Five Most Common Questions First-Time Homebuyers Have
Buying your first home can be very stressful time as it is likely the largest decision you have made in your life. That being said, first-time homebuyers should have a lot of questions when buying their first home. In our experience, the following questions are some of the most commonly asked by first-time homebuyers.
What is the benefit of buying, as opposed to renting?
Buying a home is an investment. When you write a check to pay off your mortgage every month, you are essentially investing it in the home. Over the years, there is a chance the value of your property will rise, increasing the value of your investment. Whereas with renting, you never see a cent of your monthly rent check again.
In addition to investing in your future, you are able to deduct the cost of mortgage loan interest and property taxes from your federal income taxes, helping you to save additional money.
How much money will I need to buy a home?
The exact amount of money you will need to buy a home depends on the type of loan you end up choosing. You can, however, expect to pay the following three costs at the closing:
- Down payment – a percentage of the home’s price (determined by type of loan chosen)
- Closing costs – costs associated with processing paperwork
- Prepaids – costs such as Property Taxes, Homeowner’s Insurance, and Mortgage Interest
Keep in mind, there are additional costs that will need to be paid for in advance. Some of these costs include: appraisals, home inspections, and earnest money. Earnest money is the deposit you make when you submit an offer on a home. After your offer is accepted, the amount gets credited to your cash at closing.
How do I know if I can even get a loan?
If you are uncertain whether you can obtain a loan or are unsure of how much you will be approved for, use our online calculators. There are many mortgage calculators available online, but ours have been tailored to Omaha’s specifications, making them the most accurate for your needs.
After calculating your rates, you can even begin the prequalification process on our website!
How do I find a lender?
You should treat shopping for a loan just like any other large purchase. If you take the time to shop around, you will most likely end up saving money. Not all lenders are able to offer the same interest rates, meaning you shouldn’t just go with the first one you meet with.
Take some time to consider all the factors of a mortgage. Price is important, but so is the quality of customer service.
What do I need to actually apply for a mortgage?
In order to apply for your mortgage you will need several documents, including:
- Two years of federal tax returns
- Two years of W-2 forms
- Paycheck stubs for the past 30 days
- Checking and saving account statements for the past two months
- Last quarterly retirement and investment statements, including:
- Mutual funds
- Copy of your driver’s license