Buying a house for the very first time is an intimidating process. We are here to make your life easier and reduce the stress that comes with buying your first home. Asking the right questions and doing a little research is essential to the homebuying process. Below are seven frequently asked questions for first time homebuyers!
Should I buy instead of rent?
In most cases, yes. Buying has a ton of benefits over renting, which include:
- Tax breaks
- Financial gains
- Appreciation in value
- Capital gains
- A sense of pride!
Am I ready to buy?
As you start thinking about this, ask yourself the below questions. If the answer is yes to most of them, you’re ready to buy!
- Do I have a steady job?
- Have I been employed for the last two to three years?
- Is my current income reliable?
- Do I have a positive bill-paying history?
- Do I have any outstanding, long-term debts?
- Have I saved for a down payment?
- Can I afford to pay a mortgage, taxes, utilities, and insurance?
Does my credit score impact my ability to buy?
- Yes, your credit score may impact your ability to buy a home. As mortgage lenders, we use credit scores to decide who receives loans and at what interest rate. The higher your score, the better the chance of getting a loan with an affordable interest rate!
How much do I need for a down payment?
- Saving for a down payment is one of the hardest things for first time homebuyers. We typically expect between 5-20% put down when financing a house. With different lenders, comes different requirements for down payments. The length of the loan is also taken into consideration. If a house is on your mind, now is the time to start saving!
What are the homeowner’s tax benefits?
- Typical deductions are mortgage interest and real estate taxes.
- Usually, loan discount points and origination fees are deductible.
- There are even capital gains benefits.
What is the difference between prequalified and preapproved?
- Prequalification: Getting pre-qualified for a mortgage gives first-time homebuyers an indication of how much they “might” qualify to borrow. This mortgage amount is not guaranteed because no information has yet been verified. A letter from the lender may only state that you are “likely” to be approved for a mortgage.
- Preapproved: Getting preapproved is based on a real credit score, and it also puts real estate agents and home sellers at ease. The buyer has more to offer when making a deal on a house when they are preapproved.
How do I get the best mortgage?
- Contact us!