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Buyer FAQ

  1. How do I start the home buying process? Begin by getting pre-approved for a mortgage to determine your budget. Then, work with a real estate agent to find suitable properties and start viewing homes.

  2. What's the difference between pre-qualification and pre-approval? Pre-qualification is an estimate of what you might be able to borrow, while pre-approval involves a more in-depth financial assessment and a conditional commitment from a lender.

  3. How much do I need for a down payment? The down payment amount varies but is typically 3-20% of the home's purchase price. Your lender can provide specific details based on your situation.

  4. What is a home inspection, and do I need one? A home inspection is an assessment of a property's condition. While not mandatory, it's highly recommended to uncover potential issues before finalizing the purchase.

  5. What is earnest money, and how much should I put down? Earnest money is a deposit that shows your commitment to buying the property. The amount varies but is often around 1-3% of the home's purchase price.

  6. What is a closing cost, and who pays for it? Closing costs include various fees associated with finalizing the purchase, such as title insurance, appraisal fees, and attorney charges. Both the buyer and seller typically share these costs.

  7. Do I need a real estate agent to buy a home? While it's not required, having a real estate agent can provide valuable expertise, guide you through the process, and help you negotiate terms.

  8. What is a mortgage rate, and how does it affect my loan? A mortgage rate is the interest rate you'll pay on your home loan. It directly impacts your monthly payments and the total cost of the loan over time.

  9. What is a loan prepayment penalty? Some loans have prepayment penalties if you pay off the loan early. Be sure to clarify with your lender whether your loan has this provision.

  10. What is a contingency? Contingencies are conditions that must be met for the sale to proceed. Common contingencies include home inspection, financing, and appraisal.

  11. What is the difference between a fixed-rate and an adjustable-rate mortgage (ARM)? A fixed-rate mortgage has a consistent interest rate and monthly payment throughout the loan term. An ARM has an initial fixed period followed by adjustments based on market rates.

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