Spruce Featured in Redfin Article for First-Time Homebuyers

We're absolutely delighted to be included in Redfin's latest article "Most Common Questions Asked by First Time Homebuyers." Check out the full article below with insights from our team and other industry professionals.

Buying a home is a big deal and can be an overwhelming and sometimes stressful experience, especially if you are a first-time homebuyer. In order to help you navigate the process, save money and avoid common mistakes we asked experts from Florida or Oregon to share the questions they are asked most commonly by first-time homebuyers and their answers to these questions.

What is the minimum down payment needed to purchase a home?

A minimum down payment is similar to the minimum credit score; it’s determined by the loan program you would qualify for and each one has their own requirements. Veterans and surviving spouses of members of the armed forces can take advantage of 100% financing which requires zero down payment. If you have a minimum of a 580 credit score, an FHA loan will allow for a 3% down payment. Finally, if you’re a first time home buyer with credit over 620, you may qualify for a conventional loan with as little as 3% down. -Evan DeLoach, Ocean Lending

How much can I afford to spend?

The amount you can afford to spend varies depending on your credit score and income, however, many mortgage companies offer a variety of special and unique programs that are suitable for borrowers of all walks of life and financial circumstances. With market rates where they are today, it is an excellent time to buy or even refinance your existing home. –Nationwide Mortgage Bankers

What happens if a home inspector uncovers a problem with the house?

First-time homebuyers are often at a loss for what to do when a major issue is found, and rightfully so since big issues with the home can present roadblocks to obtaining loans or insurance coverage. But smaller problems such as a leaking faucet or drywall damage also can be concerning to buyers. Most often, the buyer’s real estate agent will present a list of problems and their estimated repair costs to the seller’s agent, and they may decide to repair the damage or provide credits off the purchase price at closing. –Alto Home Inspection

What does a title company do?

Let’s pretend your offer has been accepted to purchase your first home, Congrats! You now need a title company to coordinate a settlement with you, the seller, the agents, and your lender.  A title company will process the contract which includes having the title to the property searched in land records and courts to determine if there are any issues which would prevent the seller from conveying insurable title to you. They will examine the title, prepare title commitments, coordinate all of the settlement costs and handle the signing of all loan documents, deeds, and other required legal documents, disburse all funds to the proper parties, pay off mortgages and liens, record deeds and deeds of trust in land records and issue title insurance policies. – Lakeside Title

Is having a home inspection performed necessary?

Our inspection company performed a case study by randomly sampling 50 of our past inspections. We added up the total value of repair items represented in the report. While older homes typically had a higher value of repair items and newer homes had less, the average repair cost found was $4,120.41! This is well above our inspection fee. Although it’s likely that not every repair item was fixed by the seller, that is a lot of potential savings for a home buyer. –Scott Home Inspection

Do I need title insurance?

Title insurance can be confusing for first-time homebuyers because there are actually two different types of policies: lender's and owner's. The answer is almost always yes when a lender is involved, as most banks require homebuyers to carry a lender’s policy to cover the loan amount. As for owner’s title insurance, which protects the homebuyer’s interest in the property (their equity), this policy is technically optional but the vast majority of people purchase it for added protection and peace of mind. –Spruce

What should be my biggest concern during the home inspection?  What causes the biggest problems in our area?

Water intrusion is arguably the biggest issue in western Washington, in fact, it is probably the biggest issue in most areas. That is why we are so thorough in checking the roof, attic, siding, foundation, basements and all interior walls for any water penetration issues, rot, water stains or damage. We even carry several specialty tools like moisture meters and infrared cameras that help us find any moisture issues that may be hidden in the walls or in the floors. These are especially helpful in finding water and drain leaks in the bathrooms and kitchen. –Move Smart Home Inspections

What is the difference between Replacement Cost and Actual Cash Value?

Replacement Cost means that the insurance company will pay for the full replacement cost of your items. Actual Cash Value means the insurance will pay a depreciated value for your items. –Pritchards And Associates

Would you buy this house?

This is a difficult question. Everyone’s wants and desires are a bit different in purchasing a home. Some people want a house to start in, some want a project in order to keep their initial cost down. All houses need maintenance. When it’s not kept up properly, the cost of maintenance rises. Our three most common answers are; this house is in need of some routine maintenance, if I was in the market for a house, and this was in my price range – I would consider it, and if you address the issues in the report and keep the maintenance up, this could be a great house. –Top Notch Home Inspection

Mold was discovered in my attic, is this a health issue or deal-breaker?

Mold in attics is actually very common and can be remediated. It’s usually not a health concern, however, it is expensive to repair and could come up again when the home is appraised or when you sell it. This is why mold in the attic is a frequently negotiated repair with Sellers. –All Islands Home Inspections

How do I know if an insurance company is a reputable one?

First-time home buyers are usually first-time insurance buyers as well. The process can be a bit daunting as well as expensive as the insurance payment usually represents 10% to 30% of your monthly mortgage amount. New home buyers want to make sure that the insurance carrier they choose can pay them in case of a hurricane or other claim. –GreatFlorida Insurance

What causes basements to leak?

Water is always present in the ground, although, sometimes it is quite deep. In our area, with heavy rain in the spring and summer or melting snow in winter, water is absorbed into the ground. Once the soil is saturated and can no longer absorb any more water, the water table begins to rise. As the water table rises under your home’s foundation, hydrostatic pressure develops. The water must find somewhere to go, and it often goes into your basement. –PPT Inspections

Originally posted here: https://www.redfin.com/blog/most-common-questions-asked-by-first-time-homebuyers/

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