FAQs For First-time Home Buyers: Everything You Need to Know (part two)

Michael Kenny
  • Jan 13, 2022
  • 5 min to Read
FAQs For First-time Home Buyers: Everything You Need to Know (part two)

Home buying is too complicated a process for us to cover all the basic questions in one post, so we’ve continued it on to part two of our FAQs For First-time Home Buyers.

When is an inspector necessary and what does one do?  

Building inspectors are experts in the construction of new homes, and they can help you to spot any issues with your home before you sign on the dotted line.

They are usually paid for by the seller – but sometimes buyers ask for this service themselves.

How do I find a lender?  

Lenders are easy enough to find online nowadays- just search “mortgage lenders” or something similar!

You’ll need one that will be able to finance your property purchase at an interest rate that reflects current market conditions (so don’t go choosing based on personal relationships!).

Finding good mortgage rates isn’t always as simple as it sounds given all of these fees involved. This is where using a specialist broker who knows how much you can borrow and how to negotiate with lenders is really handy.

How much will I need for a deposit on my first home?

A minimum of five percent, but preferably twenty-five percent. Some people go as high as fifty or even one hundred percent on their first property purchase!

This may be worth your while if you are planning on staying in the house long-term – it saves money over time by avoiding interest payments. If not, don’t worry about saving too much since many banks now offer loans that require no deposit at all (although the amount you’ll pay back in repayments will be higher).  

What happens after the inspection period passes successfully in purchase agreement negotiations with sellers?

Once the inspection period has passed and assuming that no major problems were found, you will likely start to get loan approval letters from your lenders. This is the point at which you can officially ‘lock in’ your mortgage rate by formally accepting the lender’s offer.

At this time, it is also a good idea to have an attorney review the purchase agreement so that there are no surprises down the road – something that could potentially derail or delay closing on the house.

What should I do if I find out after signing my purchase agreement that there was a problem with the property?

If you find out about any potential problems with the property after signing your purchase agreement, don’t panic! You still have some options available to you.

First, you can try to renegotiate the terms of the purchase agreement with the seller. If that doesn’t work, you may be able to back out of the deal completely – but this is the last resort and could potentially cost you money if the seller sues you for breach of contract.

You should also consult an attorney to see what your legal options are in this situation.

How long until you get your keys once all contingencies have been removed from the sale contract?

Once all contingencies have been removed, you should expect to get your keys within two weeks. If there are any delays, you will be notified in advance.

What is the average down payment for a first-time homebuyer?

The average down payment for a first-time homebuyer varies depending on the location of the property and the price point. However, it’s generally recommended that you save up at least 20% of the purchase price for your down payment.

Can I still get a mortgage if I have student loan debt?

Yes, you can still get a mortgage even if you have student loan debt. However, your lender may require you to pay off your student loans before they approve your mortgage application.

Are there any other extra fees that come along with owning a home that buyers should be aware of or consider before finalizing their offer on a new residence to own?

Yes, there are additional fees that come along with homeownership. One of the biggest costs for a homeowner is property taxes and insurance premiums.

What if I’m self-employed?

If you’re currently Self Employed, it’s going to be harder for you to get approved since lenders need your tax documents from prior years in order to qualify you for a loan program.

In addition, they will want documentation that shows proof of income by way of tax returns or bank statements that show deposits into business accounts, not personal ones.

Is financing available even if my credit score isn’t great?

In some cases, lenders may require borrowers with low credit scores to pay higher interest rates on their mortgages because these loans typically have less favorable terms.

However, there are a number of different financing programs available that cater to borrowers with all types of credit scores.

What should I expect during the mortgage application process?

The mortgage application process may vary depending on the lender you work with, but generally, it will involve providing your personal information (name, address, Social Security number), employment history, and bank account information.

You may also need to provide proof of your income and assets.

Who pays for the title insurance policy, which protects against loss due to liens, mortgages, etc?

The title insurance policy is typically paid for by the homebuyer.

Get Expert Sales Advice Today!

Northwest Realty Group is committed to making sure you are living your “happily ever after” in your dream home. 

We’re here to help you make home buying and selling an easy and enjoyable process from start to finish. 
Our agents will work closely with you every step of the way so you can have peace of mind knowing that we’ll be there for any questions or concerns you may have. If you want to buy or sell property, then contact us today at 702-677-0039!

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