Questions To Ask When Buying Your First Home VERIFIED
Navigating the home loan and mortgage can be complicated. Mr. Cooper knows what questions to ask as a first time homebuyer, so let us break it down and answer 10 of the most common questions that we get about mortgages and all things home loans.
questions to ask when buying your first home
Among other things, mortgage lenders will consider employment history, credit score, your debt-to-income ratio, and how much you plan to put down on your home when determining whether you qualify for a loan. Most lenders look for a stable employment history and a good credit score. Mortgage lenders might also want to look at your total debt (including students loans, car payments, or credit cards) and determine whether it is a manageable percentage of your pre-tax income.
One of the most common questions to ask as a first time homebuyer is whether to get a fixed rate or an adjustable rate mortgage. Fixed rate loans include an interest rate that is set when you take out the loan. Fixed rates do not change, while interest rates on an adjustable rate mortgage might change. Adjustable rates will often start out lower than a fixed rate, but could go up after an introductory period.
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Grants and loan programs for eligible first-time homebuyers are available at the local and national levels throughout the U.S. These programs make it easier for people to become homeowners through smaller required down payments, lower closing costs, and easier credit qualifying.
The exact information required may vary from one lender to another. But according to the Department of Housing and Urban Development, you should have the following information and documentation when you visit with your lender:
Ask friends or family members if they have an inspector they can recommend. If you look online, check reviews and only choose an inspector you believe will give you an honest assessment. You may be able to negotiate with the seller or cancel the sale entirely if your home inspector finds that the property needs costly repairs.
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When you rent a home, your landlord covers maintenance and repairs. But as a homeowner, you will be responsible for repairs and ongoing maintenance, like taking care of your yard and servicing your appliances. Depending on the home you buy, you may need to buy household items like a snow blower, lawnmower, sprinkler system and other tools.
Likewise, if your new home is part of a homeowners association (HOA), you may need to pay a monthly fee to your HOA. Ask your realtor if there are HOA fees tied to the property you want to buy and, if so, what expenses and services your HOA covers.
Protecting things that matter most to you, including your new home, means having the right coverage. When you close on your home, a Farm Bureau agent can work with you to determine what home insurance coverage best fits your needs and budget.
Factoring in insurance costs on your potential new home should be a top priority, as they can add a significant amount to your monthly payments. Your lender will require you to have a homeowners insurance policy, but sometimes that might not be enough to protect from the unique risks you face where you want to live.
Depending where you are, certain insurance for hazards like floods, earthquakes and hurricanes may be required. If there are no requirements in your area, make sure you assess the risk of a major disaster. This is particularly important for homes near flood zones and fault lines.
The ongoing cost of living in your home is just as important as your mortgage payments. When you look at a house, make sure you get a sense for what your monthly utilities will cost. Depending on where you live and how the house is set up, these could add a significant amount to your monthly bills.
These questions are a great resource to keep in your back pocket when looking at a home. Bring a checklist before going to a viewing or meeting with your realtor and make sure you get answers to all these important questions before negotiating on a house.
In addition to your down payment and monthly payments, you still need to pay for all the other things in life: groceries, entertainment, gas, retirement savings, and so on, not to mention the non-mortgage costs of home ownership.
The first is that knowing that history gives you an idea of some of the risks your new home might face. A history with a lot of water damage claims would be a red flag, for example. Perhaps the plumbing is defective, or the basement is prone to flooding.
Want to learn more? Visit our Home Buying, Selling and Moving resource centre for everything you need to know about real estate, buying a home, or moving. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.
Asking about the neighborhood is a big one. In fact, the quality of the neighborhood was the main reason recent home buyers (58%) chose their neighborhood.3 To give you an idea of what most home buyers care about when choosing a neighborhood, check out how these factors ranked below.
If you have specific questions about buying a house in your area, find a real estate agent. You can find a great one using our Endorsed Local Providers (ELP) program. Our ELP team finds and connects you with the best-performing agents across the nation who actually care about your budget and understand your needs.
Your real estate agent should be present at any property you view, so they can get a better understanding of what you like and dislike about the home. They can also answer many questions, as well as give you advice on whether the house is a good fit based on your wants and needs.
If you have a spouse or partner, they should attend a viewing. In some cases, you may decide to go alone to the first selections your real estate agent shows you, then narrow down the options to two or three strong possibilities. Though this seems like it would save time by eliminating homes that are an obvious no-go, seeing these poor fits can help spark important conversations with your partner about what you really want in a home. For that reason, it's ideal for both of you to look at every house.
When attending a scheduled viewing or open house, it's best if you don't bring your children. Younger kids can become bored and need attention at a time when you should be focused on looking critically at each home. Even older children should only look at the houses you deem to be front runners, as they can get excited about features that aren't on your list and then be disappointed that you didn't, for example, choose the house with the swimming pool or the loft in the kids' room.
It's important to choose homes to view that fit within your price range. Sometimes, a real estate agent may suggest you view a home that is outside of your budget but fits all your other requirements. However, if you don't have any flexibility on what you can afford, it can just lead to disappointment. Getting prequalified before looking at homes can help you narrow down your search to homes that fall within your budget.
You should also have a good idea of your preferred locations and stick close to those areas when looking for properties. While you can make updates and renovations to the house, you can't change the neighborhood.
A seller who is leaving the area to take a different job or who has outgrown the home has a very different reason for moving than someone who doesn't get along with the neighbors. Knowing why the seller is leaving can also help you know if you can negotiate the price. If the seller is highly motivated, you may have some room to make additional requests for contingencies in your offer.
Sellers are required to report if there could be lead paint in the house. And in some locations, they also need to disclose the presence of asbestos, mold and water or pest damage. If the seller doesn't know, though, they can't be expected to reveal the information. Even if you want to have a specialized inspection that tests for asbestos or other harmful materials, the seller may not permit it. For homes built during the time those materials were commonly used, you may have to use your best guess and resolve to pay if you need to remove these materials.
If additions have been made, ask about the contractor used. If a homeowner likes "do-it-yourself" projects, they may not have used the proper techniques or gotten permits for the work done. It's best to be cautious about any major work done by a homeowner who is not a licensed contractor.
Minimal water pressure can greatly diminish your enjoyment of the home and be expensive to fix. Check for water coming from shower heads and sinks. Turn on water in two areas of the home and see if that reduces flow. 041b061a72