Frequently Asked Questions:
- Should I rent or buy?
- I’ve decided I want to purchase a home. What do I need to do before I begin home searching?
- Do I need an agent to find a home?
- Can I afford a home?
- What do I need to take with me when I apply for a mortgage?
- I know nothing about mortgages. Are there different types?
- What will I have to pay with a mortgage?
- How much should I offer for the house I want?
- What if I’m paying too much for a home? How do I know?
- Should I have a home inspection? Is it worth it?
Should I rent or buy?
Consider these factors while answering this question:
- How long do you plan to stay in the same place? A long period of time?
- Are you renting a nice & rent-controlled apartment? You may want to stick with renting, but if the rent is expected to increase year after year, you may want to consider buying.
- Are the property values in your area expected to increase? You may want to buy.
Only you can determine whether you’re ready to make the purchase.
I’ve decided I want to purchase a home. What do I need to do before I begin searching?
It is recommended to get pre-approved for a home loan in order to determine the maximum loan amount you qualify for. By doing so, you’ll have increased negotiating power because it will show you are capable of purchasing the home.
Do I need an agent to find a home?
A Phoenix Property Shoppe agent is there to make the process easier and stress free while truly caring about your wants and needs. We’ll will work with you through the entire home buying process, answering any and all questions or concerns you may have.
Agents also have access to the entire MLS (Multiple Listing Service) with the ability to show you every home within your reach and desires. They will also have knowledge about the neighborhood you’re interested in, price ranges of homes & homes that were just listed on the market you may not know about. In essence, the broker will save you time and keep you sane and informed throughout the entire process – making your life a whole lot easier. If you need help determining how to choose an agent, click here.
Can I afford a home?
It all depends on how much money you currently have, your salary, the type of mortgage you get and your debt, if any. You also need to consider whether you have enough to cover three costs including:
- Earnest money: the deposit you make when you submit an offer on a home, which shows to the seller your commitment to purchase,
- Down payment: a percentage of the cost of the home to be paid when you go to settlement, and
- Closing costs: paperwork processing costs
If your offer is not accepted, your money will be returned to you.
To determine how much you can afford, please use the Mortgage Loan Calculator located on our site.
What do I need to take with me when I apply for a mortgage?
You should have with you:
- If both of you are applying for the loan, social security numbers for both you and your spouse;
- Copies of your checking and savings account statements for the past 6 months;
- evidence of any other assets like bonds or stocks;
- a recent paycheck stub detailing your earnings;
- a list of all credit card accounts and the approximate monthly amounts owed on each;
- a list of account numbers and balances due on outstanding loans, such as car loans;
- copies of your last 2 years’ income tax statements; and
- the name and address of someone who can verify your employment.
I know nothing about mortgages. Are there different types?
These are the different types of mortgages:
Fixed-Rate Mortgage:
- Most people use this mortgage.
- 30-year mortgage
- Your interest rate stays the same for the term of the mortgage.
- Advantage: You always know exactly how much your mortgage payment will be; no surprises.
Adjustable Rate Mortgage:
- Your interest rate and monthly payments usually start lower than a fixed rate mortgage.
- However, your rate and payment can either increase or decrease, as often as once or twice a year.
- The adjustment is tied to a financial index, such as the U.S. Treasury Securities index.
- Advantage: You may be able to afford a more expensive home because your initial interest rate will be lower.
What will I have to pay with a mortgage?
Loans have 4 parts:
1. Principal: the repayment of the amount you actually borrowed
2. Interest: payment to the lender for the money you’ve borrowed
3. Homeowners’ insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders
4. Property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year.
How much should I offer for the house I want?
This is where your real estate broker steps in. But you should still consider the following when you’re making an offer:
- Is the asking price in line with prices of similar homes in the area? Compare the prices.
- How much will you have to spend renovating the home? Is it in good condition and up to your standards?
- How long has the home been on the market? If it’s been listed awhile, the seller may be more eager to accept a lower offer.
- Can you afford the offer?
- How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted. In some cases, you may even want to offer more than the asking price, if you know you are competing with others for the house.
What if I’m paying too much for a home? How do I know?
Look up other homes much like the one you’re considering to purchase regarding size and characteristics that were sold within the past couple of months. Compare homes with your agent.
Should I have a home inspection? Is it worth it?
Yes! While a professional home inspection costs between $200 & $500, it’ll be worth it. Why? The inspection finds any defects while also offering information on how to maintain and repair your home, if needed. For more information, check out our Home Inspection section.
