1. How much home can I afford?
Your affordability depends on income, debts, credit score, and available funds for a down payment. A lender will evaluate your financial profile and provide a price range based on your debt-to-income ratio (DTI)and loan program.
2. What is a pre-approval and why is it important?
A pre-approval is a lender’s written estimate of how much you can borrow. It strengthens your offer by showing sellers you are financially qualified and ready to proceed.
3. How much do I need for a down payment?
Down payments typically range from 3% to 20% depending on the loan type. Some programs allow lower down payments, especially for first-time buyers.
4. What are closing costs?
Closing costs include lender fees, title insurance, escrow fees, and prepaid items like property taxes and insurance. These generally range from 2% to 3% of the purchase price.
5. What is earnest money?
Earnest money is a deposit showing your serious intent to purchase. It is typically 1%–3% of the purchase price and is applied toward your closing costs or down payment.
6. How long does the home buying process take?
From offer acceptance to closing, it usually takes 30–45 days, depending on financing, inspections, and appraisal timelines.
7. What is a home inspection?
A home inspection is a professional evaluation of the property’s condition, including structure, systems, and safety. It helps identify potential issues before finalizing the purchase.
8. What is a termite (pest) inspection?
This inspection checks for wood-destroying pests or damage. In many transactions, this is a standard requirement, especially in certain regions.
9. Can I negotiate repairs or price after inspections?
Yes. Based on inspection findings, you can request repairs, a price reduction, or seller credits.
10. What is an appraisal?
An appraisal is conducted by a licensed appraiser to determine the home’s market value. Lenders require it to ensure the property supports the loan amount.
11. What happens if the appraisal comes in low?
You may renegotiate the price, pay the difference, or cancel the contract depending on your contingency terms.
12. What is escrow?
Escrow is a neutral third party that holds funds and documents until all conditions of the sale are met, ensuring a secure transaction for both buyer and seller.
13. What are contingencies?
Contingencies are conditions that must be satisfied before closing, such as financing, appraisal, and inspection approvals. They protect the buyer’s interests.
14. Do I need homeowners insurance?
Yes. Lenders require proof of homeowners insurance before closing to protect the property against damage or loss.
15. What is title insurance?
Title insurance protects against ownership disputes, liens, or claims against the property’s title.
16. Should I lock my interest rate?
Rate locks protect you from interest rate increases during the loan process. Your lender can advise on the best timing.
17. What should I avoid doing during escrow?
Avoid making large purchases, opening new credit accounts, changing jobs, or moving money without consulting your lender, as these can impact loan approval.
18. When do I do the final walkthrough?
The final walkthrough is typically done a few days before closing to ensure the property is in agreed-upon condition.
19. When do I get the keys?
You’ll receive the keys after the transaction records with the county, usually on the closing day or shortly after.
20. Why should I work with a real estate agent?
An agent provides market expertise, negotiates on your behalf, manages paperwork, and helps guide you through the entire process.
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