Being a first-time home buyer in Kansas City can feel a bit overwhelming.
On the one hand, you’re just one decision away from owning a home in an incredible city, no more paying rent, and you now complete control over almost every aspect of where you live.
On the other hand, it’s still a very big decision.
3 Questions Every First Time Home Buyer in Kansas City Needs Answered
Fortunately, you’re not the first one to make it. Every first-time home buyer in Kansas City has a number of questions, but you’ll find answers to the three most common ones below.
1. How Much Can I Afford?
Without a doubt, “How much can I afford?” is the most commonly asked question by people about to buy a home for the first time.
However, the answer is different for everyone. For example, if you still have student loans and a car note to pay off, you probably won’t be able to afford as much as someone who doesn’t. Obviously, your salary plays a major role, too.
A mortgage calculator will help with this, but most experts would recommend that you keep your monthly payment to no more than 45% of your pretax income.
2. How Much Do I Need for a Down Payment?
This is probably the second-most popular question among new homebuyers.
Again, there’s no one answer here, but there is conventional wisdom. Traditionally, homebuyers have been expected to have at least 10% for a down payment in order to purchase a home.
With that said, conventional wisdom has begun shifting to higher amounts. After the Great Recession, most lenders feel much more comfortable with borrowers who can put up 20%. Plus, this higher amount will mean more manageable monthly payments.
3. What Role Does My Credit Score Play?
Finally, you’re probably thinking about how your credit score will affect your mortgage qualifications.
According to Credit Karma, this FICO-score-to-interest-rate breakdown represents, “what you might expect your base interest to be, based on your credit score, on a $216,000, 30-year, fixed-rate mortgage”:
- 760–850: 4.28%
- 700–759: 4.50%
- 680–699: 4.68%
- 660–679: 4.89%
- 640–659: 5.32%
- 620–639: 5.87%
As you can see, your credit score can have a significant impact on your interest rate and, thus, what you can afford.
Are You a First Time Home Buyer in Kansas City?
Hopefully, the above FAQ helped you feel a bit more comfortable moving forward with a mortgage and purchasing a home.
Still, as mentioned above, as a first-time home buyer, you probably have a few questions unique to your specific situation. In that case, we’d be more than happy to answer them.
Just contact us today or you can even get started on an application. At A1 Mortgage, we take pride in helping each one of our clients every step of the way.
