Today we are answering some of your questions when it comes to buying a home.
How much should I save before buying a home?
Even though we have down payment assistance programs that can cover your down payment and you can get seller contributions to cover your closing costs, it’s a good idea to have a healthy savings account in case of emergency or if you want to take a vacation. Ideally saving 2 to 6 months equal to your mortgage payment is good way to start. If your payment is $2,000 per month, you’d need between $4,000 to $12,000 in savings to be in good shape. A great way to save is through a company provided 401K or retirement account, some companies offer a match (as we discussed in our prior episode) and there are accounts that are pre-tax that will allow you to withdraw to put a down payment in a home or borrow against them.
When will my first mortgage payment be?
Your first mortgage payment will “skip” a month. For example, if your home closes in January, then your first mortgage payment will be in March, February will be skipped. This just means that you are paying your mortgage in arrears for the month you already lived in. This is different that paying rent which is usually paid ahead.
What are the first steps of buying a home?
Our recommendation is to sit down with a loan officer and discuss your budget, savings, ideal monthly payment, work history and come up with an action plan that works best for you. Every client is very different from one another, so most people need a customized plan to start working towards buying a home. Sometimes you are pre-approved on the spot and sometimes you need to wait 6+ months, it all depends on your credit score, credit history, work history, current debt, and current savings.
What fees should I expect when I talk to a loan officer?
Most loan companies have processing, underwriting, document preparation or origination fees that are charged when you close on your home loan. At Movement Mortgage we have a flat underwriting and processing fee of $1295. These fees are usually including in your closing costs, along with escrow fees, appraisal fees and other third-party vendor fees.
Do I pay my real estate agent?
When you are buying, you don’t normally pay a commission to your realtor, just a flat transaction fee which can range between $300 to $900 depending on the brokerage. Realtors are paid commission by the seller when the transaction closes. Some realtors may require you to sign a buyer broker agreement which can state that you (as the buyer) must pay them commission when the seller is not willing to pay the buyer’s agent, so make sure to pay attention and read contracts entirely before signing to you are aware of all the costs that are involved.
Make sure to interview different agents and loan officers to find the best match, it will help make your transaction go smoothly and stress free!