First time Orlando home buyers are always bursting with questions about the home buying process, and they should be. Buying a home is one of the most if not the most important decisions of your life, especially if it’s your first time. For most people, the process can be overwhelming and even discouraging at times.
In a perfect world your first home buying experience should be stress free and enjoyable but chances are their will be a few bumps on the road to the closing table. However, with the right Orlando realtor in your corner, you can rest assured that any problems or issues that may arise will be handled diligently and professionally.
Over the years, I’ve helped hundreds of first-time Orlando home buyers through the process so I decided to put together a list of questions and suggestions designed to people prepare to buy that first home.
6 Steps To The Closing Table
- Pre-Qualify for a loan
- Find a house
- Submit an offer
- Secure your financing
- Appraisal & Inspections
- Close the deal
How Much Can You Afford?
The answer to this question is different for everyone. Lending institutions resolve how much you can afford by looking at your monthly gross income, existing debts and your monthly mortgage payment by using 2 ratios. The first one is the front end ratio which compares how much your monthly mortgage payment will deduct from your monthly income. The back end ratio compares how much your entire debt payment will deduct from your monthly income.
The ratios differ a bit from lender to lender but a high credit rating may help you to get a larger loan than would be normally allowed. I would advise any potential home buyers to consult with several lenders to see which one has the best rates and fees.
How Much $ Will You Have To Bring To The Closing?
The dollar amount that you will have to come up with to buy the house depends largely on the type of loan and the purchase price of the home. The first fee that you will be hit with is an earnest money deposit when your offer gets accepted. Inspections are also the responsibility of the buyer which can cost between $200-$800 depending on the size of the home and what kind of an inspection it is.
The down payment on your loan will be by far the biggest out of pocket expense. This is the percentage amount of the purchase price that you have to pay in order to receive the loan. There are several loan options available depending on which one you qualify. Buyers are typically required to pay for part of the closing costs on the transaction. These are fees associated with the processing of all the paperwork, notary fees, and other odds and ends provided by the title company. It’s common practice for the mortgage broker to provide you with an example of what the closing costs will be based on the size of the loan they qualified for.
I always suggest that when home buyers sit down with a mortgage specialist that they ask to be shown an example of what their closing costs would look like, based on what they qualify for.
Make Your Wishlist
Put on paper what the perfect home will look like for you. Things like location, square footage, number of bedrooms and bathrooms should be at the top of the list. Don’t let everything on the list be a deal breaker. You don’t want to let your dream house slip away from you because the downstairs bathroom is a bit small when the rest of the house was wonderful. Remember that anything can be renovated to meet your taste eventually.
What Will My Orlando Real Estate Agent Do For Me?
Your Orlando realtor is there to assist you during the home buying process from A to Z. Their job is to scour the MLS until they find you a list of homes that meet your needs based on your wishlist. Depending on the inventory that’s available, they will show you any homes that meet the criteria. When they do find a home that you love, it’s their job to negotiate the price on your behalf to make sure that you get the best deal possible. They will also prepare the purchase contract to make sure that it’s in your best interest. It’s your realtor’s responsibility to work directly with the title company, mortgage company, listing agent, inspectors, etc. to make sure that all the pieces of the puzzle fit together perfectly. They should keep you in the loop every step of the way while answering any questions you may have.
What Won’t My Agent Do For Me?
A real estate agent is not qualified to provide you with legal advice and should refer you to a real estate attorney if the situation requires it. A realtor won’t provide you with financial advice either like how much you should spend on a home. Realtors are there to provide advice, give you facts about the market and provide you with all the information you need for you to make an educated decision.
At the end of the day, you the home buyer will be the one paying the mortgage, not your realtor, so the final decision has to rest with the you. If your agent is doing anything to make you feel uncomfortable or pressured to make a decision, then either set them straight or hire another realtor.
Closing Costs, What’s That?
Closing costs are fees that are associated with the closing of the transaction not including your down payment. These cost include title ins policies, recording costs, appraisal, courier fees, lender fees, etc. Typically closing costs will run anywhere from two to three percent of the home’s purchase price. Closing costs are usually paid for by the seller and the buyer depending in what was agreed upon.
Inspections And Appraisals
A buyer should always have a home inspection done as soon as the contract has been accepted. The home inspector should address all the structural components of the home as well as things like the electrical, plumbing, A/C, roof, insulation, and appliances. This will give you piece of mind of knowing if everything’s in good shape or not.
Appraisals are much more in depth version of an inspection and it’s used to determine the value of a home. Many times, the value and the sale price don’t match up. The appraisal also ensures that the home meets FHA standards and is fully functional. This is beneficial for the buyer and also helps to protect the bank’s money.
What About Down Payment Assistance?
There are several down payment assistance programs available in Florida, one of the most common in Orlando is through Orange County. The amount of assistance available is from $7,500 to $10,000 and applicants have to complete a homebuyer’s education program, as well as secure a first mortgage and the property must be located in Orange County.
As an Orlando real estate agent, I have helped countless first time home buyers reach their goal of home ownership. If you need help finding your Orlando dream home contact me, Jenny Zamora at http://orlandorealtyconsultants.com/contact/