Buying your first home can be a bit overwhelming, and it’s completely normal to feel unsure about how everything works. So don’t be shy about asking your lender or realtor questions. This can make the process smoother, as well as ensure you’re making choices that work for you.
Here are five questions we hope first-time homebuyers will ask:
Do you offer any in-house loan programs?
Mortgage programs aren’t one-size-fits-all and can vary based on your specific circumstances and needs. That’s why it’s important to ask whether the lender offers any in-house loan programs that are exclusive to them.
Take FirstBank Mortgage, for example. We work to make homeownership more affordable by offering temporary buydown programs, flexible credit score requirements and zero down payment options. All of this is designed to help you get into a home more easily.
Also, don’t forget to ask about local programs. Many states and local governments offer help for first-time homebuyers, like down payment assistance or flexible loan terms.
Knowing both in-house and local options will help you make the best choice for your new home.
What is my total budget, including hidden costs?
When figuring out your budget, it’s important to think beyond just the price of the home. Ask your lender for an estimate that includes estimates for all expenses like property taxes, closing costs and other lender or third-party fees.
Knowing these costs upfront can help you avoid buying a house that’s out of your price range.
Staying within your budget, however, gives you more financial flexibility, making it easier to cover unexpected expenses and enjoy your home without feeling stressed.
What type of mortgage is best for me?
Remember, different mortgages are made for different types of buyers, so choosing the right one depends on your needs and how long you plan to stay in the home.
A fixed-rate mortgage keeps your payments the same for the entire loan, which is ideal if you plan to stay long-term.
An adjustable-rate mortgage (ARM) starts with a lower rate, but it can go up over time, making it a good choice if you only plan to stay for a few years.
Government-backed loans like FHA, USDA and VA are available for buyers with smaller down payments. USDA loans are for homes in eligible rural areas, while VA loans are for active duty, veterans or surviving spouses.
What are current interest rates, and how do they affect my monthly payment?
It’s important to understand how interest rates impact your monthly mortgage payment.
A higher interest rate means higher monthly payments. So, if rates are high, some buyers may choose a rate buydown or an adjustable-rate mortgage to save money upfront. But these options can be risky because the rate—and your payment—will probably go up later. They can work for buyers who plan to move before the rate changes or expect to make more money in the future.
Also, ask your lender how much flexibility you have if rates increase before closing, as this could impact your budget. For example, you might be able to comfortably afford a $400,000 home with a 6.2% interest rate on a 30-year loan, but even a small rate bump to 6.5% could make that home less affordable.
How competitive is the housing market in my area?
Asking your real estate agent about the competitiveness of the local market can give you insight into whether you’ll face bidding wars or need to offer more than the asking price.
It’s important to be realistic when making offers—you don’t want to go too far below the asking price, as this could offend sellers and cost you the property.
On the other hand, overbidding can be risky since the house may not appraise for that amount.
Also, ask about the neighborhood—schools, amenities and future development. Additionally, inquire about average resale values to understand the home’s potential when it comes time to sell.
Final Word
If you’re a first-time homebuyer looking for a mortgage, reach out to the loan experts at FirstBank Mortgage. We will guide you through the process and help you find the best loan options for your needs.
