Purchasing a home is a substantial financial investment. You’ll want to go into the process with questions you want to ask and the information you gather. When looking to buy your home, it’s some of the most exciting and nerve-wracking processes, but the benefits are worth it.
Looking at houses and browsing home décor magazines is fun. But some of the most commonly asked questions are about the financial side. Here are some of the most asked questions regarding home buying.
1. Am I Ready to Buy a Home?
Some things to consider before you shop for a home are, of course, your finances. Most lenders have hoops for you to jump through, so it’s vital to ask yourself some questions.
- Is my current income steady for the foreseeable future?
- Do I have any long-term outstanding debts, like a car payment or loans?
- Do I have a good history when it comes to paying bills?
- Have I saved for a down payment?
- Can I afford mortgage payments, taxes, insurance, and utilities?
These factors come into play when seeking a mortgage and looking for a house. You should be aware of the status of these questions when you start the home buying process.
2. How Much Do I Need for a Down Payment?
Saving for a down payment can take some time and feel like a huge hurdle when shopping for your first home. Mortgage lenders expect a down payment of somewhere between 5% to 20%.
The amount you will need for your down payment will depend on the lender’s requirements and the length of your mortgage.
The most reliable way to save for a down payment is to make a budget plan and focus on the end goal. Slowly but surely, you’ll get where you need to be.
3. Does My Credit Score Affect Home Buying?
A credit score is a powerful number. It acts as a snapshot into your lending history by numerically calculating your financial standing based on how diligently you pay back your credit. Mortgage lenders use your credit score to determine your mortgage amount and what interest rate you’ll receive.
Having a low score doesn’t mean that buying a home is impossible, but it may take longer to get a loan. Lenders may urge you to try and raise your score by paying off any damaging debt before approving you for a loan.
Bottom Line
There are endless questions to ask when you’re looking for a home, and your real estate professional is there to help guide you to the right sources to answer them. Contact Sarasota Realty to jump into your first home buying experience!
