Investing in a home is a huge responsibility, but it’s also an exciting milestone in one’s life. It can even be a bit nerve-wracking, especially if it is your first time buying a home. Luckily, I'm here to answer any questions you may have. Whether this is your first time buying or if you are a seasoned expert in the home buying process, I'd be happy to answer any questions you may have so you are prepared for the journey you are about to embark on!
Frequently Asked Questions, Answered
Q. Where do I start?
A. Lucky for you, you have already started the process of finding your new home! By researching and gathering information, you are preparing yourself for what to expect. Additionally, you can familiarize yourself with your personal finances and educate yourself on the Chattanooga real estate market. Another great tip is to review real estate terminology so you understand the different steps of the process.
Another smart step would be to carefully review your budget, and try to eliminate any debt you may have to the best of your ability. You should also have a down payment and earnest money ready when you find a home and are prepared to make an offer.
Q. What do I need to think about before purchasing a home in Chattanooga?
A. It is always a good idea to review your finances no matter where you live. But if you are specifically looking in the area of Chattanooga, find a few neighborhoods that have qualities you are looking for. Once you have determined neighborhoods that match what is on your list of needs, it’s time to check the home prices in that neighborhood and review recently sold listings. Once you have done that, then you can decide if that area will fit your budget to ensure you are living within your means.
Q. What should I bring to my initial meeting with the mortgage lender?
A. In order to see how much you would qualify for a home loan, it is a good idea to meet with a lender early on—either in-person or virtually—to learn about the types of loans you may qualify for. In order to be prepared for this meeting, it is a good idea to bring calculations of your annual income, the amount of cash you have for a down payment, credit card balances, other loan balances (vehicles, student, etc.), and other factors that would affect your income (such as tax payments or dividends). Knowing these numbers will help you be prepared for the meeting and the process of buying a home.
Q. What does pre-qualify mean and do I need to pre-qualify for a home mortgage??
A. Pre-qualification simply means that you have spoken to a lender about a possible home loan. After providing the mortgage lender with your financial information, they will give you an estimate of how much you could qualify for should you choose to take out a home loan with them. This is also assuming the information is up to date and accurate. However, this does not necessarily mean that you are pre-approved to receive the loan when you’re ready to make an offer. At this point, they would not run a hard credit check or fully verify any of the information you have provided. There could be things that you forgot about that could pause the loan process. There could also be inaccuracies on your credit report that you were unaware of that could affect the terms of your loan.
It is normally a good idea to get pre-qualified prior to putting in an offer on a home. However, there is also the additional process of getting a pre-approval letter. Pre-qualification and pre-approval are often used interchangeably, but the main difference between the two is that pre-approval requires a hard credit check and is a more formal offer from a lender. Occasionally, sellers will require a pre-approval letter with your offer to purchase the home. A bonus is that it can make your purchasing offer stronger should you be in competition with other buyers.
Q. What can I expect to pay upfront for my home?
A. Before you get the keys to your home, you may wonder what you need to pay upfront. You can expect to pay for quite a few things when you purchase a home. Right off the bat, you will be responsible for the earnest money check, which is utilized as a security deposit to show the seller how serious you are about the home. After the offer is accepted, it is normally applied to the down payment or closing costs of the home.
The down payment is next. This is the amount of cash that you have readily available to pay for a portion of the home. Most buyers choose to put down 20% on the home, but there are options to put down as little as 0% if you have the right loan. There are certain stipulations that go along with lower down payments, so make sure you check with your agent or lender for more information.
Closing costs are the final aspect that you need to worry about prior to walking into your new home. These tend to be low for buyers and simply represent the fees for paperwork and however much the lender charges.
Q. There are so many home listings to be found online. Where do I start?
A. Have you been looking online now for what seems like forever? Check out my advanced home search tool to narrow your search of homes for sale that will be the best match for you in Chattanooga. If you would like to filter your search down even more, try looking through my featured listings or browsing specifically for homes within Chattanooga communities.
Q. I found a house perfect for me, now what?
A. Congratulations! One of the hardest parts of buying a home is finding one that will fit all of your needs. You’ve put in the hard work to get here, and now there are a few more steps to go through before you turn the keys into your new home.
First, you will need an earnest money check to accompany the offer you put in to purchase the home. Usually, 1% of the home’s sale price is an adequate amount. After your offer is put in, the seller has three options: they can choose to accept your offer, reject the offer, or make a counteroffer. After the initial written offer, it is common to have any additional negotiations done verbally between the two agents of each party.
Whenever an agreement is reached and the offer or counteroffer is accepted in writing, then you will have a binding contract for the sale of your new Chattanooga property. The earnest money will be deposited in the listing broker’s trust account to be held until after closing.
Have More Questions Regarding the Real Estate Process?
Have additional questions about purchasing a home in the Chattanooga area? Schedule a home buying consultation by contacting me at 423-756-2400. Together, we can review your needs and your budget to find you the perfect dream home.
As your Chattanooga home buying specialist, I will protect your interests and manage the details of the real estate transaction for your benefit to your fullest satisfaction. Ready to get started? Reach out to me today—I look forward to working with you!