Frequently Asked Questions
I cover Hunterdon, Morris, Somerset and Warren Counties. I specialize in Hunterdon County properties.
Getting pre-approved for a mortgage is the first step of the home-buying process. Getting a pre-approval letter from a lender gets the ball rolling in the right direction.
From start (searching on-line) to finish (closing), buying a home takes about 10-12 weeks. Once a home is selected and an offer is accepted, the average time to complete contract to close is 45-60 days (under normal market conditions). Though, well-prepared home buyers who pay cash have been known to purchase properties faster than that.
In seller's markets, increasing demand for home drives up prices. Here are some of the drivers of demand:
- economic factors
- lower interest rates
- low inventory
A buyer's market is characterized by declining home prices and reduced demand. Several factors may affect long-term and short-term buyer demand, like:
- economic disruption
- higher interest rates
- high inventory
- natural disasters
Most loan programs require a FICO score of 650 or better. Borrowers with higher credit scores represent less risk to the lender, often resulting in a lower down payment requirement and better interest rate. Conversely, home shoppers with lower credit scores may need to bring more money to the table (or accept a higher interest rate) to offset the lender's risk.
While the broad down payment average is 11%, first time homebuyers usually only put down 3 to 5% on a home. That’s because several first-time home buyer programs don’t require big down payments. A longtime favorite, the FHA loan, requires 3.5% down. What’s more, some programs allow down payment contributions from family members in the form of a gift.
Some programs require even less. VA loans and USDA loans can be made with zero down. However, these programs are more restrictive. VA loans are only made to former or current military servicemembers. USDA loans are only available to low to-middle income buyers in USDA-eligible rural areas