Laurel Caylor

Answer: No, this is a common misconception! While a 20% down payment can help you avoid private mortgage insurance (PMI), there are many loan programs available for first-time buyers that require much less. For example, FHA loans require as little as 3.5% down, and some VA or USDA loans offer zero-down options. Your real estate agent can help you explore programs that fit your budget.

Answer: A good rule of thumb is to get pre-approved for a mortgage before you start house hunting. Lenders will evaluate your income, debt, and credit score to determine how much you can borrow. Additionally, consider your monthly budget, including property taxes, insurance, and maintenance costs. Your real estate agent can connect you with trusted lenders to guide you through this process.

Answer: No! A real estate agent’s services are typically paid for by the seller, not the buyer. Having an agent on your side ensures you have expert guidance, negotiation skills, and access to listings that may not be publicly available. They can also help you avoid costly mistakes.

Answer: Pre-qualification is a preliminary estimate of how much you might be able to borrow, based on self-reported financial information. Pre-approval, on the other hand, involves a thorough review of your finances by a lender and provides a more accurate picture of your buying power. Sellers often prefer buyers who are pre-approved because it shows you’re serious and financially ready.

Answer: Not necessarily! Older homes can offer charm, character, and often more affordable prices. However, they may require more maintenance or updates. A home inspection is crucial to identify any potential issues. Your real estate agent can help you weigh the pros and cons of older versus newer homes based on your needs and budget.

Answer: While a higher credit score can help you secure better interest rates, it’s still possible to buy a home with less-than-perfect credit. Some loan programs, like FHA loans, are designed for buyers with lower credit scores. Your real estate agent can recommend lenders who specialize in working with first-time buyers in your situation.

Answer: Closing costs are fees associated with finalizing your home purchase, such as loan origination fees, title insurance, and appraisal costs. They typically range from 2% to 5% of the home’s purchase price. Your real estate agent can provide a detailed estimate and help you negotiate with the seller to cover some of these costs.

Answer: It depends on your financial situation and long-term goals. Buying a home builds equity and offers stability, while renting provides flexibility and fewer maintenance responsibilities. Your real estate agent can help you analyze your options and determine if buying is the right choice for you.