Don’t Buy a Home Until You Read This!

Looking to buy a home this year? If so, there’s a little bit of prep work involved. But don’t worry! We’re sharing a few home buying tips to help you get started.

Persons Banking Company spoke with Amanda Fiebig, the broker and owner of AF Realty Group in Perry, Georgia. She answered all of our questions about what you need to buy a home in 2021.

Keep reading for great home buying tips, including how much you should save, what documentation you’ll need, the ins and outs of the 2021 housing market, and more!

2021 Home buying Tips

How Much Should a Family Save Before Starting the Home Search?

Amanda said it all depends on your loan.

“Depending on your loan type it will require between 0-20 percent down, and then you have customary closing costs associated with financing a loan,” Amanda said.

For example, an FHA Loan requires a 3.5 percent down payment and closing costs are roughly 3 percent of the purchase price.

And, in addition to the loan, you will also need to pay for a home inspection ($300-$500) and the cost of an appraisal fee ($400-700).

For more information about mortgage loans at Persons Banking Company, click here.

Related: How to Save for Big Expenses

What Documentation Does a Family Need in Order to Buy a Home?

There is no shortage of paperwork in the home buying process! Here’s a list of the documentation you’ll likely need:

  • Pay stubs for each borrower from the last 30 Days
  • Bank statements (all pages for both checking and savings accounts)
  • A copy of your sales contract (if you’re already under contract)
  • Tax returns, including W-2’s for the past two years
  • The names and addresses of your employer(s) and landlord(s) for the past two years
  • Copy of your driver’s license or U.S. residency card
  • List of creditors to include your account numbers associated with the accounts, account balances, and the creditor(s) contact information

If you’re applying for a VA loan, you’ll also need a Statement of Service (DD-214). 

And if you’re self employed, you should gather your business tax returns or Schedule C on your personal tax returns for the last two years.

Lastly, if you are using income from child support or alimony, the lender will need a copy of your divorce decree or court order.

How Long Does It Typically Take to Purchase a Home?

Amanda said it’s vital to work with a loan officer to discuss options and the financial aspects of your loan.

“Many times buyers look for a home first before understanding what their budget is,” Amanda said. “ Sometimes buyers qualify to purchase a home for more than they are comfortable spending in their monthly budget, so having a great working relationship with your loan officer and your Realtor will ensure you have a successful experience.”

She said that when you negotiate a contract, your loan officer and realtor should work together to ensure you understand your financing and contractual obligations. 

“Always ask questions,” she said. “Ensure you understand before you agree to terms that could result in ultimately losing out on a home you love.”

For more information about mortgage loans at Persons Banking Company, click here.

The 2021 Housing Market

“The real estate market is moving very quickly at the moment,” Amanda said. “Our inventory levels are low, and with the amazingly low interest rates it has made the market very competitive.”

Since it’s a seller’s market, making competitive offers is crucial. 

Amanda also noted it’s not uncommon to make several offers before one is accepted.

“Be patient and work through the offer with your realtor,” she said. “It’s not uncommon in our market to offer over the list price and pay your own closing costs. Being prepared financially will set you apart from other buyers.”

More Home Buying Tips and Tricks

Amanda said a realtor can help you navigate the home buying process and can even help you purchase a home listed for sale by owner. 

She also offered these tips home buying tips

  • Be clear with your realtor about the type of home style you are looking for and your wants and needs
  • Be sure to look at homes within –not over– your budget.
  • Limit the demands in the offer–it’s a seller’s market.
  • Be willing to allow the seller temporary occupancy after closing if needed.
  • Offer shorter due diligence periods in your offer.

To Sum It Up

Buying a home can be an overwhelming process, so keep these things in mind:

  1. The amount you’ll need to save depends on your loan type.
  2. And, in addition to the loan, you will also need to pay for a home inspection ($300-$500) and the cost of an appraisal fee ($400-700).
  3. It takes between 30-45 to close on a home after the offer is accepted.
  4. Work with an experienced loan officer and realtor to ensure you understand the financial aspects of your loan.
  5. The 2021 Market is moving fast. In a seller’s market, be flexible and be prepared to make several offers and go above the asking price.

For more information about mortgage loans at Persons Banking Company, click here.

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