6 Big Questions Answered for First-Time Homebuyers
Questions about what it means to purchase a home for the first time? Not sure what "being in escrow" means?
Here are 6 big questions most homebuyers have when beginning the homeownership process:
1. What does my mortgage cover?
Mortagage payments typically cover:
Principal and interest
2. What is escrow?
Escrow, in the real estate world, is used when speaking on behalf of the sale and purchase of a home. It means you're using a neutral, third party to ensure that everybody sticks to their end of the home buying/selling process. An escrow company will usually provide this service.
3. How much house can I afford?
Affordability is a large concern for most first-time homebuyers. Consider a few items, such as your debt-to-income ratio, annual income, down payment, and talk to your credit union about pre-qualification.
4. What are the unexpected costs associated with the purchase?
Closing costs. On average, closing costs can range from 2-5% of the home's purchase price. Closing costs are calculated after you apply for the mortgage and can cover:
-Loan origination fees
-Home and pest inspections
-Appraisal of the home
-First payment of property taxes and mortgage insurance
5. How do I know my investment in homebuying is worth it?
There's a lot to consider when purchasing a home, but location and price are the two most desired on the "Dream Home" checklist. After finding the perfect location and knowing your price range, make sure to bring a home inspection checklist with you to ensure the investment is worth it.
A few highlights of a home inspection checklist should include:
-Roof/Attic. Check for missing shingles on the roof, signs of leaks, when the roof was last repaired or replaced.
-Foundation. Make note of any visible cracks on the foundation and if there are any trees near it that may cause future foundation concerns.
-Appliances. Ask about the age of any included home appliances and investigate any potential leaks near each appliance.
-Previous damage. Ask about the history of the home with consideration to any previous fires, ventilation or heat/AC issues, and if there are any problems with the plumbing or electric.
6. What are my rights as a buyer?
Home buyers have certain rights as defined by state and federal laws. To learn more about home buyer's rights in your state, consult a real estate attorney.
Don't be afraid of the home buying process! Get more information on first-time homebuying in our Home Loan Basics section of our website.
Ready to shop for a new home? Just thinking about it? Check out HomeAdvantage to help you search, buy, sell, and save! This program is powered by CU Realty Services and gives you all the tools you need to start the homeownership process.
Questions about the homeownership process? Contact one of our mortgage loan officers or call our Member Contact Center at 1-877-325-2848.