate Loan: This is the most common conventional loan type. The interest rate will remain the same for the life of the loan. These loans usually are for 15 or 30 years. This loan is good for people who plan to stay in their home for awhile. This type of loan usually requires a down payment of 5-20%. The higher your credit score is, the lower your interest rate will be.
Adjustable-Rate Mortgage: With an adjustable rate loan, your interest rates (and therefore monthly payments) will adjust with fluctuations in the current interest rate. These changes usually occur once a year. Although you can typically secure an initial lower interest rate for a period of time (generally 5 or 10 years), if the interest rate shoots up, so will your monthly payments. This type of loan is good for people who plan to sell their home before the fixed-rate period has expired. You can usually get better rates on this type of loan when buying a home with bad credit or lower credit scores.
FHA Loan: Federal Housing Administration loans are backed by the government. There are limits to these loans. For this loan type, you will need to connect with FHA approve lenders and search for FHA approved homes. These loans typically allow you to put down less of a down payment on a home (as little as 3.5%). These loans are fixed-rate mortgages and require the mortgagee to pay private mortgage insurance. This type of loan is a good fit for buyers without a substantial down payment or those buying a home with no money down.
VA Loan: If you have served in the United States Military, you can possibly qualify for VA Loan benefits which is an excellent alternative to a conventional loan. There are no down payment or private mortgage insurance requirements with a qualified VA Loan. There are VA loan guidelines on the type of home that can be purchased. It must be used as your primary residence and there are property condition requirements that must be met.
USDA Loan: This is another type of government-sponsored loan. This loan is for home buyers in rural areas and offers affordable mortgage payments. There are debt to income stipulations to receive a USDA loan approval and you will be required to purchase private mortgage insurance. Final determination of property eligibility must be made by Rural development upon receipt of a complete application. View eligibility on USDA loan map (https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfpd).
Bridge Loan: If you are purchasing a new home before selling your current residence, you might want to consider getting a Bridge Loan. It is also known as a “gap loan”. Lenders can wrap your current and new mortgage payments into one. There are credit and debt-to-income requirements for a bridge loan application, but if you qualify, you can transition between the two houses without a huge financial hiccup.
Private mortgage insurance (PMI) applies when a buyer is putting less than 20% down.
Having less of a down payment is considered a higher risk for lenders. Private mortgage insurance companies insure the lender for that higher risk. PMI typically costs between 0.5% to 1% of the loan amount on an annual basis.
That private mortgage insurance cost is then rolled into your loan. While you are unable to negotiate the rate of your PMI, there are other ways to lower or even eliminate PMI from your mortgage payment.
Price Range: Review your finances and find out what your budget for buying a new home. Our Mortgage Loan Calculator can help you get started! When calculating how much you can afford, please keep in mind that you will be responsible for homeowners insurance, property taxes and, in some cases, mortgage insurance. Often, lenders will add these into your mortgage payment in addition to the principal and interest. Also, budget for maintenance and upkeep, lawncare, and applicable HOA fees, or other costs and fees associated with home ownership vs renting.
Location: Consider your commute to work, proximity to shopping, dining, attractions, and ease of access to turnpikes. It is helpful to drive around and visit the areas so you know what will best meet your needs.
School System: Before you buy a house, make sure you are getting your child in the education system of your choice. It’s important to do your research! You can view online public school ratings, teacher to student ratios, etc online. greatschools.org and schooldigger.com offer information on the various public school districts. If there is a particular school system you desire, search homes for sale by school district. There are also many private school options available in the areas we serve. Amenities: What amenities are important to you and your family? Amenities in homes vary across neighborhoods. Be mindful of and relay those to your Realtor so he or she can match you with houses for sale in neighborhoods that offer those amenities. A few examples of such amenities are storm shelters, appliances, and neighborhood amenities such as pool, playground, gym, or clubhouse.
Once you have found homes to view, your Realtor will schedule showings so you can see the home in person! There are many things to keep in mind when viewing houses for sale. The homeowners are typically not present during the viewing, so take your time and really look at the home! Bring a notepad if there are any details you want to write down. Be sure to check the condition of the home and make note of any repairs or improvements.
Your Realtor will help you with all of the paperwork. He or she will also help you determine the price you should offer. You will need to include earnest money to show you are serious about your offer. Discuss any additional terms or contingencies you want included in the offer with your Realtor. For example, you might offer full asking price if the owner replaces the flooring. That would need to be included in the offer. Also, you will need to put an expiration date/time on the offer. You do not want the seller to hold your offer indeterminately while waiting for other potentials. You will also need to include time frame for having inspections completed. Your offer should also include a potential closing date.
The seller can make a counteroffer if they do not accept your initial offer. Rather than outright declining the offer, they may make modifications and re-submit those to you for consideration. Be sure to review all the adjustments they made to the contract with your Realtor. Once you have reviewed it, you can either accept the changes or make a counteroffer to their counteroffer. The contract will be final once you and the seller have agreed to any adjustments made to the contract.
Earnest money in real estate is money you put down as a good faith gesture to show that you are serious about purchasing the home. The money is deposited into an escrow account with the seller’s broker or title company. Earnest money at closing will go towards your down payment or closing costs.
The whole house, exterior and interior, will need to be examined by a professional to ensure it is in proper working order. Everything from the roof and foundation, to the plumbing and electrical systems will be inspected. Some common issues noted on inspections are things such as: window issues, structural issues, chimney cracking, failing roof, wood and trim rot, leaking pipes, GFCI protection, HVAC systems old, etc. In addition to a general home inspection, you need to have a termite inspection. An inspection for termites and wood-destroying insects is required by home lenders. If you are financing your home, your lender will also have an appraisal done to determine the value of the home.
The timeframe from when the purchase contract is fully executed until the purchase is complete at closing is referred to as escrow. Prior to closing, any money you set aside for the purchase (ie: down payment, etc) is held by a third party, usually the title company, until the purchase is closed. There is also an escrow account after closing. Most home lenders hold money in what is called an escrow account. That money is used to pay your property taxes and insurance. It will be lumped in with your monthly mortgage payment. At the end of each year, the lender will adjust the amount needed each month for your escrow payment based off the fluctuations in your property taxes in insurance.
Closing costs usually range from between 2-5% of the mortgage loan. These are the fees and expenses that you must pay before becoming the legal owner of the home. They can include surveys, title searches and insurance, appraisal fees, loan origination fees, discount points, deed-recording fees, taxes, and some prepaids such as homeowners insurance and property taxes. The buyer typically pays for any closing costs relating to their mortgage loan and the seller typically pays the Realtors’ commissions and other fees related to transferring the property. While closing costs must be paid, who pays is often negotiable. Ask our Realtors for more information!
Your Realtor will arrange a final walk-through of the home prior to closing. This is to ensure the property you are about to buy is in good condition and has not been altered or damaged since you last saw it. The closing generally takes place at the title company. You will need to bring identification. Drivers licenses or passports are normally accepted; however, check with your Realtor to find out what is required by the title company. You will sign all pertinent legal documents, including the agreement between you and your lender regarding the mortgage, and the agreement between you and the seller that transfers ownership of property, and the closing disclosure which is an itemized list of your final credits and charges. You will also pay closing costs and escrow items at closing. Ask if those fees can be wrapped into the loan balance or if you will need to bring funds to closing. Finally, you will receive the keys and documents to your new home! Congratulations!!
Now that you own a new home, it’s time to make it your own! Our professional team at Next Generation can customize your home to your desires! From cosmetic updates and exterior renovation to full restoration, our professional team will ensure that your budget fits your project and your home is tailored to your style and preferences!