Homebuyer Questions
Clear Answers for Your Homebuying Journey
Explore straightforward answers about preparation, affordability, credit, mortgage options, offers and closing. The details of your transaction may vary, but knowing what to ask is a strong place to begin.
- 29 years of mortgage experience
- Plain-language answers
- Guidance from preparation through closing
Begin With Context
Why Can the Answer Differ From Buyer to Buyer?
Mortgage options and homebuying costs depend on the borrower, property, loan program, location, market conditions and purchase agreement. General rules can provide direction, but they cannot replace a review of the actual transaction.
Eligibility, approval, rates, payments and costs depend on the information reviewed and the requirements that apply at that time.
Getting Started
What should I do first if I want to buy a home?
Start by reviewing your goals, complete monthly budget, available funds, recurring debts, credit profile and expected purchase timeline. Then discuss potential financing options before focusing on individual properties.
What is the difference between prequalification and pre-approval?
A prequalification may be based largely on information you provide and may involve limited verification. A pre-approval generally involves a more detailed review of financial and credit information.
Processes and terminology vary by lender. Neither one is final loan approval or a guarantee of particular terms.
How long does the homebuying process take?
There is no universal timeline. Preparation, the home search, negotiations, inspections, appraisal, underwriting and closing can all affect how long the process takes.
Money and Affordability
Do I need a 20% down payment?
No. Some mortgage programs permit lower down payments, while certain eligible borrowers may have access to no-down-payment options. A lower down payment can affect mortgage insurance, monthly payment, rate and overall loan cost.
How much money do I need beyond the down payment?
Plan for closing costs, prepaid expenses, initial escrow funding, inspections, appraisal, moving expenses, immediate repairs and the savings you want to retain after closing.
What can be included in the monthly housing payment?
The complete payment may include principal, interest, property taxes, homeowners insurance and mortgage insurance. HOA dues and other property costs may be paid separately but still belong in the household budget.
Credit and Financing
What credit score do I need to buy a home?
There is no single score that applies to every mortgage. Requirements vary by loan program, lender and the complete application. Credit can affect eligibility, interest rate, mortgage insurance and overall financing cost.
Should I pay off debt or close accounts before applying?
Not automatically. Paying off, transferring or closing an account can change available funds, monthly obligations, utilization and the credit profile. Review the potential effect before making a major change.
Are first-time buyers limited to one type of mortgage?
No. Depending on eligibility and the property, a first-time buyer may consider conventional, FHA, VA, USDA or other specialized financing and assistance programs.
Offer Through Closing
What is earnest money?
Earnest money is a deposit that may accompany an offer to show the buyer’s intent to complete the purchase. How it is handled depends on the contract and applicable rules. If the purchase closes, it is generally credited toward transaction amounts.
Is an appraisal the same as a home inspection?
No. An appraisal provides an opinion of property value for the mortgage process. A home inspection evaluates accessible property conditions within the inspector’s scope. One does not replace the other.
What financial changes should I avoid before closing?
Avoid opening new credit, financing large purchases, moving money without documentation or making unreviewed employment, income, asset or debt changes. Report material changes promptly.
What should I review before signing at closing?
Review the final loan terms, interest rate, payment, closing costs, Cash to Close, escrow information and other documents. Ask about anything that differs from what you expected before signing.
Before You Act
Ask How a Decision Affects the Complete Plan
- How will it change the monthly payment?
- How will it change the cash needed at closing?
- Could it affect eligibility, pricing or documentation?
- Does it leave enough savings after the purchase?
- Is the decision based on verified information or an assumption?
Explore the Details
Go Deeper With a Homebuyer Guide
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Ready to Talk About Your Homebuying Plan?
Start with a conversation about your goals, available funds, payment priorities and expected timeline so your questions can be considered in the context of your complete plan.