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Questions about buying

What home can I afford?

This depends on your income and other financial obligations. The best way to know is to  speak with a mortgage specialist to discuss your home buying options and to get pre-approved for a home loan. Getting pre-approved for a loan not only makes you an informed buyer but it allows you to make an offer on a home when you find the right one!

What does it mean to be pre-qualified for a loan?

Getting pre-qualified is the initial step in the mortgage process, and it’s generally fairly simple. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluating this information, a lender can give you an idea of the mortgage amount for which you qualify. Pre-qualification can be done over the phone or on the internet, and there is usually no cost involved. Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.

The initial pre-qualification step allows you to discuss any goals or needs you may have regarding your mortgage with your lender. At this point, a lender can explain your various mortgage options and recommend the type that might be best suited to your situation.

If you’d like to speak with a Trident Mortgage Specaliast about your financing options, please fill out the buyer form on the page for ‘Buyers’

*Trident Mortgage is an affiliate company to Berkshire Hathaway Fox & Roach Realtors

What does it mean to be pre-approved for a loan?

Getting pre-approved is the next step, and it tends to be much more involved. You’ll complete an official mortgage application (and usually pay an application fee), then supply the lender with the necessary documentation to perform an extensive check on your financial background and current credit rating. (Typically at this stage, you will not have found a house yet, so any reference to “property” on the application will be left blank). From this, the lender can tell you the specific mortgage amount for which you are approved. You’ll also have a better idea of the interest rate you will be charged on the loan and, in some cases, you might be able to lock in a specific rate.

With pre-approval, you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level. Obviously, this puts you at an advantage when dealing with a potential seller, as he or she will know you’re one step closer to obtaining an actual mortgage.

If you’d like to speak with a Trident Mortgage Specialist about your financing options, please fill out the buyer form on the page for ‘Buyers’

*Trident Mortgage is an affiliate company to Berkshire Hathaway Fox & Roach Realtors

Can I buy a home and sell my home at the same time?

Yes, you can—but it’s the real estate equivalent of walking a tightrope. On the one hand, if you buy a home before you sell the one you’re in, you may find yourself overextended financially; if you sell before you buy, you might need to lease/rent a place before finding a new home. However, there are ways to do both at once, and one option is to use the “sale contingency” in your Agreement of Sale (AOS). This means you only agree to buy the home if you can sell the one you’re in. This said, the seller must agree and the more contingencies attached to an offer, the less attractive it is to the seller.

What do you think a seller will accept as a fair price?

As a rule of thumb, knocking 5% off the list price won’t ruffle any feathers. If it’s been sitting on the market for a few months or the asking price is over market value, you may be able venture below that, but it depends on how motivated the sellers are.

How do I know if a property is a good deal?

While there are no guarantees, be rest assured that with research, you can keep surprises to a minimum. The best way is to check out comps—what similar properties have sold for in the past 6 months-and you’re not paying over or much over current market value. Most homes in good subdivisions or neighborhoods, Rittenhouse being a good example, tend to appreciate in value. That said, how quickly it appreciates can depend on many factors, perhaps most importantly, the economy at both the local and national level.

Should I get a home inspection?

While buyers often wonder if a home inspection is truly necessary, most Realtors unequivocally say yes, yes, and yes. A home inspection is vital part of the home buying process and only in rare events should it be overlooked. A home inspector checks the condition of the roof, electricity, heating, AC, plumbing etc.. Ensuring these things work prevents you from paying to fix them in the future. If some things are not up to par, you can negotiate with the seller to get those fixed before you close or you can request a credit to do the repairs yourself. A credit is often seen as being preferable because it allows you to oversee the repairs.

How quickly can I close?

Typical escrow periods while you’re obtaining a mortgage is 45-60 days. If you’re paying in cash the time to closing can often be reduced significantly. In either case, it’s usually best not to rush the process and to remain flexible.

What is title insurance?

Title insurance is insurance that protects the lender and buyer against any losses incurred from disputes over the title of a property.

Can I back out if I change my mind?

While buyers can always back out of a deal, doing so without good reason may forfeit their earnest money, this is the cash put down to secure the offer, typically around 3-5% of the home’s price.

Contingencies in a contract however, such as the home inspection or mortgage contingency, may allow you to walk away without losing any money should either one fail.

What are my buying expenses in PA and in Philadelphia County?