New home buyers usually have a lot of questions about the buying process. This is perfectly normal, so don’t worry if you’re looking for answers. The truth is, there is a lot of information out there and some of it is not very helpful.
One of the advantages of working with a College Station realtor is that you can get answers from a local perspective. Real estate markets can vary quite a bit from place to place so it’s good to know that you can get a recommendation based on your area.
If you have questions, talking with your realtor can be very helpful. But if you need some info in a hurry, this article will explain the answers to three common real estate questions that you might encounter as you shop for a new home.
#1 – Do I Need A Perfect Credit Score?
Many people worry about their credit health when they are shopping for their new home. Some people assume that their credit is not nearly good enough to get a decent rate on a home loan.
It’s a fairly common myth that you need perfect credit to get a home loan. If this were the case, then very few people would ever qualify! The truth is that, yes, a good credit score can really help you out in terms of getting a good interest rate on your loan. However, it’s not necessary to have a great score to move into your new house.
Home lenders will study your credit history before offering you loan terms. If you have a very high score, such as 700+, you may be able to get a loan with a smaller down payment and a lower interest rate over a 15 or 30-year loan. If your score is a bit lower, about 500-600, you may not qualify for these perks.
However, you can still find a reasonable loan at a decent rate. You may have to do some comparison shopping but the time will be well worth it.
#2 – How Much Do I Need In Savings?
Let’s be honest, moving can be pretty expensive. Not only do you have to make a down payment that can be 10% or more of the total house cost, you will also need cash for hiring movers, putting items in storage or furnishing your new home. These costs can quickly add up.
A good rule of thumb is to always have three months worth of your salary saved up. This is a general rule that will help you take care of things in case something unexpected happens, like the loss of a job or an sudden illness.
It’s also a good rule for house purchases. Calculate how much you’ll need to cover house payments, utility bills, groceries and gas for three months. That will give you a good number to shoot for. If you have this much stored away, you’ll be able to cover your down payment and your first few months of bills while you adjust to a new home. It’ll also give you a cushion if unexpected expenses pop up (they almost always do).
If you need extra cash, have a huge garage or yard sale. You’ll make a few bucks and get rid of unneeded clutter, which will help you save on moving and storage costs.
#3 – How Much Should I Put On My Down Payment?
Making a larger down payment can help you save on monthly interest payments. It might also give you the flexibility to take a shorter-term loan. However, this may not be the best choice for everyone.
Down payments can range from 3% to 20%. Your credit score and your income will play a large payment in what kind of down payment you have.
Make sure that you consult with several lenders and carefully calculate your projected income over the next few years. There is no hard-and-fast rule about the size of your down payments, so make sure you talk to a financial professional about this issue.
Buying a new home can be stressful but it can also be exciting. Take off some of that stress by studying these answers and talking to your College Station Realtor and financial professionals