Questions about buying a house

[onlydarksets]

If you are buying in a hot market (like NoVa) you need to be pre-APPROVED, not pre-qualified. It's a big difference - pre-approval means that the bank has looked at your records and will lend you $X if you find a house that passes all inspections and appraisals. Pre-qualification just means they will probably lend you $X, but you have to go through their underwriters first.

Here in NoVa, almost nobody gets a house if they are just pre-Q because there are multiple contracts and the pre-Q contracts are more risky (that is, higher probability the contract will fall through).

Also, in an 80/10/10 (the typical breakout for what FRPLG describes as an alternate to PMI), the second trust has a higher interest rate than the primary mortgage. Have your agent do the math - PMI may be cheaper than an 80/10/10. My uncle just bought a house and that was the case.

Finally, make sure you find out whether your agent is a buyer's agent. In some states, all agents represent the seller because the seller pays the fees. That means that if your agent is a seller's agent and you tell her in confidence that you would pay $25,000 over the asking price, she is bound by law to tell the seller that. Kinda kills your negotiation power.