Buying Your First House: Frequently Asked Questions
- Why buy a house instead of renting?
- What kinds of houses does HomeVestors sell?
- How much can I afford to spend on a house?
- How much money will I have to come up with in order to buy a house?
- What expenses are included in a mortgage payment?
- What kinds of financing programs do you offer?
- How does the process work?
- Once I find a house to buy, how quickly can I expect to move?
- If I talk to a HomeVestors representative, or view a HomeVestors house, am I obligated to HomeVestors in any way?
- Why buy from HomeVestors?
Q. Why buy a house instead of renting?
A. You might be thinking that a monthly payment is a monthly payment, whether you’re renting or buying. Either way, you’re spending money, right? Wrong!
When you pay rent, you’re basically paying for a service – the service of a landlord who puts a roof over your head and keeps that roof in good repair. When you move out, you leave that roof behind. You have nothing more than what you moved in with.
But when you buy a home, you’re not losing the money you pay each month. A home is an investment; so with each payment, you’re building equity in an asset. In addition, when you buy a house, you may be able to deduct from your federal income taxes both the cost of your mortgage loan interest and your property taxes – a nice little side benefit that can save you quite a bit of money.
Plus, you get to enjoy the one benefit you can only experience when you purchase a house – the realization of the American Dream to own your very own home.
If you’re interested in selling your home, it’s important to know that the thing most of the people selling their houses to HomeVestors franchisees have in common is the need to sell quickly to a reputable home buyer who can ensure a fast, hassle free closing and all cash sale.
Q. What kinds of houses does HomeVestors sell?
A. HomeVestors homes are typically pre-owned, in established neighborhoods. While many of the homes we have for sale were in disrepair when purchased, our franchisees put a lot of work into them, turning them into lovely homes that are move-in ready. And if you like the idea of buying a fixer-upper that you can craft into the home of your dreams, we have those for sale as well.
One of the advantages of buying a HomeVestors home is the peace of mind that comes from knowing your home has been checked from top to bottom. If the home has been rehabbed, the franchisee will tell you exactly what repairs were made, which fixtures or appliances are new and which are original to the home. If you’re buying “as is,” the franchisee can tell you what problems he has discovered while repairing the house. He may even be able to provide recommendations for reputable contractors who can help you with your repair and remodeling needs.
Q. How much can I afford to spend on a house?
A. The best way for you to get an idea of the amount of money you have to work with is to look at both your income and the amount of debt you have. The rule of thumb is to plan on keeping the cost of your home at somewhere between 1 and 2 times your annual income. This will vary depending upon your debt obligations. When you’re going through the mortgage preapproval process, the lender will generally be checking to make sure that your monthly debt payments (e.g., car, credit card, mortgage payment) would not exceed 36% to 40% of your gross monthly income.
In general, your monthly mortgage payment (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income.
Q. How much money will I have to come up with in order to buy a house?
A. This will depend on the cost of the house, as well as the type of mortgage you get. However, you can expect to have to come up with:
- Earnest money (a deposit made when you make an offer on a house)
- Down payment
- Closing costs – once you know what kind of mortgage you qualify for and how much your down payment will be, your HomeVestors franchisee will work with you to determine how much your closing costs will be.
Q. What expenses are included in a mortgage payment?
A. As soon as you decide to start shopping for a home, you begin to hear a lot of terms you may not be familiar with. One you might have already come across is PITI, which stands for Principal, Interest, Taxes, and Insurance – the four components included in a mortgage payment.
So, with each monthly house payment, you’re actually paying a portion of your principal loan balance and interest on the loan, 1/12 of your annual property taxes, and your monthly homeowner’s insurance premium.
But it’s important to keep in mind that this is not the only new monthly expense you’ll encounter as a new homeowner. Utilities like electricity and water will most likely be higher than you’re used to. Plus, you will probably have new utilities to pay, such as gas and sewer. You might also be responsible for paying homeowner association or condo association dues.
Another expense that can catch a new homeowner off guard is home repair. Buying a HomeVestors house is a good way to keep those expenses at a minimum, because you will know before you purchase the house what’s been repaired and is under warranty, and what is original to the house.
However, you still have to be prepared for the unexpected. That is why many of our franchisees also offer an optional homeowner’s warranty.
Q. What kinds of financing programs do you offer?
A. When you buy your first home from a HomeVestors franchisee, there are several financing options available to you – even if your credit is less than perfect. Through a special arrangement with Bank of America®, many of our customers have been able to purchase a HomeVestors house with little to no money down! Plus, some HomeVestors franchisees offer owner financing or other programs.
Q. How does the process work?
A. Buying a first home can be intimidating. But when you work with a HomeVestors franchisee, you have someone to guide you through the entire process. Our franchisees often work with first-time home buyers, and are ready to answer any questions you have.
If you already have a real estate agent, your HomeVestors franchisee will be happy to work with him or her to help you find your perfect home. However, you don’t need to have an agent in order to buy a HomeVestors house.
If you’d like to talk with a HomeVestors franchisee about how the process works, click here to get started.
Q. Once I find a house to buy, how quickly can I expect to move?
A. In general, you should plan on moving about 45 days from the date you sign your purchase contract. Although HomeVestors franchisees can typically close quickly – sometimes in as few as 15 days – we advise planning on 45 days because, if you’re a renter, you will likely need to give your landlord 30 days’ written notice.
Q. If I talk to a HomeVestors representative, or view a HomeVestors house, am I obligated to HomeVestors in any way?
A. Absolutely not! Our franchisees are happy to talk with you to find out what you’re looking for and to learn how they can help you. If they have houses available that seem to meet your needs, they will be happy to show them to you. You are under no obligation to buy a home until you actually sign a purchase contract.
Q. Why buy from HomeVestors?
A. For the first-time home buyer, purchasing a HomeVestors house can make good financial sense. The homes our franchisees have for sale are generally more affordable than newly constructed homes or homes listed with real estate agents. They also tend to be in well-established neighborhoods, with mature landscaping.
But most importantly, a HomeVestors house has been thoroughly examined by one of our trained franchisees, and needed repairs have been made by contractors the franchisee knows and trusts. This reduces the likelihood that you’ll have to deal with an unexpected repair bill while you’re still trying to get used to the regular expenses associated with owning a home.
HomeVestors is a franchise. Each office is independently owned and operated. This is not a franchise offering. A Franchise offering can only be made by a uniform franchise offering circular. All HomeVestors franchise programs are subject to change due to market conditions or availability of funds. Financing programs are not guaranteed by the franchise agreement.
In accordance with the Law, all property
is offered without respect to race, color, creed,
national origin, sex, familial status or disability.