Questions often asked by prospective home buyers include:
What should I consider before
Even before starting to look at houses, find out what price
house or condominium you can afford. In general, you can afford to
buy a home equal in price to three times your gross annual income.
More precisely, the price you can afford to pay for a home will
depend on six factors:
1. Your income;
2. The amount of cash you have available for the down payment,
closing costs and cash reserves required by the lender;
3. Your outstanding debts;
4. Your credit history;
5. The type of mortgage you select; and
6. Current interest rates.
What is the difference between
A seller's advertised or list price should be treated as only a
rough estimate of what he or she would like to receive. Some
deliberately overprice, while others ask for close to what they
hope to get, and a few actually under price their houses with
hopes that potential buyers will compete and overbid. The
appraisal price is another estimate of value. The appraised price
is how much money a professional appraiser estimates the home to
be worth and usually is based on comps, or sales of comparable
homes in the same area. Purchase price and sales price are the
same thing. Both terms mean the amount of money the successful
buyer actually pays out to purchase the home.
Are there first time buyer
Numerous programs exist to help first time buyers purchase a home.
A host of private lenders offer low-down payment loans. The
U.S.Department of Housing and Urban Development offers a variety
of programs through FHA that require approximately 4 to 5 percent
cash down. Loan limits vary depending on the county where the
property is located. Fannie Mae has a program allowing people to
buy with just 3 percent down payments. For details, borrowers
should contact lenders who offer government-insured loans.
How can I find a home
Contact the American Society of Home Inspectors; 1735 N. Lynn St.;
Suite 950; Arlington, Va. 22209
Who pays closing costs?
Closing costs vary from one transaction to another and often total
in the thousands of dollars. They may be paid up front or added to
the buyer's loan balance. However, anxious sellers may offer to
pay some or all of the costs to induce a sale. Here are some basic
rules of thumb concerning closing costs: Historically, if one or
more real estate agents are involved, their commissions are
traditionally based on the sales price and paid by the seller at
the time of closing. In recent years, buyers have paid for agent
services in some cases.