There’s a lot to learn when it comes to home ownership, from how to handle closing costs to what you’ll be paying aside from your monthly mortgage. If you’re planning on looking at houses anytime soon, take this short quiz first to see just how prepared you are to start the home buying process.
You scored out of .
How did you do?
5 or more correct: Ready to buy
It’s clear that you’ve done your home-buying homework. That will go a long way toward making this a smooth process. If unexpected challenges arise, ask questions so you can keep making informed decisions and trusting your gut.
4 or fewer correct: Brush up, buyer
Buying a home is a huge investment. It’s important to be crystal clear about the process so that you can make informed decisions. The good news is that simply taking this quiz counts toward your information-gathering process. Keep reading and asking lots of questions as you continue the exciting process of finding your new home.
Fast facts: What you need to know about home ownership
Your home loan amount is how much the bank will give you, but you need to look to your current budget to dictate how much you can actually afford to spend. Those two numbers may or may not be the same, but you won’t know until you do some number-crunching. Experts say 28 percent of your gross income should be your maximum mortgage amount.
On average, it will take about a week to secure a loan, another week to find the right agent and six weeks to find the right home, according to the Home Buying Institute1. Then comes a couple days’ worth of negotiations, plus another month or two before you close and get those keys.
The cost of homeownership goes well beyond mortgage payments to things like new furniture, yard tools, plumbing repairs, furnace maintenance and more. Don’t forget to budget in a monthly contribution to an emergency fund.
Closing costs are all the various fees associated with buying a home, which are paid at the close, or end of the process. This includes a lender fee, appraisal, real estate agent commissions and other various fees and taxes, generally totaling between 2 percent and 5 percent of the home purchase price. Formulate a plan ahead of time.
Feeling ready to buy your dream home? Get the home buying process started today.