Buyer's 10 most Frequently Asked Questions

Feel free to call us with your own!

Purchasing property can be a really exciting and intimidating at the same time, especially if its your first time.  We truly appreciate that! 

What is the first step in the home buying process?

ANSWER: Getting pre-approved by a lender. Even before you start looking for a property to call home, you must talk to a lender or two, to learn about how much of a loan you qualify for.  See FIRST STEP

What kind of credit score do I need?

ANSWER: You need a minimum credit score of 620+ in most cases. The lower your credit score is, the higher the interest rate and terms.  Buyers with credit scores of 740 or better, get the best rates.  Regardless of your score, we can guide you to secure a loan with a lender..

"Always keep in mind that your own resolution to succeed is more

important than any other." 

 -Abraham Lincoln

What kind of documentation do I need to get Pre-Approved for a Mortgage Loan?

ANSWER: Most lenders will ask you for- 1 month’s worth of pay stubs, 2 months of bank statements and two years of tax returns. Some lenders may have additional requirements and may ask for additional documentation.

How much of a downpayment do I need?

ANSWER: It depends on the loan type you qualify for with a lender. Most buyers with a good credit score, may put down as little as 3%-5% on a conventional 30 year loan. FHA qualifying buyers only need 3.5% for a downpayment, while VA loan buyers can purchase with a 0% downpayment.

Are there first time Buyer Assistance Programs that help with the down-payment?

ANSWER: Yes!  There are local, state and federal programs that help

first time buyers with the downpayment on their purchase.  We really like the Housing Urban Development (HUD) first time buyer assistance assistance programs, which empower buyers with in-depth knowledge of the process.   https://www.hud.gov/states/florida/homeownership/buyingprgms

Miami-Dade and Broward Counties also have excellent programs for first time buyers.  To learn more, visit  the following links below for the county of your choice.

https://www8.miamidade.gov/global/housing/affordable-homeownership-program.page

http://www.broward.org/Housing/Pages/Homebuyer.aspx

Every step of the way, we are here to help you purchase, a place to call home!

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Buyer FAQ- 1

JESUS M. FERNANDEZ, REALTOR & PUBLISHER

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What are closing costs and how much are they?

ANSWER: Closing costs are items you pay for besides the downpayment. They can be as little as 2% to 5% of the purchase price. They include the lender's origination fee or loan underwriting fee, credit report, appraisal, property survey, tax service fee, the lender's title insurance policy, the owner's title insurance policy, recording fee, state tax/tax stamp, intangible tax, pre-pay interest, tax escrow and insurance escrow.  Your total closing costs will depend on various factors.

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Buyer FAQ- 3
What is Private Homeowner's Insurance (PMI) and what does it cost?

ANSWER:  PMI is insurance that protects the lender in case you default on your loan. With conventional loans, mortgage insurance is generally not required if you make a down payment of 20% or more of the home's purchase price. PMI costs between 0.5% to 1% of the entire loan amount on an annual basis. Assuming a 1% PMI fee, on a $200,000 loan, this means the borrower could be paying as much as $2,000 a year, or $166.66 per month in PMI.

What is escrow and how does it work?

ANSWER: Escrow is technically an transactional account, in which a third party controls the disbursement of funds you place in "escrow" by agreement. In real estate, the escrow account is used to place the buyer's good-faith deposit, when a purchase offer is made.  The escrow agent can be a title company, an attorney or real estate company; the funds are held "in escrow" until closing, or may be returned to the buyer, if no transaction takes place. The lender may also act as an escrow agent, collecting escrow deposits throughout the year, to pay your taxes and homeowner's insurance. 

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What does a REALTOR®️ do for a Buyer like me?

ANSWER: A professional Realtor will successfully guide you through the multi-step purchasing process, from finding to purchasing a property.   A Realtor has the training that will help you with more than just finding and purchasing a property. He/She will help you understand the entire purchasing process, your financing options and can even estimate your monthly payments. Realtors study the local market and will help you understand current market conditions, so you can make a winning offer. After your offer has been accepted, a Realtor will help you stay on top of your contractual obligations, and communicate with you regularly, as well with all pertinent parties to the transaction; like your lender, the title agent and the seller or seller's agent, all the way to the closing date. It is the duty of every Realtor, to abide by the Realtor's Code of Ethics, which seeks to first and foremost to protect the public's interest and deal fairly and honestly with all parties in a transaction, and protect the public against fraud, misrepresentation, or unethical practices in connection with real estate transactions. 

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Buyer FAQ- 5
What do you charge as a REALTOR®️ for services?

ANSWER: We do not charge Buyers any type of brokerage fee for representing them in a transaction. However like most, if not all, Real Estate Brokerage Firms we charge a nominal Administrative Processing Fee. Morris Williams Realty, Inc. (MWR)  Administrative Processing Fee, is processed through American Compliance & Transaction Processing, who will collect a $250.00 Administrative Processing Fee from Buyer(s) and/or Seller(s) at closing, or from the party or parties MWR is representing.

We realize that perhaps you may have more questions, which are unique to you and your personal buying or selling situation.  Please feel free to call us and let us know about your personal purchasing objective. We are sure that we can answer any of your real estate related questions and help you achieve your goals.

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DEFINITIONS 

Pre-Approval Letter-  After a lender reviews your credit, debts, bank statements and annual income, you will be given a letter by the lender, stating that you are "pre-approved" for a loan. The letter will specify amount and type of loan on the letter.  This letter will accompany any offer you submit to a seller, which the seller will then use, to determine your purchasing qualifications.

Private Mortgage Insurance or PMI-  Lenders may require you to pay this type of mortgage insurance, when you purchase with a downpayment of less than 20% of the purchase price.  It protects the lender, not you, in case you default on the loan. 

Mortgage Points or Discount Points-

Points are fees paid directly to the lender at closing.  To buy down the interest rate on your loan, you can pay additional points.  One point costs 1% of your mortgage amount. The more points you pay, the lower your interest rate, over the life of the loan. This makes sense, if you will live in your new home a long period of time.

FICO Score-

The acronym stands for the Fair Issac Corporation, which developed a credit scoring system, to help creditors determine the amount of risk they will be exposed to, when lending money or providing credit to consumers. The credit score range is between 300 and 850.  Credit scores between 320 and 700 are considered marginal. Scores above 700 are considered good and scores 800 or above are considered excellent.

Pre-Payment Penalty-

A pre-payment penalty, also known as a pre-pay in the lending industry, is an agreement between the borrower and the lender, which regulates when a borrower is allowed to pay-off the loan and when.  If the borrower pays off the loan earlier than the agreed to term, the borrower must pay a penalty.

Estoppel Letter-

The estoppel letter or estoppel certificate, is a legal document provided by the seller's Homeowner's or Condominium Owner's Association, outlining the current owner's financial standing, past due balances, current fees due and lists all future special assessments due.

Buyer's Market-

Is the result of economic conditions, when there are more properties available for sale, than buyers seeking to purchase. This market condition favors buyers.

Seller's Market-

Is defined when the demand for properties by potential buyers exceeds the amount of properties available for purchase.  this market condition favors the seller.

Documentary Stamp Taxes-

When real estate is transferred in Florida, from one person to another, this transfer tax must be paid to the recording office in the county where the property is located. All counties in Florida, except in Miami-Dade, the stamp tax rate is $.70 per $100 paid for the property.  In Miami-Dade the rate is $0.60 per $100 for a single family residences.  The documentary stamp tax on a $400,000 home would equal to $2,400. ($0.60 x 4000= $2,400)

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Buyer FAQ- 8
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Buyer FAQ- 9
 
 
 
 
 
 
 
 
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One Home is all we need!  And when you help someone find theirs, it's magic!
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Call us for a private consultation, about your personal purchasing situation.

786-553-7530

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ABOUT THE INFORMATION ON THIS WEB PAGE

You are making an important financial decision, which requires a comprehensive understanding of your personal financial situation. Buying or selling real estate is a very serious business and we understand that.  We will consult you and guide you, to make your sale or purchase a total success.  This website can help you get started, but it just can't answer all your questions, like a seasoned REALTOR®️ can! Call us!  We are here to help you get the most from your sale or purchase.

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