Buying your first home can feel like being on a roller coaster; it’s both a thrilling and stressful experience. There are so many questions and hurdles that your head may feel like it’s spinning.
While the learning curve is steep, doing a little homework -and asking the right questions- will help you navigate the process. Here are some questions you should be asking if you’re thinking of getting into the housing market for the first time.
Why Buy Instead of Rent?
Depending on your circumstances, buying a home could be a solid investment. You’ll need to understand the state of your local housing market before you make that decision. Plus, there are a ton of benefits of owning rather than renting. Tax breaks, appreciation in value, equity, freedom, and security are just a few of the perks of home owning.
How Do I Know How Much I Can Afford?
Don’t go in blind. Meeting with someone at your bank or a lender could help you understand your finances and how much you can afford for your down payment and monthly mortgage payments. They will consider how much money you make, your current debts, and credit history before giving you their honest opinion.
How Much Money Do I Need For A Down Payment?
Saving up for your down payment could end up being your biggest obstacle in home buying. How much your down payment should be depends on how much your loan is, your lender, and factors like the type and length of your loan. Most lenders expect anywhere between 5-20% for your down payment.
Will My Credit Score Affect My Ability To Buy?
Your credit score is a numerical representation of your credit history as well as your financial standing. This allows your lender to get an idea of how reliable you are and determine what your interest rate should be. The better your credit score, the lower your interest rate.
What Does My Monthly Mortgage Payment Cover?
As a new home buyer, it may be confusing figuring out your expenses after you buy your home. Your monthly mortgage payment doesn’t cover your regular home expenses such as heating, repairs, and homeowners association fees. Your mortgage payment will most likely cover your principal loan payment, homeowners insurance, property taxes, interest fees, and your private mortgage insurance.
What’s Involved in The Closing Process?
Once the buyers and sellers agree on a price, the closing process can begin. It typically lasts between 30-60 days during which the contract is drawn up, financial documents are situated and inspections are completed. On the day of closing, both parties will meet to sign all the final documents and hand over the keys.
Do I Need A Realtor?
In short: Yes. Going it alone as a first time buyer is a challenge, and you’ll need a trusted expert on your side. I am professionally licensed, up to date on all of the current local market conditions, and experienced with helping first time buyers find the best home to suit their needs.
If you’d like to discuss your current situation, I’d love to hear from you.