Preapproval FAQs

Is it necessary to get pre-approved by a lender before I begin the home search?

No, you are not required to get pre-approved, but we recommend that you do so if you are getting serious about buying a home. This will:

  • Help you narrow down the price range for your home search. The pre-approval process will help you understand what you can afford by evaluating your potential monthly mortgage payment and other financial obligations in comparison to your income.
  • Ensure that you have saved enough for a down payment and the other costs associated with completing the transaction.
  • Assist in your negotiations with the seller when you find the home of your choice. Before a seller signs a purchase contract and takes their home off the market, they want to know that the buyer submitting an offer has been pre-approved for a loan by a trusted lender.

CapCenter will be happy to provide a free, no obligation Pre-Approval Letter to you. It’s easy and fast -- simply complete our electronic application and we will contact you shortly. Your Loan Consultant will then provide a Preapproval Letter and Clarity Statement which document the loan amount for which you are approved and the costs associated with the loan transaction.

Your CapCenter Managing Agent will simplify and share information about the mortgage-related terminology, loan options, and all the numbers on the pre-approval. We will make sure you have a firm understanding of your debt to income ratio, estimated monthly mortgage payments, cash to close, escrows, pre-paids, closing costs, and if applicable, mortgage insurance.

Should I get pre-approved now even if I don’t plan to start looking for a few months?

We hear “I’m in the early stages, it may be a few months,” as often as we hear “I didn’t expect to find a house so quickly!”. So, yes, we think that once you’ve committed to the idea of buying a house, it’s important to go through the preapproval process so that you can understand the financing side of the equation. The lender might even identify ways to improve your position vis a vis loan approval such as down payment requirements or issues on your credit report that should be addressed.

You are under no obligation to proceed with the lender who provides the pre-approval letter, and the letter can quickly be updated as you move forward.

What loan amount should I get pre-approved for? Is it easy to change the loan amount?

Unless you have asked to be pre-approved for a certain amount, the lender will pre-approve you for the maximum loan amount for which you qualify based on your Debt to Income (DTI) ratio. This amount plus your available down payment equals the purchase price for which you qualify. At CapCenter, your MA will use your pre-approval letter to establish a range of values for shopping purposes. When you make an offer we’ll make sure your preapproval letter reflects the price you are offering.

Will a pre-approval credit inquiry hurt my credit score?

When you submit a pre-approval or loan application to any lender, they will order your credit report (“credit inquiry”). In turn, this can cause concern that each credit “inquiry” will have a negative impact on your credit score, but don’t worry, most credit bureaus use a Fair Isaac Company (FICO) Scores model to calculate credit scores. According to Fair Isaac’s website (myfico.com), FICO Scores ignore loan inquiries made in the 30 days prior to scoring. So, if you move forward with a loan within 30 days, the inquiries won’t affect your scores while you are shopping.

In addition, FICO Scores look on your credit report for inquiries older than 30 days. If FICO Scores find some, the scoring model will consider inquiries that fall into a typical shopping period as just one inquiry. FICO’s newer scoring models consider 45 days the “typical shopping period.” Older versions define it as any 14 day span. For more information, visit: http://www.myfico.com/CreditEducation/CreditChecks/Inquiries.aspx

What can I do to improve my credit score?

According to myfico.com, people with high scores consistently exhibit this behavior:

  • Pay all bills on time
  • Keep balances low on credit cards and other revolving credit products.
  • Apply for and open new credit accounts only as needed
I was already preapproved by another lender, should I get pre-approved by CapCenter too?

It is not absolutely necessary, but since another inquiry is unlikely to hurt your credit score, we do recommend it. (see FAQ). Because CapCenter offers Zero Closing Cost loans, your CapCenter pre-approval might reflect a different loan amount or loan terms. Also, getting pre-approved now will enable us to more quickly update the pre-approval letter when it comes time to make an offer.

Home Shopping FAQs

I’m not certain that I want to work with an agent; why should I?

Your home will probably be the most expensive purchase you will ever make and embarking on this process without being represented by a licensed, knowledgeable real estate professional is risky. The process is complicated and you need someone on your side who is looking out for you, and only you.

  • A seasoned, professional agent has been through the process many times. They have information and expertise that a typical home buyer does not have:
    • Through access to the MLS and their professional networks, they have information about local market conditions and real estate transactions that is not publicly available. This will inform any offers you decide to make.
    • They are extremely familiar with the standard Virginia Purchase Agreement and know how to negotiate terms that will protect you in case something goes wrong;
    • They are familiar with other parties who might be involved in the transaction including closing attorneys, inspectors and insurance providers. They’ll help you select reputable, experienced pros and will guide you in deciding which inspections you should require.
  • A buyer’s agent does not represent the seller in any way. Your interests are their primary concern.
  • The seller pays the buyer’s agent’s commission, so there’s no cost to you. And, if you use CapCenter, we will actually refund a portion of our commission to you as a Realty Refund.
If I want to see the inside of a house, what’s the best process?

Contact the CapCenter realty team! We’re available 7 days a week and are happy to make arrangements for you to tour any area home. Having your MA make these arrangements will ensure that CapCenter is considered the “procuring cause” agent if you decide to purchase the home. In turn, this will ensure that you will receive a refund of a portion of the buy side commission that CapCenter receives from the seller. If you decide to make arrangements directly with the listing agent or to attend an open house, be sure to mention that you are working with a buyer’s agent.

I’ve found a house and the list agent has shown it to me, can I still engage CapCenter to represent me on the buy side so I am eligible for a Realty Refund?

Yes, in most cases, you may still hire CapCenter to represent you. Give us a call and we’d be happy to discuss this with you.

I am not happy with my current agent, what should I do?

Have you signed an agency agreement? If so, you should review the terms of the agreement to understand your options. If you haven’t signed an agreement, you can engage us. If another agent has shown you some houses but you haven’t signed an Agency Agreement, give us a call so we can discuss your situation further.

What if I don’t ‘click’ with my CapCenter Managing Agent?

When you engage CapCenter, you get our entire team. If you want to switch to a different MA at any time, we will honor your request.

Does CapCenter offer traditional/full service? Can CapCenter handle all my needs?

Yes, CapCenter offers all traditional realty services and then some. We try to provide relevants tools for the independent shopper, but we’re also there for clients who want more guidance/assistance. We tailor our approach to the type of experience you want.

Since CapCenter agents are salaried and don’t work on commission, how do I know that they’ll be there for me?

Our Managing Agents are CapCenter employees rather than independent contractors, and their compensation is based directly on your level of satisfaction. We believe this is the best way to ensure that they will be there for you every step of the way. Regardless of the size or time frame of the transaction, CapCenter Managing Agents value each client equally and will provide ethical, responsive representation every step of the way.

Purchase Offer FAQs

I’ve already found the home I want to buy, what is the next step?

If you are ready to make an offer, there’s no time to waste! Give us a call so that we can facilitate the preapproval process and discuss an offer for purchase. The first step in getting pre-approved is to complete an electronic pre-approval application on capcenter.com.

I was going to make an offer through the listing agent, is that a good idea?

The listing agent represents the seller only, and their primary concern is selling the house. We strongly recommend that you engage a buyer’s agent to represent your interests. The process is complicated and you need someone on your side who is looking out for you, and only you.

A seasoned, professional agent has been through the process many times. They have information and expertise that a typical home buyer does not have:

  • Through access to the MLS and their professional networks, they have information about local market conditions and real estate transactions that is not publicly available. This will inform any offers you decide to make.
  • They are extremely familiar with the standard Virginia Purchase Agreement and know how to negotiate terms that will protect you in case something goes wrong;
  • They are knowledgeable about other parties who might be involved in the transaction including closing attorneys, inspectors and insurance providers. They’ll help you select reputable, experienced pros and will guide you in deciding which inspections you should require.

Keep in mind that the seller pays the buyer’s agent’s commission, so there’s no cost to you. And, if you use CapCenter, we will actually refund a portion of our commission to you as a Realty Refund.

I understand that CapCenter covers the closing costs and offers a realty refund, should I still ask for seller concessions?

Yes, if an inspection identifies defects that will require some sort of repair, don’t be hesitant to ask for seller concessions to cover the cost of the repairs. If CapCenter’s coverage of closing costs plus the Realty Refunds exceed the transaction costs, prepaids and escrow deposits, you can use the remainder to buy a lower interest rate or to renegotiate the sales price.

What should I do with my current home - sell or convert to a rental property?

There’s no easy answer to whether a homeowner should sell or rent their current home. Are you ready to put up with the hassles of being a landlord? Do the economics work? Are you underwater on your current loan? These are just a few of the considerations that your MA will be happy to discuss with you.

Inspection FAQs

Should I have my home inspected prior to listing it?

The choice is yours, but CapCenter encourages you to get a general home inspection prior to listing your home. This will identify any repairs that should be made before the house is listed. Also, please note that any serious defects identified by the home inspection process might need to be disclosed to a potential buyer.

Keep in mind that the buyer is likely to request an inspection in the Purchase Agreement, so getting the inspection early will reduce the probability of unpleasant surprises later in the process that could disrail a deal or disrupt your timetable for closing.

What inspections do you recommend?

At a minimum we recommend a general home inspection. Your MA will help you decide if any other inspections should be completed based on the age, condition and construction of your home.

Financing FAQs

Should I shop around for a mortgage? Do I still have that flexibility?

Absolutely. It’s a little confusing to do an “apples to apples” comparison of loan quotes, but we will carefully review all offers with you so that you have a thorough understanding of the mortgage-related terminology and the numbers.

How are CapCenter’s mortgage and realty services related?

CapCenter is one company, and our mortgage and realty professionals work together as one team.

What does CapCenter mean by ‘Zero Closing Costs’? What’s the catch?

CapCenter’s Zero Closing Cost offer means that we offer to waive or pay traditional closing costs charged by other lenders. There is no catch! We cover the closing costs without inflating our interest rates or adding the costs to the loan amount. And, when your use our realty team, the Realty Refund will cover, at a minimum, the government recording fees and recordation taxes associated with the transaction.

What are the other transaction costs that aren’t loan-related and covered by CapCenter’s zero closing cost offer?

There are a few transaction costs that are not loan-related, i.e., they’re paid in a cash purchase as well:

  • Homeowner’ insurance:
    • Your first year’s homeowner’s insurance is due at the time of closing. This ensures that your home will be insured for the next calendar year.
  • Deed recordation taxes:
    • When you buy a home, the state and city/county will charge a tax to record the deed; the tax amount is based on the price of the house.
  • Escrows/Prepaids
    • Between prefunding your new escrow account and paying for some portion of taxes previously paid by the home seller, there’s the need to put some money aside for property taxes and homeowner’s insurance.

Until you find a specific property, the above costs will only be estimates. Ultimately, the actual dollar amounts will be the same regardless of lender, but they do need to be considered when calculating the Cash to Close the transaction. Your CapCenter Realty Refund will offset some of these transaction costs.

Another bank is advertising a better rate with closing costs - is this in my best interest?

Not necessarily. We commonly see other lenders try to compete with us by offering a lower rate but with high closing costs (e.g., origination points or fees, discount points and other lender fees). To conduct an “apples to apples” comparison, you should look at our lower rates with the discount points and compare to the rate and total costs charged by our competitor.

If I find a better offer should I take it, or should I show it to my CapCenter MA?

CapCenter tries to offer the best deal to all of our clients regardless of loan type or amount. If you think you have found a better deal, bring it to your MA immediately so that we can complete an “apples to apples” comparison for you.

Does CapCenter build the closing costs into a higher rate or origination fee?

No, we simply waive or pay the closing costs on your behalf. We encourage you to prove this to yourself by comparing our rates against other responsible competitors. We find that we win on the rate even while covering closing costs. You can also look at a market survey available on freddiemac.com, but be sure you thoroughly understand the rates that are presented. Specifically, in the Freddie Mac survey, these rates reflect various levels of discount points. Feel free to consult with us if you are comparing multiple offers.

Listing FAQs

Why should I work with an agent instead of trying to sell my home on my own?

Selling your home is a major financial transaction and can be quite disruptive to your daily life. We understand that you want to sell as quickly as possible for the best price. Using a seasoned, knowledgeable real estate professional to list your property has many advantages vs. a For Sale By Owner (FSBO):

  • Only a realtor can list your home on the MLS, which is the database used by the entire real estate marketplace (either directly or through a feed to another website). Though this is the primary tool for generating buyer interest, your agent will supplement the internet listings with other marketing tactics.
  • Through access to the MLS and their professional networks, an agent has information about local market conditions and real estate transactions that is not publicly available. This will facilitate a more thorough and accurate Comparative Market Analysis which is the key to setting the optimal asking price.
  • They are extremely familiar with the standard Virginia Purchase Agreement and know how to negotiate terms that will protect you in case something goes wrong. If you don’t have an agent, you’ll probably need to pay an attorney to review the agreement before it is signed.
  • Other real estate agents might steer their clients away from your home if you’re not represented by an agent.
When is the best time of the year to try and sell my home?

Spring is still the most active season for selling a home, but recent research shows the winter market may be the best time to market your home due to limited inventory (and competition). Your MA will work with you to figure out the best timetable to meet your needs and to get the best price on your home.

Should I renovate or do any large scale repairs prior to listing my home?

Most renovations will not yield a positive return so we generally recommend against them. Only those that add livable square footage might increase the market value of your home, but it’s not a sure thing. Repairs that affect the marketability of your home might be necessary before putting your home on the market. Your MA will collaborate with you to make these types of decisions.