Before shopping for a St. Louis or St. Charles County home, there are some important things you should know. Once you’ve learned how to start the home buying process, you’ll be better able to get the right home at the right price. Consulting a qualified lender to find out how much house you can afford and getting preapproved for a loan is always a good place to start. Below we’ve put together a list of frequently asked homebuyer questions and our answers to help you prepare and start the home buying process on the right foot.
How much house can I afford?
When determining how much you can afford, one must look at savings, income and the current interest rates to figure the maximum price you can spend on a home. Most lenders recommend that you spend no more than 28% of your monthly income on mortgage payments. Also, don’t forget to consider any monthly fees that may be included if you choose a condo/low maintenance lifestyle.
What are the current interest rates?
Interest rates fluctuate daily based on the market and your individual rate will additionally be based on your credit history. Talking to a qualified mortgage loan officer will help you determine your rate. Contact The Boehmer Team if you would like the names of some reputable mortgage loan officers in St. Louis City, County, St. Charles County and surrounding areas in Missouri.
What is an appraisal and how much does it cost?
An appraisal is a valuation of a property that determines property value for tax and home loan purposes. Currently an appraisal costs between $350-$500 in the St. Louis, Missouri area. This is considered part of your closing costs. Keep in mind that prices may vary depending on the size of the home and the amount of land included.
What inspections will be required & how much do they cost?
A building inspection is the best opportunity to learn about your new home. This tells the buyer about the condition of the mechanical systems, roof, plumbing and electric just to name a few. Currently in the St. Louis, Missouri area a building inspection runs approximately $500-800 and is based on the sale price of the home.
Additionally, you can get termite inspections ($80-$100) and radon inspections ($100-$150). There are several other items that you can also inspect for including sewer laterals, septic systems, swimming pools, wells and environmental testing if desired.
What is a home closing?
The home closing is the final transfer of the ownership of a house from the seller to the buyer, which occurs after both have met all the terms of their contract and the deed has been recorded. This term can also be used to explain the timing of when the deed/ownership of the house will be transferred to the new owners. The closing usually takes place at the office of someone like a title officer, escrow officer, or real estate lawyer (someone who is licensed in initiating the transaction and purchase agreement).
How much will the closing costs be?
The amount of closing costs will depend on the amount of points a buyer will be paying with their mortgage loan. (Each point is 1% of the mortgage loan amount). Closing costs vary depending on the type of loan you are using. They can include title fees, origination fees, pre-paids including insurance, setting up your escrow account and survey to name a few. Depending on the loan amount and loan type, closing costs usually run approximately 2-3% of the loan amount. Your loan officer will be able to give you more accurate information on what your total closing costs will be.
I’m also thinking of buying a car, a boat or other big-ticket item. Should I wait?
Do NOT make any large purchases while in the home buying process as it could affect your ability to get a mortgage loan. Consult your loan officer before opening any charge cards and obtaining any other type of loan or credit.
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Now that you have the information you need to start the home buying process visit TheBoehmerTeam.com to see homes currently for sale in the St. Louis and St. Charles County areas of Missouri. You can narrow the results by the area and price range of your choice in addition to many other advanced features. Our website gets listing updates multiple times daily and has features like saved search, saved favorites and email notifications of new homes that meet your criteria as the come on the market. Contact us if you have any questions about the home buying process.