How much do you expect to pay monthly for your house? How much will the closing costs actually be? How much is the down payment? Can you qualify for a loan? These are all crucial questions you should be asking a lender before you even start searching for a house!

What is your actual budget?

There is a difference between the maximum payment a buyer can qualify for and the amount a buyer is comfortable paying. Tax deductions, property taxes and many other things can help offset a mortgage payment that is higher than previous rent. Talking with a lender can help you lay out a plan where you are not drowning in payments.

What is a closing cost?

Closing costs are fees charged by lenders and third parties for paperwork, credit reports, etc. that vary based on where you live and the property you buy. Typically homebuyers pay closing costs between 2 and 5 percent of the price of their home. Closing cost fees are explained in more depth in this article. 

What will the down payment be?

Your own money (in addition to your loan) that you provide up front when buying a home is considered a down payment. Usually homebuyers are required to contribute 3-20% of the selling price of the home. The importance of the down payment amount varies but can majorly affect how much you need to borrow. A good rule to remember is the bigger the down payment (money up front); the less you have to borrow making your monthly payments lower. If you aren’t able to save for a minimal down payment (3-5%), you might want to reconsider whether you are financially ready to own a home.

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The first step to getting these questions answered is finding a lender that you trust. New Home Resource recommends Premier Mortgage Lending using Cheryll Acevedo as the “go-to person” to talk to. It is important to know your options because there are many qualifications you need to meet and processes to go through when you are buying a house, especially for the first time!