Answers to Simple Questions for First-Time Homebuyers
Are you in the market to buy a home? Whether it’s your first time or you’ve forgotten the details, here are some simple answers to common questions.
Are There Programs for First-Time Homebuyers?
First-time homebuyer grants, also known as down payment assistance (DPA) programs, may be available at the state or local level. These programs can help cover all or part of your down payment and closing costs, providing actual savings for first-time homebuyers. One study estimated that buyers using down payment assistance saved almost $6,000 at closing, on average, and another $11,000 over the life of their loans.
How Long Does It Take to Buy a Home?
From the start of searching online to the closing, buying a home takes about 6 to 10 weeks. Once a home is selected, and the offer is accepted, the average time to complete the escrow period on a home is 30 to 45 days (under normal market conditions). However, well-prepared homebuyers who pay cash have been known to purchase properties faster.
What Is a Seller’s Market? What Is a Buyer’s Market?
In a seller’s market, increasing demand for homes drives up prices. Conversely, a buyer’s market is characterized by declining home prices and reduced demand.
What Kind of Credit Score Do I Need to Buy a Home?
Most loan programs require a FICO score of 620 or better, but some lenders can go as low as a score of 580. Borrowers with higher credit scores typically have lower down payment requirements and better interest rates. Conversely, home shoppers with lower credit scores may need to bring more money to the closing table to offset the lender’s risk.
What’s Considered a Good Credit Score for a Mortgage?
Credit scores in the “excellent” range (720 or more) usually access the most favorable loan programs and lowest rates. For reference, credit scores have generally been classified as:
- Excellent: 720 or more
- Good: 680 to 719
- Fair: 620 to 679
- Poor: 619 or less
How Much Do I Need for a Down Payment?
First-time homebuyers usually only put down 3 to 5% on a home. Several first-time homebuyer programs don’t require big down payments. For example, a longtime favorite, the FHA loan, requires 3.5% down. What’s more, some programs allow down payment contributions from family members in the form of a gift.
Which Type of Home Will Best Suit Your Needs?
You have a number of options when purchasing a residential property: a traditional single-family home, a duplex, a townhouse, a condominium, a co-operative, or a multifamily building with two to four units. Each option has its pros and cons, depending on your homeownership goals, so you need to decide which type of property will best suit your needs.
What Is the Difference Between a Realtor and a Real Estate Agent?
The most significant difference between a real estate agent and a Realtor comes down to the certifications for each. You may have heard the terms used interchange