FAQ

    FIRST TIME HOMEBUYERS FREQUENTLY ASKED QUESTIONS

What do “low” interest rates mean?
It means that the interest rate on a mortgage today is at a 50 year low. If you are buying a $200,000 home your monthly mortgage payment will be significantly less with today’s current rates of 5% versus a couple months ago at 6%. This could save you over $1,500 a year and over $45,000 over the life of the loan.

How much do I need to put down to buy a home today?
3.5% of the purchase price is typically the lowest that can be put down on a home in today’s market.

Why should I use a Realtor?
Anyone who can use the internet has access to thousands of listed properties online. Then why do you need a Realtor? Realtors do more than just show homes – much more. Our job includes negotiating all of the different terms that are involved in the sale of real estate, including price, date of closing, date of possession, any repairs that might need to be done, earnest money, and personal property items in the home. We make sure that an inspection takes place, that the financing is in check and that the everything runs smoothly leading up to the closing.  We do the tough stuff, so that you can do the fun stuff – like picking out your new home!

What can I expect to pay in closing costs?
When you purchase a home there are fees associated with the title company and mortgage companies. If you are planning to get a mortgage you can expect closing costs to be about 3% of the purchase price of a new home.

I have heard of a Seller paying for closing costs – is this possible?
It is possible to have the Seller pay closing costs. Typically a lender will only allow the Seller to pay a certain amount – usually 3%. This is fairly common in today’s market as it’s difficult for buyers to have enough cash to pay for both the down payment and the closing costs.

How much will it cost to have a Realtor represent me?
One of the advantages for buyers and sellers is that they do not pay a Realtor until they actually buy or sell a home. The home seller pays commissions to their agent’s broker, who in turn pays the buyer’s agent. As a buyer, your only cost for working with an agent is a broker administrative commission (to Edina Realty) of $325.

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