FAQ For First Time Home Buyers

FAQ For First Time Home Buyers

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Buying a home is likely the biggest and most daunting investment you’ll ever make. We encourage you to ask ALL of the questions, because the more informed you are as a buyer, the easier your future will be. It is so important that you understand this complex process so that you can make informed and intelligent decisions about your financial future. 

While each individual will have their own inquiries, there are some common questions when people first enter the buying scene. We’ve addressed a few that we see regularly from first-time homebuyers in this month’s blog post. 

 

Should I buy instead of rent?

The benefits of buying, rather than continuing to rent, are numerous. In addition to the obvious feeling of pride in ownership, there also comes a sense of security. Financially, there are tax breaks, equity, appreciation in value, and other financial gains to consider. 

Check out our previous blog, Is It Better To Rent Or Buy? that dives into this a bit further. 

 

Am I ready to buy? How much do I need for a downpayment?

Surely, you didn’t reach this phase of life where you are considering purchasing a home, without first considering the necessary factors of reliable career/income, other debts, and credit score.

The question that always receives the most attention is that of the downpayment.  This is a key component to purchasing a home, and it will affect your life every single day after you close - especially if miscalculated. Your real estate & mortgage support system can help, but you also need to prepare your own personal budget, keeping all costs in mind when looking at your house budget: maintenance, property taxes, bills, etc. As a general rule, a mortgage should not take up more than 25 to 30% of your net income. Another rule of thumb is that the cost of your home should not be more than two and a half times your net annual salary.  

The actual downpayment amount will vary depending on the lender requirements, and the type and length of the loan - however most lenders expect between 5% and 20% for a down payment. 

 

What’s the difference between an appraisal and an inspection?

A home inspector determines the condition of a structure, whereas an appraiser determines the value of a property.  You need both when buying your first home, and these are expenses to factor into your budget as well. 

How long does it take to buy a house?

Unfortunately, the answer here is longer than you think.  Every home sale is truly different, and the search can be the most time-consuming part of it all. After you finally find a home you want to buy and your offer is accepted, it can typically take 30-45 days to close on your loan.

 

Buying a house is a lot to wrap your head around - especially as a first time home-buyer. If you know what to expect, and have honest professionals on your side, it doesn’t have to be quite so confusing or stressful.  Are there other questions you have that you’ve been nervous about asking? No need to hesitate with us! We’ve been in this industry for over 20 years, and are here to help with all of your questions and needs. 

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