Buying a home is an exciting time and we’re ready to help you make it happen. Everyone has wants and needs and it important to keep those in mind. No home is perfect, so this guide will help you decide what is truly important.
Most people have a budget and what kind of monthly payment they can afford. The price of the home is the largest determining factor in what you will get for the size and style of home, location and more.
A trusted lender can help you decide what is affordable and what the monthly payment would be. They’ll take your entire financial picture into consideration for what you can afford. Then they’ll get you pre-approved so you can shop with confidence and your offer will be that much more attractive to sellers.
Our mortgage calculator will help you figure out what the monthly payment would be.
Location and Schools
For many the neighborhood and schools are just as important as what type of home they get. Commute times, neighborhood amenities, and more factor in to what location is best. All listings you view at The Cascade Team have plenty of neighborhood and school information, just click on the Local Info and Maps button to see it.
Schools are can be very important to many buyers. From how good they are, to how close are they, we have great resources for you. Every listing on the Cascade Team shows nearby schools under the Local Info & Maps button.
Get our School and Community Reports to help you decide what is best for you. They let you compare schools and see important stats such as student and teacher ratios. Community reports let you compare communities as well as stats such as cost of living.
Style of Home
What kind of home would you like? House, Condo or Townhome? How many beds and baths, what square footage? Big yard, or no yard? Great views or partial views?
No home is a perfect match. It’s important to prioritize your wants and needs into what you must have and what would be nice to have. You may have to make some trade-offs on lesser importance items.
Your Cascade Team agent can help you prioritize your wants and needs. During home tours they’ll point out how they fit your list.
Pre-approval is important to the home buying process. If you don’t already have a lender in mind, your Cascade Team agent can make some great recommendations. Being pre-approved helps you shop with confidence and makes your offer that much more attractive to sellers.
Getting pre-approved means the lender will pull your credit information and verify that information, usually with pay stubs or tax returns. They’ll provide you with a letter that says your pre-approved for a home loan up to a certain amount. It’s much stronger than a simple pre-qualification which usually does not include the verification piece.
Conventional Loans vs Government Backed Loans
Conventional Mortgages are loans that are not backed by the government. There are many types of conventional loans that work for scenarios such as lower credit score buyers, high priced homes and more.
Government backed mortgages are loans such as FHA, VA, USDA loans.
FHA loans are designed for buyers with down payments as low as 3.5% and less than perfect credit scores. There are fees for these types of mortgages so it’s good to have your lender show you comparisons with conventional loans.
VA mortgages are zero down payment loans for active and veteran military personnel and guaranteed by the Veterans Administration. They also have no mortgage insurance, so they can be a great deal if you qualify.
USDA mortgages are loans to buy homes in rural areas, and some suburban areas too. Low and moderate income buyers may qualify for these loans and can do as little as zero down payment and reduced interest rates.
Fixed Rate Loans vs Adjustable Rate Loans
Fixed rate loans have the same interest rate over the life of the loan. They provide the security of knowing your monthly payments will essentially be the same for the loan period.
Adjustable rate loans typically have fixed rate period of 3 to 10 years and then after that period, the rate can adjust each year. They usually have a lower interest rate than traditional fixed rate loans. Adjustable rate mortgages appeal to buyers who plan to move from the home before the rate adjustments start.
This is where the fun really begins, searching for homes and then touring your favorites with your Cascade Team agent. Start your home search on our website, or our app on your phone.
The Cascade Team App
Finding your next home has never been easier with The Cascade Team App. Search any way you want, save your favorites, jot down notes about the homes, and chat with your Cascade Team agent - everything you need is right inside the app! Get it today at the iOS App Store or Google Play Store.
Smart search learns as you search for homes and will make suggestions of homes that might be interesting to you. If you start searching in one area and then look in another, Smart Search will adjust the location and make suggestions in that area too.
You’ve found the home! Congratulations are in order, but there are a lot of details your Cascade Team agent will be walking you through. The purchase and sale agreement your Cascade Team agent drafts will have a lot of details. Price, closing date, possession date, deposit amount, and contingencies that protect the buyer. We’ll go in depth on a few of the major contingencies.
Earnest Money Deposit
This is the deposit the buyer makes with their accepted offer. It’s usually held with the escrow company and applied to the buyers closing costs at closing time. Earnest money deposits vary by market, but are usually 1-3% of the sale price.
This deposit is what the buyer risks losing to the seller if they break the contract outside of the agreed upon terms and contingencies.
The inspection contingency give you the opportunity to inspect the home, negotiate for repairs if any, or walk away and get your deposit back.
Buyers hire and pay for the inspector which is around $500. The inspector performs a visual inspection and tests various aspects of the home. They issue a report of their findings and usually include photos of any issues found. It’s important to remember that they cannot see into walls and cannot spot every problem that might be in a home.
If buyers ask for items to be repaired, that sets in motion a two round negotiation process:
- Round One: The seller can offer to 1) repair all the items, 2) repair none of the items, or 3) repair only some items. Some sellers may also offer a credit at closing in lieu of doing repairs.
- Round Two: The the buyer can accept the seller’s response above, or negotiate further within a strict 2-3 day limit. At the end of Round Two’s deadline, the buyer must secure a deal and accept, or walk away and get their deposit back.
Financing and Appraisal Contingency
The finance contingency says that if the buyer is not able to secure financing with a good faith effort, within a certain timeframe, they can walk away and get their deposit back. The finance contingency will often have a contingency for low appraisal within it.
It also has terms such as required down payment amount and the deadline to secure the loan. The contingency does not let a buyer out just because the interest rate is not to their liking.
If the lender appraises it lower than the asking price there are options:
- The seller can reduce the sale price to the appraised amount
- The buyer can increase their down payment to cover the difference between sale price and appraised value.
- A second appraisal can be requested to override the first, but there are often conditions that make this difficult.
- The buyer can walk away and get their deposit back.
Current Home Sale Contingency
This contingency says that a buyer will buy a new home when they’ve successfully sold their current home. The contingency typically gives a timeframe to put their current home on the market, obtain a buyer for the current home and close the sale of the current home.
Sellers are usually allowed to continue marketing their home to buyers that don’t have a home to sell. If a new buyer comes along that doesn’t have a home to sell, they can “bump” the first buyer.
In fast markets contingent offers are not popular, but in balanced and slower markets sellers might consider contingent offers.
Title insurance insures your legal right to own the property in case ownership of the property is every challenged. The title insurance company would defend the title to your property.
The title company performs a search examining records to make sure there are no issues that would affect your ownership. Searches may reveal unpaid taxes, judgements against the seller, or restrictions on the property. If there are issues found that affect ownership, they assist with clearing them.
Lenders Policy: This policy is required by the lender and protects them up to the mortgage amount. It’s typically paid by the buyer and the premium is included in their closing costs.
Owners Policy: This policy covers the homeowner for the full property value. It’s typically paid by the seller and the premium is included in their closing costs.
Escrow, also known as the closing agent, is the neutral third party that carries out the purchase and sale agreement and written escrow instructions of the buyers and sellers. They receive the funds and documents necessary to close, co-ordinate signing of paperwork, paying off bills and disbursing funds as required by the closing instructions.
While the closing agent works throughout the entire process, buyers will work them most often towards the end of the transaction. That is when their closing and loan paperwork needs to be signed and any final funds need to be deposited in preparation for closing.