Deciding to buy a home is an exciting milestone in any person’s life. It’s also a big financial decision that requires careful planning. The guide below explains some basics of the process to help you get started.
A Helpful Guide for First-Time Home Buyers
What is a mortgage?
Most people don’t have the cash on hand to buy the houses they want outright. A mortgage is a loan that allows you to finance the purchase, breaking it into more affordable monthly payments.
To get pre-approved with a lender, you must provide your credit score and bank statements. The lender uses these values to determine the maximum size of the loan they can give you and set the mortgage interest rate.
How do I know if a house is a good deal?
Look at listings for comparable properties, meaning ones with similar square footage in the area. Stick to ones in the same municipality, as prices in neighboring towns could be dramatically higher or lower based on factors such as school systems.
Check the past transactions for these properties. Prices that went up or down over time could indicate the strength of the market.
What are the differences between seller’s and buyer's markets?
An area becomes a buyer’s market when the demand for homes there declines. Prices fall because of the large inventory, making it easier to buy a home at a competitive rate.
There is high demand in a seller’s market but low inventory, which leads to higher prices and competition for the few available properties. Buyers often see purchases in these areas as investments.
What is earnest money?
The term refers to a cash deposit, roughly 1 to 2% of the home’s total price, that you may make to prove that you’re serious about buying the house. Earnest money is sometimes used in auctions involving bank-owned or foreclosed properties.
You deposit the money into an escrow account when you make the offer. If the deal falls through because of the mortgage, you get the money back. However, you don’t get a refund if you simply change your mind about the purchase.
If you want to buy a home at a competitive rate, check out the auctions held by Greenway’s Real Estate & Auction. With offices in Covington and White Sulphur Springs, VA, we’ve helped people find their dream properties in Virginia and West Virginia for over 60 years. To make your search even easier, we now have an app available on all smart devices. Text LISTING to (540) 698-0883 to get our latest listings, or learn more about our service area online. Let Greenway’s Do It!