Question 1

How big should the deposit be?

Accepted Answer

A larger deposit lowers the loan, the payment and often the rate, and can remove mortgage insurance. Weigh it against keeping a cash buffer after closing.

Question 2

Fifteen or thirty years?

Accepted Answer

Shorter terms cost far less interest but demand a higher payment. Model both and check which one still leaves room for savings.

Question 3

How much do I need to earn to buy a $300,000 house?

Accepted Answer

Lenders limit housing costs to 28% of gross monthly income. A $300,000 home with 20% down creates a $240,000 mortgage. At 7%, that's $1,597 monthly, plus roughly $400 property tax and $150 insurance—total $2,147. You need $7,668 gross monthly income, or $92,000 annually. Add existing debts (car, student loans) and the income requirement increases to keep total debt under 43% of gross income.

Question 4

Should I buy with less than 20% down?

Accepted Answer

You can buy with 3-5% down using conventional or FHA loans, but you'll pay private mortgage insurance (PMI) adding $100-300 monthly until you reach 20% equity. This makes sense if rents are rising faster than you can save, or if you plan to stay long enough that appreciation and principal payments eliminate PMI within five years. Run the numbers both ways before deciding.

Question 5

What credit score do I need to buy a home?

Accepted Answer

Conventional loans require a minimum 620 score, but you'll pay higher interest rates below 740. FHA loans accept scores as low as 580 with 3.5% down, or 500-579 with 10% down. A 100-point score difference can mean 1.5% higher interest rates—on a $250,000 mortgage, that's $250 more per month or $90,000 over 30 years. Fix credit before applying.

Question 6

How long does the home buying process take?

Accepted Answer

Pre-approval takes one week. House hunting ranges from two weeks to six months depending on market conditions and how selective you are. Once your offer is accepted, escrow lasts 30-45 days for inspections, appraisal, final loan approval, and title work. Total timeline: expect 2-8 months from first lender contact to getting keys. Winter purchases often close faster due to less competition and motivated sellers.

Question 7

Can I buy a house with student loan debt?

Accepted Answer

Yes, but student loans affect your debt-to-income ratio. Lenders add all monthly debt payments—student loans, car payments, credit cards—and require the total stays under 43% of gross income. If you earn $6,000 monthly and pay $400 in student loans, you can afford roughly $2,180 in housing costs. Pay down other debts or increase income to improve your buying power while keeping student loans.

Question 8

What happens if the appraisal comes in low?

Accepted Answer

If you offer $310,000 but the appraisal says the home is worth $295,000, the lender only finances based on $295,000. You must either bring an extra $15,000 cash to closing, renegotiate the price with the seller, or cancel using your appraisal contingency and recover your earnest money. Never waive the appraisal contingency unless you have substantial cash reserves to cover gaps.

Question 9

First time home buyer?

Accepted Answer

A first-time buyer should begin with a household budget, credit review, cash reserve, and estimate of total ownership costs. Next steps can include lender comparison, preapproval, property search, inspection, insurance, appraisal, title review, and closing. Program definitions and assistance eligibility vary, so verify requirements with the relevant provider.

Question 10

How to get pre approved for a mortgage?

Accepted Answer

Contact one or more lenders and provide requested documentation concerning income, employment, assets, debts, identity, and credit. Ask whether the lender uses a soft or hard credit inquiry and compare written terms. Preapproval remains conditional on underwriting, updated information, the selected property, appraisal, insurance, and title conditions.

Question 11

What is earnest money?

Accepted Answer

Earnest money is a deposit submitted under a home purchase agreement to demonstrate the buyer’s intent. The contract controls when it is credited, returned, or potentially forfeited. Buyers should understand financing, inspection, appraisal, title, sale-of-home, and deadline provisions before delivering the deposit.

Question 12

What is title insurance?

Accepted Answer

Title insurance protects against certain covered title defects that existed before the policy date. A lender’s policy generally protects the lender, while an owner’s policy generally protects the buyer subject to exclusions and limits. Coverage, premiums, searches, and closing practices vary by property and state.

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