Thinking of buying a home on the Seacoast of Maine or New Hampshire? Whether you're a first-time buyer or if it's just been a while since the last time you bought, you probably have some questions about how the process works. Don't worry; we've got answers! Take a look at some of the most frequently asked questions we hear from Seacoast home buyers... or just contact us to ask any specific questions you might have about buying a home on the Seacoast.
Where should I start?
- Finances are always a good place to start. Take a look at where your money goes: how much you earn vs. how much you spend. Think about setting a budget, or at least determine how much you're comfortably willing to afford paying each month on a mortgage. Keep in mind that home ownership includes additional expenses, like regular maintenance and utilities, too.
- It's also a good idea to explore the area where you're considering buying. Drive through its various neighborhoods, but also do some research into things like amenities, school districts, commute times, and even crime rates and safety.
- If you're a first-time buyer, you might want to get more information first!
How do I know what to look for in a home?
- Remember, real estate is all about location, location, location! Just about anything about a home can be changed... except its location! That's why it's most important to first select your area and neighborhood, then worry about finding a home.
- When selecting a location for your home, consider things like how close you'd like to be to various amenities or attractions. Think about how long you'd like your commute to be. Look into the local schools, too, because even if you don't have kids, school districts can be important for home values.
- Once you get an idea of where you'd like your home to be, you can start to consider some of the features you'd like it to have. Start with features you absolutely need, like a specific number of bedrooms or bathrooms, a garage, a dock, etc. Then focus on features you'd strongly like to have. Would-be-nice features have a place on your list... but just be sure not to sacrifice any needs or strong wants for them!
Why should I use a real estate agent?
- A real estate agent works for you to ensure your best interests are met. Your agent will advocate for you to ensure you get the best possible deal—price, conditions, features, and more.
- A good agent can offer invaluable advice. Agents understand the finer details of the market—which neighborhoods are going to hold their value, which home features are worth paying more for, which homes are overpriced, and more. Having an agent on your side means getting expert advice every step along the way.
- An experienced agent understands the homebuying process inside and out, lesser-used loans, one-off situations, and even extenuating circumstances. Whether you're a pretty average buyer or definitely an unusual situation, odds are, your agent's seen it before and knows just what to do.
Where and how can I get a loan?
- There are a lot of different loan options out there these days, and that means a lot of different options for every buyer. Even if you don't have fantastic credit or a 20% down payment ready and waiting, you might still be surprised by the number of loan choices you have. In fact, there are numerous federal and local government loan programs designed to help every buyer fulfill their dreams of homeownership.
- The best way to learn more about what your options are is to pick up the phone and start calling! Ask local friends and relatives for recommendations, or simply start with the companies you already bank with. Even just talking on the phone with a lender can clear up a lot of questions and shed light onto what possible options you might have.
- While you're talking to lenders, they might ask if you'd like to get prequalified for a loan. This is a terrific way to determine your actual borrowing power—how much you can afford, what the monthly cost will look like, and what red flags might pop up in your financial history.
What costs are associated with owning a home?
- Well, first and foremost, there's your mortgage. However, this payment doesn't just include your repayment of money borrowed from your lender (also known as the "principal"). There are a few other parts included, too. As with a car payment, your interest is also included in your monthly cost. There are usually two other pieces included in that monthly payment, too—property taxes and homeowners insurance. Together, the four parts of the mortgage are abbreviated PITI (principal, interest, taxes, insurance). Note: estimates given to you by a lender or a mortgage calculator typically include an estimate of these costs!
- In addition to that regular monthly payment, there are some other regular costs to owning a home. This includes more predictable payments like utilities (electricity, gas/oil heating, water, sewer, cable/internet), as well less foreseeable payments like regular maintenance, improvements, and updates.
- Additionally, some neighborhoods or condo communities might require additional fees for things like common area maintenance, exterior maintenance, or other various community amenities.
What will I have to pay up front?
- Earnest money: This payment usually ranges from about $1,000 to $5,000 and is submitted with your offer to show the seller you're serious. If the offer is accepted, it goes towards your closing costs.
- Down payment: Typically, this is factored as a percentage of the total cost of your home. More conventional loans might require a down payment of 10 – 20%, though there are government loan options that require as little as 0% down.
- Closing costs: There are a number of other miscellaneous costs that go into buying a home—home inspection and appraisal, lender fees, title searches and insurance, processing fees... For buyers they're mostly pretty low and typically amount to a very small percentage of your total costs. Your lender can give you an estimate when you get preapproved and will provide an exact breakdown of costs before you close.
What is "due diligence"?
- Typically, when you make an offer on a home, there are a few contingencies, like a home inspection and appraisal. These basically state that if there's something wrong with the home or it doesn't value to the amount you offered, you've got a reason to back out, no penalty. After your offer is accepted by the seller, you have a predetermined period of time to do your "due diligence"—that is, to make sure everything checks out and you still want to buy the home.
- During this "due diligence" or "escrow" period, you'll likely order a home inspection to check for major flaws or maintenance issues. Should you find any, you have the right to request repairs or a price reduction. You also have the right to walk away and get your earnest money back. Same for the appraisal—your lender likely isn't going to lend you more money than the home is worth, so if the home doesn't appraise, your mortgage probably isn't going to be approved.
- At the same time, a third-party escrow company will probably be doing a little behind-the-scenes research to make sure there aren't any possible contenders for the property that might dispute your right to own the land. This is called a title check.
I Still Have Questions!
That's easy! Contact us today and we can answer any of your home buying questions about homes for sale and real estate on the Seacoast and its many beautiful communities.
Want more information? Learn more about buying a home on the Seacoast of Maine or New Hampshire.