Buying a Home in the Raleigh, NC Area
If you've been thinking of buying a home in Raleigh, you may have a few questions about the home-buying process. And this is totally okay! It's always a good idea to brush up on your real estate knowledge—whether you're a first-time home buyer or an experienced real estate investor. After all, you want to be an informed buyer who can make sound financial decisions! So it's time to start reading. Take a look at some of the most frequent questions we hear from Raleigh home buyers. Not finding answers to your questions? Don't hesitate to give us a call!
So... where should I start the process?
A good place to start is by organizing your finances to determine how much you spend... and how much you might be able to pay per month on a mortgage. Use my handy Mortgage Calculator to get an idea of what that payment might look like for you based on different home prices.
It might also be a good idea to start exploring the communities around the Triangle to get an idea of the styles and prices of homes in the area, as well as their amenities and their commute times to your work.
How do I know what to look for in a home?
It's important to take some time to really think about what you want and need in a home—and to distinguish between those WANTS and NEEDS. Chances are, you're not going to find the perfect home that has all your dream features, so you've got to know which amenities or factors are deal-breakers, and which you can live without.
You might want to start by browsing homes for sale in your preferred area or areas to get an idea of what type of homes you might find... and how much they'll cost.
Why should I use a real estate agent?
As a buyer, there's absolutely no reason NOT to use an agent—since you do not pay for it! That's right: the seller, not the buyer, pays the commission for BOTH agents involved in the process. So as a buyer, you've got nothing to lose, and a wealth of knowledge, expertise, and experience to gain!
For example, a real estate agent can tell you whether a particular home is a sound investment—or overpriced. A good agent can guide you towards the right neighborhoods for your budget and needs. They can also walk you through the legal jargon AND handle all the paperwork for you. An agent can make recommendations for local lenders and home inspectors. They can help you find a comfortable price range. They can tell you whether a home satisfactorily meets your needs and wants... the list goes on!
In short, the advice and services of a good agent are invaluable!
Where and how can I get a loan?
There are a number of places to find a loan. Banks, credit unions, and private mortgage companies are all common options. It's a good idea to get some recommendations—another way a good Realtor can come in handy!—to find some qualified and reputable lenders in your area. You may also want to call the banks or credit unions you bank with, as they may be able to offer you special rates as an existing client. Local lenders, however, may know of special state or city government programs you qualify for.
No matter where you decide to look, you definitely want to make some calls and speak with a few lenders before making any decisions. That way you can review your loan options, plus compare fees and benefits of different lenders.
What if I have bad credit or no down payment?
No worries! You've actually still got plenty of options. For example, the Federal Housing Administration (FHA) helps buyers by offering insured loans available to buyers of lower income or with low credit scores. There are many other programs available through various government programs, including the Department of Housing and Urban Development (HUD) and the US Department of Agriculture. Many state and local governments offer their own specific programs targeted to buyers of various income levels or with low or no down payments.
If you're an active or veteran member of the armed forces, you most likely qualify for the VA Loan, which is a GREAT option for military home buyers. Not only are there lower credit standards and qualifications, you may be eligible for as little as a 0% down payment!
What will I pay upfront to buy a home?
The biggest payment you'll make is (most likely) the down payment. Depending on the type of loan you choose, this could range from about 3% to 20%. So for a $200,000 home, that would be $6,000 to $40,000. However, there are few other costs associated with home buying.
Closing costs are typically low for the buyer and are comprised of various fees associated with paperwork and lender charges. This includes things like title fees, home appraisal fees, home inspection fees, lender and attorney fees, and more. You can expect these to add a few thousand dollars to your final closing fees—which will include your down payment and all associated fees.
What other costs are there to home ownership?
So, you've got your monthly mortgage. Your down payment and closing costs. What else can you expect to pay when you buy a home?
Well, there are some standard regular monthly charges, like your homeowners insurance and property taxes (both of which get bundled into your monthly mortgage payments). Then theres the interest you'll pay on the money you borrowed from your lender. This, too, is bundled into your mortgage payments.
Then, of course, there are a few variable costs, like utilities or any needed maintenance and upgrades. Depending on the neighborhood you choose, you may also pay HOA dues for maintenance of common areas like parks or pools. If you live in a condo, you'll likely pay condo association fees. Not sure if your neighborhood has an HOA? Ask that handy Realtor of yours!