Buying a home is likely the largest financial decision you will make. With so many things to consider we know there are many questions, so we’ve answered a few of the most frequently asked first-time homebuyer questions here.
Why should I buy a house?
A home is an investment. Every month you pay your mortgage you are building your net worth. Helping to increase your net worth is the fact that your home will also likely increase in value with time. You can also deduct your mortgage payments from your federal income taxes.
Am I ready to buy a house?
There are many elements to consider when deciding if you are ready to buy your first home. Having a steady income for the foreseeable future is essential, as well as making sure you you can afford your monthly mortgage payments and all the other expenses that come with owning a home. It will help to have some money saved for upfront expenses as well. Another point to consider is your credit score, which is something you can always work to improve.
How does my credit score impact my mortgage?
Your credit score is a summary of your credit history and gives mortgage lenders an idea of your financial standing. If you have a higher credit score you may be able to qualify for better mortgage rates. You can always work to improve your credit score by reviewing any possible errors, paying bills on time and keeping low balances on credit cards.
How much do I need for my down payment?
Saving for your down payment is an important part of planning to buy your first home. While it’s true that with a 20% down payment you will not have to pay for mortgage loan insurance, you can still buy a home without putting 20% down. In fact the average down payment for first-time homebuyers is 6%. There are loan programs that will make it possible for you to buy a home with even less money down, such as FHA, VA, USDA, and conventional. You may qualify for down payment assistance grants, which are offered at the state and local level.
What other upfront costs do I need to consider?
The down payment is only part of your upfront costs when buying a home. Closing costs, which run between 2% and 5% of the value of your mortgage, include property taxes, mortgage insurance and more. You might also consider moving costs, any repairs the new house may need, or furniture you would like to buy right away.
What monthly costs do I need to consider?
Buying a home also shifts your monthly costs. You should plan for your mortgage, utilities, and also for property taxes. Ideally, you want to keep these costs below 30% of your household’s total gross income. Keep in mind any other expenses your new home will bring, such as lawn maintenance and general home maintenance costs.
Our mortgage bankers are always available to answer any questions you have. With years of expertise and knowledge of the ins and outs of home financing, they are here to advise you on all things related with your home loan, including the best mortgage option for you and your family!
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At Resource Financial Services, we love making people’s dreams of home ownership a reality. Visit us online today at rfsmortgage.com to get started. Then contact a Resource Financial Services mortgage banker at 877.797.4545 to discuss your mortgage options and your financial goals. Let us walk you through the process and welcome you home to a better mortgage.