Buyer FAQs - Utah Real Estate
Q. How many homes should I see and how should I make the final decision?
A. In general, buyers will tend to look at an average of 10-12 properties before attempting to make a final decision on which one they will purchase. Some buyers will look at more, while other buyers will find their dream home in the first 2 or 3 homes they see. When you find a home you really like, it's a good idea to go back and look at it at a different time of day. This will give you greater insight into what it will be like living in the home full time. Ensure that the location of the home is acceptable (is it on a busy road or directly in the local airport's flight path), and that the floorplan is functional and appealing.
Q. What happens if the house I want to purchase does not appraise for the offered purchase price?
A. If the house doesn't appraise at the amount expected, other alternatives are typically found. A second appraisal may be sought, the buyer may be required to put more money down, the seller may adjust the price or offer other concessions, the two sides may negotiate to split the difference between them, or the buyer can cancel the purchase contract and walk away from the property (assuming the deadline hasn't already passed).
Q. How can I check my credit rating before I apply for a mortgage?
A. Your credit rating is based on a combined score generated from three credit bureaus who look at your credit history, amount of credit available, and recent inquiries to determine your FICO (credit) score. One of the easiest ways to obtain your score is to have your mortgage broker check your rating for you and, if appropriate, suggest ways for you to improve your credit. Alternatively, you can get your score or review your credit report by going online to www.myfico.com or contacting the credit bureaus directly at:
Equifax: (800) 685-1111
Experian: (888) 397-3742
TransUnion: (800) 916-8800
Q. Why should I consider paying points?
A. Buyers often choose to pay a one-time charge called mortgage "points" in exchange for a lower interest rate. This is often referred to as 'buying down your rate.' Usually paid at closing, each "point" costs 1% of the mortgage amount (ie - one "point" would cost $3,000 on a $300,000 loan). The lower interest rate reduces the monthly mortgage payment, and points paid in conjunction with the purchase of a home are generally tax-deductible in the year they're paid (see your tax advisor). Monthly savings will often exceed what was paid in points in just a few years' time.
Q. What is title insurance and why do I need it?
A. Basically, title insurance ensures that you will be conveyed a clear title to the home you're purchasing. A title search is one of the primary components of the "due diligence" period, and will be performed by the title company of your choice (we highly recommend Surety Title). The resulting Preliminary Title Report (PR) determines whether the seller actually owns the property, and if there are any outstanding claims or liens against it. Title insurance is required of the buyer by the lending institution that issues the mortgage on the property, and the rates are governed by the state of Utah.