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Buying your first house is an exciting endeavor. It can be also somewhat overwhelming. After all, a home is a major investment that requires some crucial, long-term decisions. Asking the right questions is a great way to make the decision-making process smoother.
This guide presented by Moving Help® will highlight some key questions to ask when buying a house. These questions should help you understand more about your budget, the mortgage approval process, and what type of home fits your needs.
7 Questions to Ask Yourself Before House Hunting
1. How Much Can I Afford Monthly?
Start by examining your debt-to-income ratio. Most lenders consider a DTI ratio of 36-43 percent good (the lower the better). Then, calculate 28-31 percent of your gross monthly income to get an estimate of a monthly payment you can afford.
2. How Much Do I Need for a Down Payment?
Down payments are typically around 20 percent of the home cost. As a first-time buyer, you may qualify for as little as 3 to 5 percent. Keep in mind, the size of your down payment directly decreases or increases your monthly mortgage and loan amount.
3. What Type of Location Is Right For me?
Determine what location factors are most important to you. If you have a family or are looking to start one, you may value good schools, lower crime rates, and nearby parks. If you’re a single person, you may prioritize things to do, proximity to work, and nightlife.
4. Do I Want a Move-In-Ready Home or a Fixer-Upper?
If you’re handy, a home that needs significant repairs can help you save money, albeit with plenty of work and some financial investment. On the other hand, a home that’s ready for you to move in today often costs more upfront but offers convenience and comfort.
5. What Is My Credit Score? Is It High Enough?
Mortgage lenders look at your credit score to determine your loan eligibility. A higher score can help you secure a loan easier with lower interest rates and a lower monthly payment. Conventional loans typically require a minimum score of 620, for starters.
6. Do I Have Enough Money to Buy a Home?
This may be tough to answer, considering many factors that exist. In general, you want to check these boxes:
- 36 to 43 percent DTI ratio
- 2 to 5 percent for closing costs
- 3 percent for a down payment
- 28 to 31 percent of gross monthly income for monthly payment
7. Am I Truly Ready to Own a Home?
Homeownership has plenty of perks, but it’s not for everyone. Keep in mind that all the costly home repairs and maintenance are your responsibility as the homeowner. It’s important to consider whether you’re ready to take on that burden.
Learn more about whether it’s better to rent or buy a house.
6 Questions to Ask the Seller While Touring Homes
1. What’s the Reason for Selling?
This is a crucial question. After all, you don’t want someone else’s problem. Major red flags to look for are noisy/disrespectful neighbors, nearby businesses that are a nuisance, and underlying issues with the home itself, like a bad foundation or disaster risk.
2. How Long Has the Home Been on the Market?
This is another question that can help you determine if a house has unseen issues. If it’s been on the market for a long time — three months or more — there’s a good chance other buyers have noticed something they didn’t like, so keep that in mind.
3. How Old Are the Major Appliances?
Major appliances like the HVAC unit, water heater, refrigerator, washing machine, dryer, and dishwasher are not cheap to replace. If you’re buying a home with aging appliances, just know that you’ll likely have to repair or replace them sooner than later.
Pro tip: Ask about warranties on these major appliances. Many manufacturers offer multi-year warranties that can be carried over after you purchase the home.
4. How Old Is the Roof?
A well-maintained roof can last for 15 to 25 years. A roof near that age is more likely to require costly repairs in the near future and may lead to interior damage caused by leaks. If the roof is too old, you might even have trouble finding homeowners insurance.
5. What Are the Average Property Taxes and Utility Costs?
Answering this question can help you budget a little further. Plus, high utility costs can give you an extra glimpse into the home’s condition. High electric bills might mean poor insulation, and high water bills might indicate leaky pipes.
6. What’s Included in the Sale?
Not every home sale includes the same things. For example, some sellers don’t include their major appliances. As a first-time buyer, there’s a good chance you need these items. Be sure to find out what exactly is included in the sale.
5 Bonus Questions to Ask When Buying a House
1. Should I Get a 15-Year or 30-Year Mortgage?
Thirty-year mortgages offer a lower monthly payment, which is why they are the most common.
A 15-year mortgage, however, can save you thousands of dollars in interest in exchange for a higher monthly payment.
2. Which Type of Mortgage Should I Apply for?
You can choose from a handful of mortgage loan types:
- Conventional Fixed-Rate: The most common option for buyers who have a stable income looking for a stable monthly payment.
- Conventional Adjustable-Rate: Better for buyers who plan to sell when interest rates change or need a lower payment.
- FHA Loan: Better for buyers with a low credit score who can’t qualify for a conventional loan.
- VA Loan: For qualifying buyers who served in the military. It often requires no down payment.
- USDA loan: For qualifying buyers buying a home in a qualifying USDA-designated rural area (rarer than others).
3. What Type of Mortgage Rate Can I Get?
Mortgage rates fluctuate based on factors like your credit score, the market, and the lender you’re working with to secure a loan.
Consider getting pre-approved from two to three lenders so you can shop for the lowest interest rate you can get.
4. How Long Does It Take to Buy a Home?
A financed purchase typically takes 30 to 45 days to close, depending on the appraisal, underwriting, title work, and any required repairs or contingencies, such as inspection, financing, and appraisal contingencies.
5. What Steps Are Involved in the Homebuying Process?
Each closing is different, but in general, you can expect the following steps:
- Getting pre-approved for a mortgage loan.
- Finding a real estate agent.
- Finding a home and submitting an offer.
- Getting a home inspection.
- Putting together your documentation.
- Finalizing the closing.
- Getting your keys and moving in.
Move Into Your Dream Home Today
You won’t have many life events more satisfying than getting the keys to your new home, especially as a first-time buyer. It’s a major milestone that you should be proud of in life.
When the time comes, you can make the process even more enjoyable by booking labor-only Moving Help. While you open a celebratory bottle of champagne and compare paint swatches, your Moving Helpers will do the heavy lifting for you!
