Commonly Asked Buyer Questions
It’s common for people to find frequently asked questions on a website to help them identify top answers to what they need to know. The housing market changes so often that the questions are constantly shifting. What are the recent top questions asked by new home buyers online? Let’s take a closer look.
How much money do I need to save for a down payment?
While your down payment will depend on your loan type, and it can sometimes even be zero – the magic number is generally 20% to avoid having to pay PMI (private mortgage insurance). Of course, the more money you can put down, the better. A higher down payment may demonstrate a lower risk to the lender.
What is the difference between a fixed-rate and an adjustable-rate mortgage?
We wrote this post in 2022 that gave an overview of the difference between fixed and adjustable-rate mortgages. A fixed-rate mortgage means the interest rate is set when you take out the loan and doesn’t change throughout the life of repayment. When you have an adjustable-rate mortgage, the interest rate fluctuates and changes at various intervals.
What is private mortgage insurance (PMI), and do I need it?
PMI is required for certain types of loans. You can read more about it here. PMI stands for private mortgage insurance, and is generally required if you get a conventional mortgage to buy your home – especially if you cannot put at least 20% down.
What is a home inspection, and why is it important?
When you buy a home, you’ll want to have it inspected. Doing this will give you a better idea of repairs you might need to make, or, in the worst-case scenario, if you need to back out of the sale. A home inspection provides peace of mind.
How do I choose a real estate agent to work with?
Choosing a real estate agent is about developing a relationship with someone who understands your needs and interests. You want to work with an agent you get along with and trust. We’re happy to make a referral if you don’t have an agent.
What are closing costs, and how much should I expect to pay?
Closing costs are often one of the most overlooked expenses when buying a home. Closing costs generally amount to anywhere between 1% – 2% of the home’s purchase price.
How can I improve my credit score before applying for a mortgage?
When applying for a mortgage, we will pull your credit score. In some cases, we learn that your credit isn’t where it needs to be to successfully receive a mortgage, and you might have to work on improving your score. You can do this through several avenues depending on your circumstances. Read more about it here.
How long does it take to close on a home?
The length of closing will depend mainly on where you are buying, and any additional requirements from the seller. However it is estimated at typically 30 to 60 days.
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