The BIG Buyer FAQ

1. How long does the home buying process take?

Response:

The process varies, but here's a general timeline:

• Loan preapproval: 1--3 days
• Home search: 2--6 weeks (or more, depending on your needs)
• Offer to acceptance: 1--3 days
• Inspection & appraisal: 7--14 days
• Loan underwriting: 2--3 weeks
• Closing & possession: 30-45 days total from mutual acceptance

Altogether, expect about 30--60 days once you're under contract.

2. How much money do I need to buy a house?

Response:

Typical costs include:

• Down payment: Ranges from 0% (VA/USDA) to 3--5% (conventional) to 20% or more
• Closing costs: Around 2--5% of the purchase price
• Earnest money: Usually 1 3% upfront, applied toward closing
• Inspections & appraisals: ~$400--$500
• Appraisal: ~$900--$1300
• Moving expenses and reserves: Varies by household

Typical down payment options include:

• 3% for first-time buyer programs
• 3.5% for FHA loans
• 5--10% for conventional loans
• 0% for VA or USDA loans

3. How do I know when I'm ready to buy?

Response:

Here are a few signs you're ready to move forward:

• You have a steady income and job history
• You ve saved for a down payment and closing costs
• You ve checked your credit and improved it if needed
• You re preapproved with a lender
• You know your desired location and budget
• You re emotionally prepared for the responsibility of ownership

4. What's the first step to buying a home?

Response:

Start with a loan preapproval. This tells you:

• How much you can borrow
• What your monthly payment will be
• What kind of loan program fits your needs

Your lender will check:

• Income and job history
• Credit score and debt load
• Bank statements and tax returns

Once preapproved, we ll match you with homes in your price range and preferred location.

5. What's the difference between prequalified and preapproved?

Response:

No, and the difference matters.

• Prequalification is a quick estimate based on self-reported financial information. It gives you a rough idea of your price range but doesn t carry weight with sellers.
• Preapproval is a verified step that includes credit checks and income documentation. It shows sellers you re a serious, qualified buyer.

Bottom line: Preapproval is stronger and usually required when making an offer.

6. Do I need to sell my current home before buying a new one?

Response:

It depends on your finances and the market.

If you need the equity from your current home to buy:

• You ll likely need to sell first or make your new purchase contingent on that sale.

If you can afford to buy first:

• You gain flexibility and avoid moving twice, but you ll carry two mortgages temporarily.

There are also options like bridge loans or leasebacks. Let's review your situation and make a custom plan.

7. How much can I afford?

Response:

This depends on:

• Your income and monthly debts
• Down payment amount
• Credit score and interest rate
• Property taxes, insurance, and HOA dues

A lender will run these numbers and help determine your max budget. But also ask yourself:
What payment am I comfortable with?
It s smart to shop below your max approval to leave room for future expenses.

8. How do I choose the right real estate agent?

Response:

The right agent should be someone you trust, who understands your needs, and who knows your local market. Look for:

• Experience in the neighborhoods you re targeting
• Strong communication skills and responsiveness
• Positive reviews or referrals from past clients
• A full-time commitment to real estate
• A willingness to educate you, not pressure you

Interview at least one or two before deciding. You'll be spending a lot of time with this person make sure it's a good fit.

9. What credit score do I need to buy a home?

Response:

While requirements vary by loan type, here are general benchmarks:

• 580+ for FHA loans (with 3.5% down)
• 620+ for most conventional loans
• 740+ to qualify for the best interest rates

If your score is below 580, you may still qualify with a larger down payment or by using a nontraditional loan product but you'll want to work with a lender to improve your credit first.

10. What happens at closing?

Response:

Closing is the final step in the buying process when ownership officially transfers to you.

Here s what to expect:

• You ll sign loan documents, title paperwork, and settlement statements
• You ll bring a valid photo ID
• Funds for closing must be wired securely in advance to escrow
• Your lender will fund the loan once all conditions are met
• The title company will record the deed with the county

Once recorded, you re officially the new owner and keys can be released!

11. What's included in closing costs?

Response:

Closing costs typically total 2--5% of the purchase price and may include:

• Loan origination fees
• Appraisal fee
• Credit report and underwriting fees
• Title insurance and escrow fees
• Prepaid property taxes and homeowner s insurance
• Recording and notary charges
• HOA transfer fees (if applicable)

You ll receive a detailed breakdown in your Loan Estimate and again in your Closing Disclosure three days before signing.

12. Do I need a home inspection?

Response:

Yes absolutely. A home inspection helps uncover potential problems before you buy. It gives you:

• A detailed look at the home's condition
• Leverage to ask for repairs or credits
• Peace of mind about hidden issues

Even new construction homes benefit from inspections. Skipping one to save time or money can backfire in costly ways.

13. What if the inspection finds problems?

Response:

If issues are found, you typically have a few options:

• Request repairs from the seller
• Ask for a credit toward closing costs
• Renegotiate the price
• Walk away if the problems are too severe and can t be resolved

Most inspections uncover minor issues. We ll guide you on which ones are worth addressing and how to handle negotiations.

14. What's the difference between an appraisal and an inspection?

Response:

They serve very different purposes:

• A home inspection protects the buyer by identifying physical defects or safety issues.
• An appraisal protects the lender by confirming the home's market value before issuing a loan.

Inspections are optional (but highly recommended).
Appraisals are usually required by lenders.

15. What is earnest money, and do I get it back?

Response:

Earnest money is a good faith deposit you submit with your offer typically 1--3% of the purchase price. It shows the seller you're serious.

It s held by a neutral third party (escrow) and later applied to your:

• Down payment
• Or closing costs

You usually get it back if:

• The deal falls through for a reason allowed in your contract (like financing or inspection contingency)

You might forfeit it if:

• You back out without cause or miss contract deadlines

16. What is a contingency?

Response:

A contingency is a condition that must be met for the sale to proceed. Common contingencies include:

• Financing contingency: You re approved for your loan
• Inspection contingency: You approve the home s condition
• Appraisal contingency: The home appraises at or above the purchase price
• Sale of buyer s home: You sell your current property before closing

If a contingency isn t met, you can typically walk away without losing your earnest money.

17. What's a home warranty, and should I get one?

Response:

A home warranty is a service contract that covers repair or replacement of major systems and appliances, such as:

• HVAC
• Electrical and plumbing systems
• Kitchen appliances
• Water heater

It s different from homeowners insurance. Warranties usually cost $400--$900 per year.

Some sellers include one as part of the deal, or you can buy one yourself. It s especially helpful with older homes or if you re new to homeownership.

18. What s included in a mortgage payment?

Response:

Most monthly mortgage payments include four components often called PITI:

• Principal: Repayment of your loan amount
• Interest: Lender's fee for the loan
• Taxes: Property taxes, usually collected monthly and paid by your lender
• Insurance: Homeowners insurance (and sometimes mortgage insurance too)

If your loan requires mortgage insurance, that may be included until you reach 20% equity.

19. What is mortgage insurance, and do I need it?

Response:

Mortgage insurance protects the lender not you if you default on your loan. It s typically required if:

• You put less than 20% down on a conventional loan
• You use an FHA loan (in which case, it s called MIP)

Types of mortgage insurance:

• PMI (Private Mortgage Insurance): For conventional loans
• MIP (Mortgage Insurance Premium): For FHA loans

You can usually remove PMI once you reach 20--22% equity. FHA loans may require refinancing to eliminate MIP.

20. What's the difference between fixed-rate and adjustable-rate mortgages?

Response:

• A fixed-rate mortgage locks in your interest rate for the life of the loan (usually 15 or 30 years). Your monthly payment stays the same.
• An adjustable-rate mortgage (ARM) starts with a lower rate for a set period (like 5, 7, or 10 years), then adjusts annually based on market rates.

Fixed-rate = stability
ARM = potential savings upfront, more risk later

We ll help you compare based on your plans, risk tolerance, and budget.

21. What are property taxes, and how are they paid?

Response:

Property taxes are local taxes based on the assessed value of your home. They help fund schools, roads, and public services.

You ll usually pay them:

• Monthly as part of your mortgage payment (your lender holds the funds in escrow)
• Or directly to the county if you own your home free and clear

Rates vary by location and can increase over time. Your lender will estimate them for budgeting purposes.

22. What's a homeowners association (HOA), and should I avoid one?

Response:

An HOA is an organization that manages and enforces rules in certain residential communities. If you buy in one, you ll pay monthly or annual dues.

HOAs often cover:

• Exterior maintenance
• Landscaping and snow removal
• Community amenities (pool, gym, clubhouse)

They also enforce rules on:

• Home appearance
• Parking
• Noise
• Rentals or pets

Pros: Convenience, curb appeal, amenities
Cons: Extra costs, restrictions, enforcement

Whether to avoid one depends on your lifestyle and priorities.

23. What's the difference between a condo and a house?

Response:

Condos are individually owned units within a larger building or complex. You own the inside of your unit but share walls, roofs, and land with others.

Houses (single-family homes) give you ownership of the building and the land it sits on.

Key differences:

• Condos usually have lower purchase prices but higher HOA dues
• Houses offer more privacy and control but require more maintenance
• Financing can be trickier for condos in some buildings

Both can be great choices depending on your goals and budget.

24. Can I buy a home with student loan debt?

Response:

Yes. Student loans don t automatically disqualify you what matters is your debt-to-income ratio (DTI).

Lenders look at your monthly debts (including loans, credit cards, car payments) compared to your monthly income. A typical DTI limit is 43% or less, though this varies by loan program.

Tips if you have student loans:

• Make consistent payments
• Lower other debts if possible
• Get preapproved to see where you stand

We can help you work with lenders who understand your situation.

25. Should I buy now or wait?

Response:

It depends on your financial readiness, life plans, and local market conditions not just interest rates or headlines.

Buy now if:

• You re financially prepared
• You plan to stay at least 3--5 years
• You find a home that fits your needs and budget

Wait if:

• You need to build savings or credit
• You re uncertain about your location or job stability
• You re in a highly competitive market and prefer more time

We ll help you evaluate your unique timing there s no one-size-fits-all answer.

26. What is an escrow account?

Response:

An escrow account is a neutral third-party account used to manage money during and after a home purchase.

There are two main uses:

1. During the transaction: Escrow holds your earnest money and later disburses funds to the appropriate parties (seller, agents, lender, etc.) when the sale closes.
2. After closing (for many loans): Lenders use an escrow account to collect and pay your property taxes and homeowners insurance each year, so you don t have to pay large lump sums.

Your monthly mortgage payment may include escrow contributions.

27. What is title insurance, and do I need it?

Response:

Yes, you do title insurance protects your ownership rights.

There are two types:

• Lender s title insurance: Required by your mortgage lender to protect their interest in the property
• Owner s title insurance: Optional but highly recommended to protect you from claims, errors, or legal issues involving past ownership, liens, or mistakes in public records

It s a one-time cost at closing, not a monthly payment.

28. Can I back out after making an offer?

Response:

Yes, but only under certain conditions and how you structured your offer matters.

You can usually cancel without penalty if:

• Your inspection contingency reveals issues
• Your financing contingency falls through
• The appraisal comes in low and the seller won t adjust

But if you back out for a reason not covered by a contingency, you may lose your earnest money.

We ll make sure your contract protects your interests while still being competitive.

29. Can I buy a house without a realtor?

Response:

Technically yes but it s rarely advisable.

The seller typically pays the buyer agent s commission, so using a real estate agent usually costs you nothing out of pocket.

A buyer s agent will:

• Help you find the right home
• Write and negotiate your offer
• Coordinate inspections, appraisals, and closing
• Protect your interests through the entire process

Going it alone means you re negotiating directly with the seller's agent who represents them, not you.

30. What are my options if I m buying and selling at the same time?

Response:

You ve got a few common strategies:

• Sell first, then buy: Safer financially but may require temporary housing
• Buy first, then sell: More convenient, but may require bridge financing or the ability to carry two mortgages
• Contingent offer: Buy a home only if your current one sells (less attractive to some sellers)
• Leaseback: Sell your home, then rent it from the new owner for a few weeks while you move into your new one

We ll help you choose the right timing based on your goals and financial situation.

31. Can I buy a home as a self-employed person?

Response:

Yes, but the documentation requirements are stricter.

Lenders will typically ask for:

• Two years of personal and business tax returns
• Profit and loss statements
• Bank statements
• A stable or increasing income trend

It s helpful to:

• Keep good financial records
• Reduce unnecessary deductions (they lower your reported income)
• Work with a lender experienced in self-employed borrowers

Preapproval may take a bit longer but it's absolutely doable.

32. Can I buy with a friend, parent, or partner?

Response:

Yes many buyers team up to increase buying power. You can:

• Co-sign: One person helps qualify for the loan but doesn t live there
• Co-own: Multiple people are on the title and loan

Be sure to:

• Decide how you ll split expenses, maintenance, and future equity
• Draft a written agreement (especially if unmarried or not relatives)
• Understand how ownership will be titled (joint tenancy, tenants in common, etc.)

It's a great option if everyone s clear on the plan.

33. How many homes should I look at before buying?

Response:

There's no magic number some buyers find the one right away, others look at 20+ homes.

What matters is:

• You understand what s available in your price range
• You feel confident in your decision
• You re comparing options rather than reacting emotionally

Tip: If a home checks your key boxes and feels right don t wait. The best homes move fast, and indecision can cost you.

34. Should I waive my inspection to get my offer accepted?

Response:

Only as a last resort and never without understanding the risks.

Waiving your inspection removes your right to renegotiate or walk away if serious issues are discovered.

Alternatives:

• Do a pre-inspection before making your offer
• Include an informational-only inspection (you won t ask for repairs but can still back out)
• Shorten the inspection timeline to stay competitive

In hot markets, we ll help you craft smart, strategic offers without exposing you to big surprises.

35. What happens if the appraisal comes in low?

Response:

If the home appraises for less than your offer, your lender may reduce the loan amount.

Options include:

• Renegotiating the price with the seller
• Paying the difference out of pocket
• Walking away if you have an appraisal contingency
• Disputing the appraisal (rare, but possible with strong evidence)

Appraisal gaps are more common in fast-moving markets. We ll guide you on how to respond if this happens.

36. What's a backup offer, and should I make one?

Response:

A backup offer is a legally binding offer submitted after a seller has already accepted another one. If the first deal falls through, yours moves into first position.

Why consider it?

• No risk of bidding wars
• You re first in line if the current buyer backs out
• You can continue shopping in the meantime

It s a smart strategy in competitive markets just make sure you re still emotionally detached until it becomes active.

37. What are lender-required repairs?

Response:

These are repairs that a lender may require (in the appraisal) before funding the loan especially with FHA, VA, or USDA loans.

Common examples:

• Roof issues or leaks
• Missing handrails or exposed wiring
• Peeling paint on homes built before 1978
• Broken windows or safety hazards
• Plumbing, electrical, or heating systems not working

We ll help identify potential red flags early and negotiate with the seller to address them before closing.

38. What's an appraisal gap and how do I cover it?

Response:

An appraisal gap happens when the appraised value is lower than your offer price.

If that happens:

• The lender will base the loan on the lower appraised value
• You may need to bring extra cash to cover the difference
• You can also try to renegotiate the price or use gap coverage language in your offer

Tip: We ll help you prepare for this possibility and structure your offer to protect you financially.

39. What's the difference between a buyer s market and a seller's market?

Response:

• A buyer s market means more homes for sale than buyers leading to lower prices, longer market times, and more negotiation power for you.
• A seller s market means fewer listings and more demand creating bidding wars, faster sales, and upward price pressure.

We monitor the market closely to help you adjust your strategy based on current conditions in your area.

40. Do I need to attend the closing in person?

Response:

Not always. Many closings today allow for:

• Remote signings via mobile notaries (This is new, and not common yet)
• Electronic signing (e-closing) for most documents
• Mail-away closings if you re out of town

Your location, lender, and title company all factor into the method. We ll coordinate the closing format that fits your situation and make sure everything goes smoothly.

41. What is a final walk-through, and why does it matter?

Response:

The final walk-through happens shortly before closing usually within 24 to 72 hours.

Its purpose is to confirm:

• The home is in the same condition as when you made your offer
• Any agreed-upon repairs have been completed
• No new damage has occurred
• The seller has removed all personal belongings (unless negotiated otherwise)

It s not another inspection it s your last chance to verify the home's condition before signing.

42. Can I negotiate after the inspection?

Response:
Yes and it's common to do so.

If the inspection reveals issues, you can:

• Request repairs
• Ask for a price reduction
• Request a credit toward closing costs
• Walk away if the problems are serious and not resolved

We'll guide you on which repairs are reasonable to request and how to approach negotiations without jeopardizing your deal.

43. Should I buy a fixer-upper?

Response:

It can be a great opportunity but only if you're prepared.

Pros:

• Lower upfront price
• Potential for increased equity
• Ability to customize

Cons:

• Renovation costs can be unpredictable
• Financing may be harder
• Projects take time and patience

We can help evaluate whether the home is financeable as-is or would require special rehab loans. Always get a thorough inspection.

44. Can I use gift money for my down payment?

Response:

Yes most loan programs allow it, especially for first-time buyers.

Rules include:

• The gift must come from a family member or approved donor
• You may need a gift letter stating the money isn t a loan
• The lender may require proof of the transfer (like bank statements)

We ll help ensure the documentation is done correctly so it doesn't delay your loan approval.

45. How do I compete with all-cash buyers?

Response:

All-cash offers are strong but they're not unbeatable.

Ways to compete:

• Get fully underwritten upfront (not just preapproved)
• Offer a faster closing timeline
• Limit or waive non-essential contingencies (while still protecting yourself)
• Use an appraisal gap strategy
• Write a clean, well-structured offer with strong earnest money
• Include a personal letter if appropriate

We ll help you present a competitive offer without taking unnecessary risks.

46. Should I buy new construction or a resale home?

Response:

It depends on your budget, timeline, and priorities.

New construction pros:

• Brand-new systems and appliances
• Customizable finishes and layouts
• Fewer immediate repairs or maintenance
• Modern features and energy efficiency

Cons:

• May cost more per square foot
• Can take months to complete
• Landscaping and neighborhood may still be under development
• Less room to negotiate on price

Resale homes often offer more character, established neighborhoods, and quicker closings. We ll help you weigh the pros and cons for your situation.

47. What are closing disclosures?

Response:

The Closing Disclosure (CD) is a federally required document that your lender must provide at least three business days before closing.

It includes:

• Final loan terms
• Monthly payments
• Total closing costs
• Amount due at signing

Compare it carefully with your earlier Loan Estimate and alert your lender if anything looks off. We ll also review it with you to ensure clarity and accuracy.

48. What is a rate lock, and when should I do it?

Response:

A rate lock secures your interest rate for a set time usually 30 to 60 days while your loan is processed.

Benefits:

• Protects you from rising rates
• Lets you plan your monthly payment with confidence

You should typically lock after:

• Your offer is accepted
• You ve chosen a lender and loan program
• You re within the expected closing timeline

Ask your lender if float-down options are available in case rates drop.

49. Can I change lenders during the process?

Response:

Yes but it can delay your closing and cost you money if not handled carefully. If the terms of your loan change to something other than what was disclosed in your purchase agreement, the seller will have to agree to the changes in writing.

Reasons people switch:

• Lower rate elsewhere
• Poor service
• Loan denial or unfavorable terms

Before switching:

• Compare costs and timelines carefully
• Make sure your new lender can meet your closing date
• Notify all parties ASAP

We'll help you weigh the risks and benefits based on where you are in the transaction.

50. What happens if my financing falls through?

Response:

If your financing falls through before closing, your options depend on your purchase agreement.

If you included a financing contingency, you can usually:

• Cancel the deal
• Receive your earnest money back
• Walk away without penalty

If you waived that protection, you may lose your earnest money or face legal risk.

We always recommend structuring your offer to protect against loan issues even if your approval seems solid.