Buying a home can be both thrilling and frustrating, but knowing how the process works beforehand will give you a leg up in your search. Take the House Buying Quiz to see how much you know.
Check your credit score well ahead of the home-shopping process. If you discover an error, you'll have plenty of time to go through the official process of correcting it.
When shopping for a house, getting pre-approved for a loan is ideal. Although pre-qualification is free, it's very unofficial and often unreliable. Pre-approval means a lender has looked into your credit and financial situation more closely and will make you look like a serious buyer to the seller.
Amortization is the process of paying off the principal of a loan in incremental payments that gradually chip away at the principal.
The 30-year term gives you the maximum tax advantage by having the greatest interest deduction.
Unless you pay at least a 20-percent down payment, you'll also have to pay private mortgage insurance (PMI). This can sometimes be pretty expensive, so it makes sense to put as much into your down payment as you can.
Professional Inspections cost anywhere from $200-$500 but are well worth it. Even with new construction, there can be hidden problems that only a professional inspector may find.
An exclusive buyer agent (EBA) works for an office that represents only buyers and does not list properties. A single agency buyer agent (SA) works for an office that represents both buyers and sellers but will not represent both in one transaction. A traditional buyer agent (BA) might work as a dual agent, representing both buyer and seller in one transaction.
Make sure you have a "release clause" in your buyer's agency agreement just in case you find out you just don't like your agent. This will allow you to sever ties without any future problems.
Unfortunately, there's not much you can do short of pleading with the seller. Verbal agreements aren't binding, and you'll find that you have little legal recourse.
The seller is responsible for paying the seller's agent, not the buyer. The escrow fee is a typical fee for a neutral third party to hold the funds during negotiations. A notary should be paid to notarize the documents.