How To Buy A Home In Maine

Before We Begin...

Agency Relationships

When you have found the REALTOR you can trust, you will need to make an appointment for a consultation to analyze your needs. The Maine REALTOR will present you with a "form 3" which is required by Maine law.  This document is not a contract but merely discusses Agency Relationships. It is important for you to understand that Maine law provides for different levels of brokerage service to buyers and sellers of Maine real estate. View an example of a Form #3.
Once your needs have been analyzed by a Maine Realtor, you are ready to be pre-qualified.

Pre-qualification and Pre-approval

Why pre-qualify?

We recommend buyers get pre-qualified before beginning their home search. Knowing exactly how much you can comfortably spend on a home reduces the potential frustration of looking at homes beyond your means. Sellers also want to know that the potential buyer isn't wasting their valuable time.

Buyers and Sellers Rely on Their Real Estate Agents for Advice - Real estate professionals sometimes make mortgage recommendations to clients unfamiliar with the home buying process as a viable option for many buyers.

Get pre-qualified now!

Many buyers apply for a loan and obtain approval before they find the home they want to buy.  Why?

Pre-qualifying will help you in the following ways:

• Generally, interest rates are locked in for a set period of time.  You will know in advance exactly what your payments will be on offers you choose to make.
• You won’t waste time considering homes you cannot afford.
  

Pre-approval will help you in the following ways:

• A seller may choose to make concessions if they know that your financing is secured.  You are like a cash buyer, and this may make your offer more competitive.
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• You can select the best loan package without being under pressure.

After you have been pre-qualified and now know what price range you'll be shopping for,  Your Maine REALTOR will find homes that meet your criteria. You are now ready to see

Down Payment Requirements:

Most loans today require a down payment of between 0 % and 5 % depending on the type and terms of the loan.  If you are able to come up with a 20-25% down payment, you may be eligible to take advantage of special fast-track programs and possibly eliminate mortgage insurance.

 

Closing Costs:

You will be required to pay fees for loan processing and other closing costs.  These fees must be paid in full at the final settlement, unless you are able to include them in your financing.  Typically, total closing costs will range between 2-5% of your mortgage loan. 

Qualifying For The Mortgage:

Most lenders require that your monthly payment range between 25-28% of your gross monthly income.  Your mortgage payment to the lender includes the following items:

• The principal on the loan (P)
• The interest on the loan (I)
• Property taxes (T)
• The homeowner’s insurance (I)

Your total monthly PITI and all debts (from installments to revolving charge accounts) should range between 33-38% of your gross monthly income.  These key factors determine your ability to secure a home loan: Credit Report, Assets, Income, and Property Value.

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