If you’re in the market to buy a home, you should understand how the mortgage rate affects your ability to afford a home and watch mortgage rates carefully.
A mortgage rate is the interest rate you pay on the money you borrow to buy your house. A lower mortgage rate makes homes more affordable because it costs you less to borrow money, which in turn increases your purchasing power (the financial ability to buy the home).
A Lender will set a mortgage rate for each person based on several personal factors, such as your credit score. Other items an Lender will look at are
Typically, buyers put down 5 to 20% of the purchase price but this can be as little as 3%. Buyers putting down less than 20% are required to pay Private Mortgage Insurance (PMI) monthly until they build up 20% equity in their home.
While most buyers use personal savings to finance down payments, there are many other options, including gifts or loans from relatives. In addition, many state, county, and city governments offer down payment assistance programs to people in their communities who are well qualified and ready for homeownership.
What is PMI?
If you make a down payment of less then 20%, you’ll have to pay PMI each until you build up 20% equity in our home.
Your realtor works with you here on finding the right property for you. This includes signing you up for multiple property alerts, watching new listings daily, reaching out to FSBO and scheduling showings.
Making the Offer.
Once you find a property you are interested in buying, your realtor will put together an offer for you and advise you on strategies to use that may up your edge to get the offer accepted faster or if there is a multipl offer situation.
Offer Steps
Writing up the Offer
Submitting the Offer
Your realtor can help you determine a fair offer price based on recent market conditions and sale and advise you on other things such as closing date, contingencies and transfer of any personal possession and much more.
Negotiating the Offer
The Seller may counter the terms of your offer and you and your realtor may go back and forth several times.
Finalizing the Contract
When the whole offer is complete signed by both the buyer and seller the property is officially under contract (pending).