Answers to Common Questions From New Homebuyers
Posted by : Admin
The twists and turns of the homebuying journey can be intimidating and overwhelming. Your best option? Ask lots of questions to understand the process and expectations. Here are the most common questions and answers, straight from new homebuyers like you.
Q: How Do I Know if I’m Ready to Purchase a Home?
A: You have a steady income and want to be a homeowner, even with all that comes with it (taxes, repairs, etc). While other factors contribute, like your savings, your love for your city or town, and your credit score, wanting to be a homeowner is the biggest indicator that you’re ready.
Q: Where Do I Start?
A: Look at your budget and decide how much you can afford to spend on a mortgage payment every month. Plan to cover your principal, interest, taxes and insurance, or PITI payments, as well as maintenance and repair costs. From there, talk to an experienced loan originator, who can lay out your options.
Q: How Much Money Should I Save for a Down Payment?
A: Loan programs differ greatly. Some require 20 percent of the home price down, while others require as little as 3 percent down — or even no down payment. The short answer: Stash as much cash as possible for your down payment.
Q: Will My Student Loans Stop Me From Buying a House?
A: Student loans don’t automatically prohibit you from buying a home. However, if you haven’t paid them on time, or you owe a high balance in relation to your income, student loans can decrease the amount of house you can afford.
Q: Should I Use a Real Estate Agent?
A: A big, wholehearted YES! Real estate agents are your best friend when it comes to navigating the homeownership path. They can answer questions, give support and make recommendations from their extensive real estate experience.
Q: What Are Closing Costs?
A: These are expenses associated with securing the loan, title, and getting everything moved into your ownership. Things like the appraisal and home inspection are considered closing costs, too. Sometimes the homeowner must pay these up front, and other times they’re rolled into the mortgage loan.
Q: Is Getting Pre-Approved Worth It?
A: Again, a big YES on this question. Working with a lender to get pre-approved helps you know how much of a loan you can qualify for and shows sellers you’re serious about buying their property. A pre-approval letter helps you look better than the other buyers who didn’t take the time to secure one.
Q: What Credit Score Do I Need?
A: Credit scores have a big impact on getting approved for a mortgage. Most loan programs require a 600, but sometimes a homeowner can use programs that qualify consumers with scores of at least 580.
Buying a home is a big decision. Do your research and trust the professionals to help decide if you’re ready and how much home you can reasonably afford.
