Home Buyers FAQs
Here's a comprehensive list of answers to your frequently asked questions about home buying
1
How much home can I afford?
Your affordability depends on factors like your income, expenses, credit score, and down payment. A general guideline is to aim for a mortgage payment that doesn't exceed 28% of your gross monthly income.
2
Do I need to be pre-approved for a home loan before I start my home search?
Pre-approval shows sellers that you are a serious buyer and helps you understand your budget. It involves a lender reviewing your financial information to determine the maximum loan amount you qualify for.
3
How much should I save for a down payment?
The typical down payment for a First-Time Home Buyer is 0-3.5%, depending if you qualify for a Veteran, Conventional or FHA loan. More seasoned home buyers may put down as much as 20%. Overall, a larger down payment often means lower monthly mortgage payments. Talk to our real estate professionals to connect you with our most credible lenders to see which loans, grants and down payment assistance programs can help you purchase a home!
4
What are closing costs, and how much should I budget for them?
Closing costs include fees for services like appraisals, inspections, and title insurance. On average, they can range from 2% to 5% of the home's purchase price.
5
Should I opt for a fixed-rate or an adjustable-rate mortgage (ARM)?
Fixed-rate mortgages offer a stable interest rate for the life of the loan, while ARMs may have lower initial rates but can change over time. Choose based on your financial goals and risk tolerance. We can connect you with our partner lenders to give you a better understanding of both options and let them advise you based on your current financial status.
6
How does my credit score affect my mortgage rate?
A higher credit score often leads to a lower mortgage interest rate. It's crucial to review and improve your credit score before applying for a mortgage.
7
What's the importance of a home inspection?
A home inspection helps identify potential issues with the property. It gives you the opportunity to negotiate repairs with the seller or reconsider the purchase if major problems are discovered.
8
How does the escrow process work?
In the escrow process, a neutral third party holds funds and documents until both the buyer and seller fulfill their contractual obligations. This ensures a smooth and fair transaction.
9
What's the difference between homeowner's insurance and a home warranty?
Homeowner's insurance covers damage to your property and liability, while a home warranty typically covers the repair or replacement of major home systems and appliances.
10
​How long does the home buying process take?
The timeline varies, but on average, it takes 30 to 45 days from an accepted offer to closing. Delays can occur due to factors like inspections, appraisals, or loan approval.
