FAQ For The First Time Homebuyers
Yesterday, I threw a question out on our social media stories for the potential first time homebuyers. I just asked our followers to send me some questions they had regarding real estate or for the first time buyers and I got some good questions!
I'll answer a few of these below, but to all the readers out there, just know that it's OKAY to ask questions. You may feel like your question may be stupid or irrelavent. I know that's how I felt when I had questions for my agent.
Anyway, thank you all for submitting questions, I'm hoping I can give you the answers you're looking for.
1. How much should I save up for a down payment?
There are various loan programs that you can consult your lender about. A good lender should guide you in the direction to put you in a good home, without leaving you broke. For the most part, putting down between 3% to 20%. On a more personal note though, try to be goal oriented when it comes to figuring out what you want to put down. Set one big goal, followed by some smaller goals that will help get you to the big one, which is buying a house. Be smart with your money, make a budget and save!
2. What do closing costs consist of?
A good question! Closing costs are charges and fees that you pay when you purchase a house. A lot of the time, the buyer costs will include homeowner's insurance, property taxes and mortgage insurance. The seller will have some closing costs as well. For example, a commission to the real estate agent, title expenses and lender closing costs.
3. How do I know what my purchasing power is?
When you start the house buying process, you have to get pre-approved for a loan. There are four factors that come into play when figuring out your purchasing power: Your credit score, your down payment, debt-to-income ratio and your assests. The most confusing one is the debt to income ratio. Basically, lenders want to know that you will be able to pay your mortagage on time along with any other debts you currently have. Once these four things are figured out, you'll know your buying power! This puts you one step closer to buying your new home!
Thanks again for submitting questions. I highlighted these three because I felt like they were perfect introductory questions for a first time homebuyer. I'd love to do these FAQ blogs again when it comes to other real estate topics as well so if any of you have any questions leave them down in the facebook comments or twitter mentions!
2. What do closing costs consists