Are You a Smart Homebuyer?

Question Mark

Are you a smart homebuyer?

Kiplinger created a quiz for homebuyers asking them questions to help determine how smart of a homebuyer they may be.

Now, of course, it is not an intelligence test, but a test of what knowledge a homebuyer has going into the homebuying process.

There are some very intuitive questions, I enjoyed taking it, and would love to know how well the homebuyers I work with would do!

It is only ten questions — test yourself!

Here is a link to the Kiplinger’s How Smart a Home BUYER Are You quiz.

I’ll break it down with different verbiage below:

1) Is it better to be pre-qualified or pre-approved?

2) Can you use a buyer’s agent to buy a For Sale by Owner?

3) How much can you as a buyer expect to pay for closing costs?

4) Is title insurance required for a loan?

5) If you take money from your ROTH IRA, do you have to pay it back before retirement?

6) Are adjustable rate mortgages still good for some people?

7) How much does a home inspection typically run?

8) When is private mortgage insurance required?

9) You find a home you’d like to buy. Your agent tells you the two most recent sales amounts. Is that enough to determine what you should offer?

10) After you buy a new home, what may be tax deductible when you file federal taxes?

 

Answers:

1) Pre-approved

2) Yes

3) Between 3-6% above the downpayment of your loan.

4) Yes, required by the lender. You may get a separate policy to protect yourself.

5) No

6) Yes, depending on the situation.

7) It can be $300-400, but that is JUST the home inspection, AND it may depend on the size and price of the house. You may want other inspections in addition to the general structural and mechanical inspection of the house.

8) When the loan is for more than 80% of the value of the house.

9) No. You’ll need to know when they sold, how long they were on the market, what amenities they had, and what the different in the market is at this point versus that one. If the one you like has hardwood floors, granite counters, and stainless steel appliances, while one of the others had old appliances, formica counters, and old carpet throughout, then it would make a difference in value.

10)  The year you buy a house, you may be able to write off loan discount points paid at settlement, property taxes, and mortgage interest.

 

If you are considering buying a home in Baltimore, please contact me. I would love to help guide you through the process!

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