What to Ask When you are a First Time Buyer

When you are a first time home buyer, you need to actively ask questions of both your real estate agent and your lender to assure you are buying the house you really want and getting the right loan for your needs. Your real estate agent will guide you through questions about your new property. Your lender will guide you through questions about your mortgage. Failing to ask questions of either one of these sources will leave you with problems at some point in the future.

Is this Pending Inspection?

Before signing any contract to purchase a home, may sure the documents stipulate adequate time for a home inspection. Even brand new homes have flaws you cannot see. It is important to get a home inspector to review the home and issue a inspection report to be sure you are getting a home you can live in. Once a home inspection is completed, you can add stipulations to the purchase contract. For example, an inspector needs to make sure all of the electrical wiring has been installed to code. Putting this condition in your purchase offer is the only way to protect against losing money if you walk away from the sale. Be sure you have sufficient to time to complete inspection so that you do not lose your initial deposit.

Initial Deposit Timeframes?

When you purchase a home, you will be required to put down an initial deposit to hold the home for purchase. Be sure to give yourself sufficient time to get your money back, if something should go wrong. There are a few timeframes to take into consideration, inspection, appraisal, loan application and approval. Be sure that your contract states that you will get your money back if any of the stipulations do not work out properly. Typically, you should ask for 30 days to complete all paperwork and be refunded your initial deposit, however, if lenders are behind you will need to extend. The following is a quick list of typical timeframes:

  • Home Inspection: Typical turnaround time is 7 days
  • Appraisal Report: Typical turnaround time is 7 days; Schedule after home inspection so that you know if you still want to continue
  • Application: Typical turnaround time is 3 days; schedule right away to get everything started
  • Approval: Typical turnaround times are 30-45 days; after your loan application, a lender will also need appraisal to complete approval.

What are the Monthly Maintenance Costs?

Your mortgage is not the only cost associated with your new home. First, you will need to pay taxes and insurance premiums on the property. While most people know these factors, they may not remember to ask about home owner's association (HOA) fees and other utilities. HOA fees are typical for condos, town homes and planned unit developments. Additionally, be sure to ask about water and trash average fees for the neighborhood because you may not be accustomed to paying for those fees. Keep in mind that new developments tend to have neighborhood fees that keep the community property grounds maintained, ask your agent about all of those fees.

Am I Eligible for an FHA Loan?

Once you have determined your new home is a good deal, it is time to negotiate the details of your mortgage. Even if you have been pre-approved, you will have to meet with your mortgage lender to finalize any sale and have the financing provided to you or the seller. FHA loans work well for first time buyers because rates tend to be low and there is a limit on closing costs. FHA lending guidelines also tend to be more flexible and require lower down payment amounts than Conventional loans.