Down payments are a big part of purchasing a home with a mortgage  Your minimum down payment depends on the type of mortgage, the lender and your finances.

When borrowing money from a lender to purchase a home, the more cash you put down, the better your financing terms will be. It is important to understand what a down payment is and how much cash you need to have. A down payment is the cash that is put down on a large purchase such as a car or a home. The amount of the down payment is usually a percentage of the total amount of the cost. A $350,000 home with a down payment of 10% would be $35,000.

Different lenders and different loans will require a different percentage of the whole cost for the down payment. If you are obtaining a VA loan or a USDA loan you are not required to make a down payment because these are backed by the federal government. The magic number in most cases, when it comes to a down payment, is 20%. With most lenders, 20% down on the purchase of a home will give you a good mortgage rate and allow you to bypass mortgage insurance. An FHA loan that is backed by the FDA, requires a minimum of 3.5% of the purchase price. Many conventional loans (Fannie Mae HomeReady and Freddie Mac Home Possible) mortgages require as little as 3% down.

Remember, a larger down payment will get you a better mortgage interest rate, lower upfront and ongoing fees, more equity in your home from the start and a lower mortgage payment. Lenders like a larger down payment because the risk becomes lower for them. A professional lender can help you through this process. They can help you determine how much to put down and how it affects your monthly mortgage amount.

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A home inspection is an important step in the process when purchasing a home.  Whether it is new construction or resale, you want to make sure the home is in tip-top shape.  Here is a list of questions to ask before, during and after the home inspection.

Questions To ask before the inspection

1. What do you check?

“A lot of people don’t know exactly what a home inspector is going to do,” says Frank Lesh, executive director of the American Society of Home Inspectors.

According to Lesh a home inspector checks 1,600 features on a home!  This includes most everything from the roof to the foundation.  It is a bonus to know what an inspector can and can’t do.

2. What don’t you check?

Even though it seems like an inspector inspects most everything, this is not the case. There are limits to the job. For example, a wall can only be visually inspected and not cut into. If an inspector thinks there is an underlying problem, they can flag the potential problem so you can hire an expert to look into it.

3. What do you charge for a home inspection?

There is a range of pricing when it comes to a home inspection.  They usually cost between $300 to $600 depending on the location of the house, the size of the house and the inspector. Remember ask what forms of payments are accepted as you will have to pay the inspector the day of the inspection.

4. How long have you been doing this?

The more experience the inspector has, the more likely he will have seen many different scenarios.  A newer inspector doesn’t mean a less qualified inspector, they just might not have as much experience especially with an older home that might have some unusual features.

5. Can I come along during the inspection?

An inspector should expect you to be there. A good inspector will explain some of the home’s systems and how they work when inspecting your home. Sometimes explaining things in person might help with understanding the report. It is a bad sign when an inspector does not want you present at the inspection.

6. How long will the inspection take?

If you work, then you will need to know how long it will take for the inspection because they usually take place during the workweek. It might only be a ballpark figure because it will depend on the condition of the home.

7. Can I see a sample report?

Sometimes a report can be overwhelming especially for a first-time homebuyer. A sample report can be beneficial because it can get you familiarized with what you can expect to see on your home’s inspection report.

Questions to ask during a home inspection

1. What does that mean?

When an inspector is going through your home they will go slowly to make sure they double-check that everything is in working order.  If there is a problem, the inspector will point it out and explain what is wrong and needs to be fixed.

An inspector does this every day so they are very familiar with the lingo.  If you do not understand something they are explaining ask questions. If the inspector points out a problem, ask how difficult it is to repair and how much it will cost. Sometimes the buyer can go back to the seller and ask for things the inspector finds to be fixed.

2. Is this a big deal or a minor issue?

Purchasing a home is a big investment and commitment.  When an inspection report points out problems whether big or small it can make you second guess your decision. An HVAC system that is not up to code can sounds awful to you but it might not be as bad as you think.  Before panicking, ask the inspector if they believe the problem is a big deal. If they do, you can walk away or negotiate repairs with the seller.

3. What’s that water spot on the ceiling, and does it need a repair?

Anything you see that you think might be off, ask the inspector about it. This is a big purchase and you should not shy away from asking an inspector for explanations. A good inspector will ask you if there are any concerns you have with the home before they start their inspection.

4. I’ve never owned a house with an HVAC/boiler/basement. How do I maintain them?

As mentioned before, this is a perfect time for a professional to explain how things work.

“Inspectors are used to explaining basic things to people. If you have an inspection question, ask it,” Lesh says. “Don’t expect your inspector to teach you how to build a clock, but we are happy to answer and explain how things work.”

5. What are your biggest concerns about the property?

When the inspector has finished, they should give you a general summary of their findings. The written report which will come later will be more thorough.  This is a great time to ask the inspector their thoughts and concerns on the problems found. If an electrical issue is found, it might be a good idea to have an electrician come and inspect the problem.

Questions to ask after the inspection is completed

1. I don’t understand…can you clarify?

You will receive the report a day or two after the inspection. The report will be a detailed list of problems that are found along with photos of the problem areas. If you do not understand any of the photos or explanations ask the inspector to explain.

2. Is there any problem in this house that concerns you, and about how much would it cost to fix?

Most problems found in an inspection should not be a deal-breaker.  An inspector can help you determine if it is a minor problem with any easy fix or if it is something drastic that would make a buyer walk away.

“The inspector can’t tell you, ‘Make sure the seller pays for this,’ so be sure you understand what needs to be done,” says Lesh.

3. Should I call in another expert for a follow-up inspection?

If there is a major issue, a second opinion from an expert in the field would be a good idea. If an electrical issue has been flagged, an electrician can come in and see exactly what the problem might be and how much it will cost to fix it. A Realtor can then negotiate with the seller to see if the seller would be willing to fix it.

4. Is there anything I’ll need to do once I move in?

An inspection report not only tells you the problem areas but also gives you suggestions on things you should fix in the first couple of months of living in your home.

“I had a couple call and tell me they had seepage in the basement,” Lesh says. “I pulled up their report and asked if they’d reconnected the downspout extension like I recommended. Nope. Well, there’s your problem!”

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