Quiz: How Much Do You Know About Buying A Home
If you think you are ready for a new home, first take our quiz to see if it's time to make the move into a new home.
How much do you know about buying a home?
1. What should you do first before starting to shop for a house?
a. Find houses you like online first to see if there are options for you.
b. Start picking out furniture that you would like to have in your new home.
c. Check your credit score.
Answer: The correct answer of course is to check your credit score. Along with checking your credit score, be sure to already start the process of working with a lender if you are looking to get a loan. You will want to be pre-approved, not just to have a pre-approval letter to submit with any offer, but to ensure you are comfortable with your monthly mortgage payments.
2. As we talked about earlier, it's important to know how much you are comfortable paying for a home and what you are pre-qualified for. What status gives you the upper hand with a seller once you find the house you want to make an offer on?
a. Pre-Approval Letter from Lender
b. Cash offer at a discount lower than asking price
c. Pre-Reviewal Letter from Lender
Answer: You will want to provide a pre-approval letter with any offer you submit so that the seller knows you are a pre-qualified buyer who is serious about the house they are selling. Just because someone can pay cash for a home, does not always mean that the seller will accept it at a discounted price. It's important to always back up your offers with the pre-approval letter from the lender.
3. What is amortization?
a. Not being qualified for a loan.
b. Needing a second mortgage for your home.
c. Paying off the prinicpal of a loan gradually.
Answer: Amortization is the process of paying off the principal of a loan in incremental payments gradually decreasing the principal.
4. How much should you put down for a down payment to avoid having to pay additional mortgage insurance?
Answer: Putting less than 20% down payment means that you will also have to pay mortgage insurance. To save you monthly costs, try and put at least 20% down. The more you can put down on your initial down payment, the better.
5. How much should you plan to put aside to pay for a home inspection?
c. over $1000
Answer: First and foremost, inspections are well owrth the costs involved. You will most likely pay between $150-$550 for the inspection based on the square footage of the home and what all you are inspecting. Remember it is important to get price quotes from several inspectors and be sure to ask them to provide you with a full report on their findings.
If you correctly answered these questions, you may be ready to purchase a home. Call us today and we will guide you through the home buying process.