There is no one right way to buy a home. Everyone’s home buying process will be a little bit different. It takes work, time, research, and budgeting to ensure you have a smooth first time home buying process. Here are 5 first time home buyer FAQ’s.
First Time Home Buyer FAQ’s
Q: Do I need to save a ton of cash?
A: This is one of the most common first time home buyer FAQ’s. The answer is both yes and no. There are a couple zero down mortgage options out there, however the greater amount you can put down, the less you need to borrow and the less likelihood of mortgage insurance. By saving a little bit of each paycheck, you can quickly grow your savings without being too hard on the wallet at closing.
Q: Do I need to be debt free?
A: No. As a first time home buyer, you’ll likely have some sort of debt such as a car payment, student loans, credit cards, etc. However, while you don’t need to be debt free, you do need to have your debt under control. Debt levels will affect your overall credit score which will affect your ability to qualify for a home loan. 30% is a good number to keep in mind. As long as each credit card is under 30% of the max limit, you shouldn’t have anything to worry about.
Q: How important is my credit score?
A: You credit score helps your lender look into your past and current financial situation. The first step in managing your credit score is to review and see the areas of strength and areas of opportunity for your credit score. Additionally, the higher your credit score, the lower your mortgage rate.
Q: What loan is best for me?
A: This is one of the first time home buyer FAQ’s that can be answered when you talk with your lender and discuss your credit score, debt, down payment, etc. Based on your qualifications, you may even be best suited for a VA or USDA loan. These are answers that will come when you talk with your mortgage lender.
Q: How do I even begin the mortgage process?
A: The first thing to do is to talk to a mortgage lender about what you want to accomplish. If you want to buy a home, your lender will tell you how on track you are, and will give you the resources to achieve your goal. From there you can hire a real estate agent to help you with the actual home search. But it’s imperative that before you even start looking at homes, you are set to go financially.
You may also like: Home Buying Tips from Millennial Home Owners.