C H A R L E S T O N R E A L T O R
FREQUENTLY ASKED QUESTIONS
HOW MUCH WILL BUYING A HOME ACTUALLY COST ME?
I'll be upfront with you, yes, buying a home has a cost to it. Buying real estate is an investment, but one that increases in value. Some of the upfront costs will include the downpayment, home inspections and closing costs. The minimum downpayment depends upon your loan type, but is based on a percentage of the purchase price. These are 3% for a conventional loan, 3.5% for FHA and 0% for veterans who quality for a VA loan.
IS THERE A WAY TO REDUCE THESE COSTS?
Yes. Many sellers are willing to pay a big chunk of the buyers' closing costs. This can be negotiated with the offer. Additionally, many builders will pay closing costs and offer other incentives with new construction, but it's important to have an agent (like me) that can help you navigate this and get you the best deal. Some builders offer more than others.
DO I NEED A REAL ESTATE AGENT?
It's important that you have someone representing your interests. Just calling the agent that's on the sign isn't the best practice, as that agent is representing the seller. A good agent will conduct searches for you based on your needs, represent your interests in the negotiation, and take a proactive role from beginning to closing to ensure your questions are answered and everything stays on track.
WHEN DO I NEED TO GET PRE-APPROVED FOR A HOME LOAN?
In my opinion, as soon as you decide you're serious about buying you should get pre-approved. It can be heartbreaking to spend hours and days looking at homes only to find out that you aren't able to get approved for a loan that will get you that home. Establish your budget early so you and your agent know exactly what to be looking for.
WHAT ARE CLOSING COSTS, CLOSING AND HOW LONG DOES IT TAKE TO GET THE KEYS TO MY NEW HOME?
In short, the closing process is a 30-40 day period in which your lender is finalizing your loan approval and your closing attorney is handling the legal aspects to be sure ownership can officially transfer from seller to buyer. There are a lot of components to this, such as loan fees, legal fees and pre-paid expenses such as home insurance. I typically recommend folks to expect closing costs to be around 2.5% to 3% of the loan amount, but these can vary and I'd recommend talking more to your lender about this.
WHAT HOME INSPECTIONS SHOULD I GET?
I always recommend for a buyer to get a home inspection. This is not only a great way to learn more about your future home, but will enable you to discover any significant issues with the home. In our area, a CL100 (aka pest inspection) is highly recommended, maybe even required by your lender, to check for wood destroying pests and wood rot. A home inspection is around $500 and a CL100 is typically less than $100. These are conducted during the closing period and I'll help you schedule these and will also be present for both.
WHAT DOES MY CREDIT SCORE NEED TO BE?
Credit score requirements vary depending upon the type of loan. For a conventional loan your credit score typically needs to be at least 680, FHA loan 580, VA loan 580 and USDA loan 640. However, lenders take a wholistic view of your finances that include income, debt, etc. so if your credit score doesn't quite fit with what's above, reach out to your lender and have a conversation.