Frequently Asked Questions
1. Can I afford a home with my credit score and current job?
Some people have enough income to cover a mortgage even if unemployed….but are receiving a non-salary income source that you can rely on as a homeowner, as long as your credit score and debt-to-income ratio are up to par A credit score of 620 or higher should allow you to qualify for a mortgage but some government-backed loans may allow for lower scores.
2. How do I go about research to see if I am financially prepared to be a homeowner?
Review your credit history by getting copy of your credit report, fix any issues you can before you start the process. Review your bank statements and see how you are handling your expenses. Are you able to pay bills on time and save money as well?
3. Can I get a better interest rate if I make a higher down payment?
Banks and lenders usually offer better interest rates when your loan-to-value ratio is lower. An increase in your down payment lowers this ratio and lowers the lender’s risk. Lower interest rates can save you significant amounts of money over the life of the mortgage.
4. How long does it usually take to buy a house?
There’s no denying the home buying process can be a lengthy one. Besides the time spent finding your dream home, you have to find a real estate agent, get approved for a loan, make an offer, get a home inspection, appraisal, etc.
The amount of time it takes for each step in the home buying process varies. But typically after the contract is signed, it can take anywhere between 30 to 45 days to close.
5. What kind of property is right for a first-time homebuyer?
Purchasing your first home is a big commitment. Besides considering all the many costs of owning a home, you also need to consider what kind of property is right for you and your family.
For example, condominiums require less maintenance than homes. But with so many condo association rules, you might not be able to customize your home as much as you’d like. While you can customize all you want with a single-family home, you’ll be responsible for all the maintenance and repairs – which can easily add up.
Before beginning your home search, research the many different types of properties and costs associated with them all. Pick an option that aligns with your finances.