The housing market is always changing. Local realtor, Toni Morin answered questions about the process of buying a house.
Teresa Jones: How far in advance should the buyer check their credit report before buying a house?
Toni Morin: Generally, it depends on your credit history. If there are items that need to be resolved on your credit report, i.e. collections, you will want to start cleaning up your credit report as far as 12 months prior to starting the buying process. Otherwise, if you have good credit you really do not need to pull your own credit report your lender will do that. Remember the better your credit score the better interest rate you can get with the lender. I always recommend using a local lender as it makes closing easier.
TJ: What are closing costs?
TM: To find the term involving closing cost and all other cost that could possibly be required when purchasing a home, go to https://en.wikipedia.org/wiki/Closing_costs.
TJ: How much money does someone need to purchase a home?
TM: The amount of money you will need depends on the type of mortgage you will have, i.e, FHA, VA, conventional. You will usually need anywhere from 3.5% to 20% down depending on your loan. Additionally, you will need to pay earnest money (paid to the seller when you make and offer), and closing costs (paid at the Title Office upon convenience of the property title) which will depend on the amount of the property and the fees associated with the closing. You can ask the seller to help pay part of the closing costs but they are not required to help. When I bought my current house at the price of $172K, I paid $6,000 for earnest money and then I paid closing fees of about $4,000. I did not have the seller pay any of my closing fees.
TJ: What should someone pay attention to when picking a lender?
TM: I suggest using a local lender you trust, i.e, Cendera Funding, Prime Lending, or Envoy Mortgage. These lenders are your neighbors and members of your community they see you as a neighbor not just a loan number and are easier for the parties to the transaction to work with, and you can always drive to their office if needed.
TJ: What does underwriter mean and will there always be one when buying a house?
TM: The underwriter is the person in the loan process that will actually verify all the information given to the lender in order to approve your loan. Any time you have a lender you will have an underwriter. They access your credit worthiness.
TJ: What is earnest money?
TM: Earnest money is usually 1-2% of the purchase price you are offering the seller and is paid with the contract offer to the seller to demonstrate that you are a committed buyer. Sellers often will not accept an contract offer without earnest money. Earnest money gets credited back to you during closing and is usually applied to your down payment and closing fees.
TJ: Who pays for the home inspection and survey?
TM: The buyer will pay for the home inspection which will typically run a couple hundred dollars. The survey can be provided by the seller or paid for by the buyer; it will just depend on what you negotiate in your contract. The survey for an average size residence is typically less than $1,000.
TJ: How do you find out what the utilities and taxes run on a house you are buying?
TM: In order to find out about the utilities you will need to ask the seller. Sellers will generally share this information with you. In order to find out about the taxes you can usually look online at your local tax office website: http://www.ectorcad.org/ and do a search by property address.
TJ: What is the one surprise that you may see when closing that the buyer wasn’t expecting?
TM: The surprise I see most often when closing is when underwriting takes longer than expected and the buyer is asked to submit additional information in order to complete the underwriting process. This will often delay the closing by a day or two. Often this can happen if a buyer goes out and makes a large purchase on credit between the time they received initial approval for the mortgage loan and the closing date. Your Realtor should advise you not to charge anything (furniture, a vehicle, etc.) until after your loan closes.
TJ: What are some things your realtor will want to see before working with you as a buyer?
TM: All you need to get started working with a Realtor is an idea of what your budget is and a signed buyer representation agreement. Your Realtor can help you find a lender and the lender will usually give you a pre-approval letter with the amount for which you are approved. To find local Realtors use the local Board of Realtors at Realtor.com.
Permian Basin Board of Realtors (Midland): www.usamls.net/permianbasin.
Odessa Board of Realtors (Odessa): www.odessarealtors.com/members.html
TJ: Where can someone contact you at if they are interested in purchasing a home in the Odessa-Midland area?
TM: Toni Morin
Keller Williams Realty Odessa/Midland