Top 20 Questions First-Time Homebuyers Must Have Answered
Buying a home is one of the most exciting moments of your entire life, yet at times, it can be frustrating. To put you at ease, we’ve assembled 20 questions that first time home buyers ask with quick answers to your questions.
1. What Does My Credit Score Have To Be?
Typically, your credit score has to be at least a 580 to qualify for a loan with a 3.5% discount, according to the FHA website. If your score is less than 580 you may still qualify for a loan with a 10% down payment.
2. What Type of Loan Should I Get?
Here are four types of loans for first-time buyers. Choose the best for you.
- FHA LOAN: You have to have a credit score of at least 580 and you will be required to pay a 3.5% down payment. If your credit score is between 500 and 579, you may still qualify with a 10% down payment.
- VA Loan: This type of loan can be very helpful being that it is 0% down if you qualify.
- USDA Loan: You have to have a credit score of at least 640 and a stable income. If you qualify, there is no money down.
- Conventional Loan: You have to have at least a 620 credit score and you only have to put 3% down.
Remember this – The bigger the down payment, the lower the interest rate and lower the monthly mortgage payment. However, even a small down payment stops you from renting, allows you to buy a home sooner, and start building equity.
3. How Much Would I Have To Put Down?
It depends on your credit score and which loan you choose. However, the down payment could be anywhere from 0% to 20% of the home’s listing price. Be sure to speak with a professional to determine the best route for you. Our team at MEGG Homes can refer you to some of Polk County’s best professionals when it comes to mortgage loans. Feel free to send an email to [email protected] if you’d like us to give you some recommendations.
4. What Is The Current Interest Rate?
Interest rates change pretty regularly. It’s important to check periodically. Check out Bankrate’s website to compare today’s mortgage rates in Florida. Again, we can always get you in front of the right professional here in Polk County to help get you pre-qualified to see exactly what loans you would be able to receive and how much you can afford.
5. Is There Assistance For Down Payments?
Yes, there are several different programs available. Be sure to reach out to us if you’d like information on the current programs available in Florida for first-time homebuyers.
6. Would I Be Able To Pay Off A Loan Sooner Than The Contract Length?
You can pay off your loan early, but some lenders may charge a prepayment penalty. However, did you know this – by paying one extra mortgage payment a year, you could pay off a 30-year loan 7-years early.
7. Should I Work With Multiple Agents?
We believe working with more than one agent can confuse things for you both. This is why it’s important to choose your agent wisely and express your wants and needs clearly. At MEGG Homes, we currently have homes for sale on the market all throughout Polk County that we have restored and updated to fit the ever-changing needs of homebuyers. Be sure to check out what we currently have on the market here.
8. How Can I Choose The Right Agent?
An in-person meeting may be best when deciding on an agent. Be sure to read their reviews, see how many homebuyers they have worked with, and if your personality fits well with theirs.
9. How Soon Can I Start Looking At Houses?
A great first step is going to open houses or attending virtual open houses on places like Facebook or Instagram. Once you’ve realized you’re a little more serious, it’s in your best interest to start interviewing agents and get pre-qualified so you know exactly what you can afford and what loans you can receive.
10. Am I Responsible For Paying The Agent?
There will be closing costs when you purchase a home. Part of those closing costs goes to the agent who helped you throughout the buying process. Typically, you can see commission fees anywhere from 3% to 6% of the home’s sale price.
11. How Much House Can I Buy?
This is calculated by using your income, debt, and expenses. There are plenty of mortgage calculators on the internet that provides you with an estimate of how much you can afford. However, note that these are estimates and not as accurate of representation that a mortgage lender can get you. We’d recommend speaking with a lender to determine the actual amount that you can afford.
12. What Documents Do You Need To Submit?
The main documents you will need to provide are proof of income and proof of assets. However, there are other documentations that an agent should be able to help you organize throughout the process.
13. How Much Employment History Do I Need To Provide For A Loan?
Some lenders want buyers to have a two-year work history at the same job. Some require less.
14. How Many Years Of Tax Returns Do I Need To Provide?
Typically, two years of tax returns are usually required to obtain a mortgage.
15. Can I Get A Loan Without My Spouse?
Yes, but your spouse’s finances and a credit will not count towards the purchase. If you both have good credit and reliable income, it may make more sense to get qualified using both you and your spouse’s finances.
16. How Do I Obtain A No Documentation Loan?
You will have to provide bank statements to prove you can repay the loan and pay a 10% down payment. Tax returns will not be required with this.
17. Can I Pay Cash Instead?
Yes, you can. If you’re interested in paying cash for your first home, be sure to let your agent know that you want to pay cash during your first conversation. This will allow them to potentially seek out better deals on homes.
18. What If I’m Self Employed?
This can be a little unique at times depending on how you claim your income. However, if you can prove consistent income this is no problem.
19. How Does Escrow Work?
The lender sets up an account where a portion of your mortgage payment will be saved to be used to pay your property taxes and insurance bills.
20. How Soon Can I Close?
It usually takes about 45 days to close. Some buyers have closed in 10 days.
We Hope We’ve Made You Feel At Ease!
MEGG Homes is dedicated to making every first-time homebuyer be comfortable throughout the buying process. Feel free to reach out with any questions and check out some of the homes that are currently available for sale in cities throughout Polk County like Bartow, Lakeland, Eagle Lake, Auburndale, and Plant City.