Buying a home can be overwhelming and confusing. To help simplify the process, make sure you can answer these questions:
How Much Do You Prequalify For?
It’s all too common to see first-time homebuyers house hunting without getting preapproved. This can cause some serious issues. First, if you’re looking at houses outside of your price range, it can easily lead to dissatisfaction. Second, it wastes your time. Most sellers won’t even look at bids from prospective buyers who aren’t preapproved.
What is Your Credit Score?
Your credit score is one of the crucial factors a lender will use to determine if you are eligible for a mortgage loan. Your credit score also affects the interest rate you can secure. If you don’t know your credit score, you’ll want to find it out ASAP. Make sure to take a close look at your credit report to identify any mistakes or discrepancies that might be affecting it. By addressing these, you may raise your credit score and improve your interest rate.
How Much Will Your Closing Costs Be?
It’s not uncommon for closing costs to stun borrowers. At three to five percent of the total home price, closing costs can be a substantial chunk of change. If you’re not prepared, finding the necessary cash can be difficult.
The key is to discuss closings costs with your loan officer from the very beginning. The final dollar amount of your closing costs can fluctuate by no more than 10 percent. However, knowing the estimated cost up-front can allow you to prepare for it or discuss alternatives, such as including your closing costs in your monthly payment.
Who is Responsible for Paying Your Closing Costs?
As the buyer, you don’t automatically have to pay closing costs. Sometimes the seller will agree to assume some or all of the closing costs in order to close the deal. Be sure to communicate with the buyer from the very beginning about who will assume responsibility.
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