If search engines are able to give us anything, it’s the ability to show that so many of us ask the same questions about any given topic. The world of real estate is no exception. There are thousands of questions that internet users type into search bars, hoping that the platforms will provide the most accurate answers possible. What are the most googled real estate questions for 2023? Read ahead to view the questions most commonly asked, as well as the honest answers.
1. Should I buy or rent?
The question of whether to rent from a landlord or buy your own place tops the list of most googled real estate questions for 2023. The best answer to this question is that it depends, and you should take multiple factors into consideration.
Whether or not you are financially able to buy a home is the most important factor at play. Even though rent payments are typically higher than a mortgage payment, you might not have the down payment saved up or the credit score to secure a loan. If that’s the case, you will have to rent until your financial situation changes.
Your lifestyle is also an important consideration. Are you wanting to be free of the burdens of home repair, lawn care, and other caveats of home ownership? Then renting might be your best bet. Likewise, if you aren’t planning on staying in one spot for very long, renting is usually the better option.
But if you are in financial shape to buy a home and wish to put your dollars to work paying into a place that you own rather than lining a landlord’s pockets, then home ownership should be your best bet. The home is the single largest investment that most Americans will ever make, and the equity that you build in your home can serve as financial leverage for your eventual retirement.
Whether or not you are financially able to buy a home is the most important factor at play. Even though rent payments are typically higher than a mortgage payment, you might not have the down payment saved up or the credit score to secure a loan. If that’s the case, you will have to rent until your financial situation changes.
Your lifestyle is also an important consideration. Are you wanting to be free of the burdens of home repair, lawn care, and other caveats of home ownership? Then renting might be your best bet. Likewise, if you aren’t planning on staying in one spot for very long, renting is usually the better option.
But if you are in financial shape to buy a home and wish to put your dollars to work paying into a place that you own rather than lining a landlord’s pockets, then home ownership should be your best bet. The home is the single largest investment that most Americans will ever make, and the equity that you build in your home can serve as financial leverage for your eventual retirement.
2. How much home can I afford?
This can be a tricky question. In order to find out just how much you will be able to pay for a home, you’ll need to calculate how much of a monthly payment your income allows for you to pay. To do this, a lender will determine what your income-to-debt ratio is. This number takes your income and your current revolving debt load into consideration, giving a potential payment amount that will not adversely impact you financially.
Most lenders will want the income-to-debt ratio to be at 36 or less. Some will grant a mortgage for ratios as high as the mid-40s, though these tend to charge borrowers higher interest rates.
Most lenders will want the income-to-debt ratio to be at 36 or less. Some will grant a mortgage for ratios as high as the mid-40s, though these tend to charge borrowers higher interest rates.
3. Do I need to put 20% down?
You might have heard that you’ll need a large down payment for a home loan. But in almost no cases will this amount be as high as 20%. Though there are some advantages of having a down payment this high, it’s not necessary and in some cases not financially wise.
An FHA mortgage will let the borrower pay as little as 3.5% down on their home. Their interest rates are typically lower, too. And the great thing about an FHA loan is that you can have newer or less than perfect credit and still qualify.
VA loans are backed by the Department of Veterans Affairs and have a zero down option for eligible borrowers. If you are an active or retired member of the armed services, this is an attractive way to go about securing a mortgage.
But if you put 20% down on a home, you’ll not have to pay for PMI, or private mortgage insurance. The premium for the PMI will vary, based on a borrower’s credit worthiness and equity in a home. Once you have 20% equity, lenders that require PMI will allow the cessation of payments on the policy.
An FHA mortgage will let the borrower pay as little as 3.5% down on their home. Their interest rates are typically lower, too. And the great thing about an FHA loan is that you can have newer or less than perfect credit and still qualify.
VA loans are backed by the Department of Veterans Affairs and have a zero down option for eligible borrowers. If you are an active or retired member of the armed services, this is an attractive way to go about securing a mortgage.
But if you put 20% down on a home, you’ll not have to pay for PMI, or private mortgage insurance. The premium for the PMI will vary, based on a borrower’s credit worthiness and equity in a home. Once you have 20% equity, lenders that require PMI will allow the cessation of payments on the policy.
4.When should I apply for a mortgage?
Another of the most googled real estate questions for 2023 is when you should make the move to apply for a loan. It’s generally a good idea to get prequalified from a mortgage lender about 90 days prior to when you’d like to close on a home.
The lender will pull your credit to get your pre-approval. They will do another credit pull immediately before closing, too. This is to ensure that your financial situation hasn’t changed since you began the process. It’s strongly advised to not add to your revolving debt load (by using your credit cards) or assuming any other debts until AFTER you close on your home. Doing so can increase your interest rate for the mortgage, or even keep you from getting the mortgage into final approval.
The lender will pull your credit to get your pre-approval. They will do another credit pull immediately before closing, too. This is to ensure that your financial situation hasn’t changed since you began the process. It’s strongly advised to not add to your revolving debt load (by using your credit cards) or assuming any other debts until AFTER you close on your home. Doing so can increase your interest rate for the mortgage, or even keep you from getting the mortgage into final approval.
5. Should I partner with a real estate agent?
A buying agent will make the home search so much easier. A professional Realtor will know the available home inventory inside and out, and be able to match you to a neighborhood that suits your lifestyle.
The agent will also have the necessary professional contacts to find others you’ll need along the way. Need a home inspector? Your agent will refer you to their favorite one. Need a title company or closing attorney? Again, your agent will be able to get you into touch with one that they trust.
Your agent will also bring invaluable negotiating experience to the table. When it comes time to make an offer on the home you are considering, your agent will be able to use their skills to get you the best price possible.
An agent will also be with you from the moment the home search begins until the ink is dried on the documents at closing. They do not make money from a buyer, their services won’t cost you a thing!
The agent will also have the necessary professional contacts to find others you’ll need along the way. Need a home inspector? Your agent will refer you to their favorite one. Need a title company or closing attorney? Again, your agent will be able to get you into touch with one that they trust.
Your agent will also bring invaluable negotiating experience to the table. When it comes time to make an offer on the home you are considering, your agent will be able to use their skills to get you the best price possible.
An agent will also be with you from the moment the home search begins until the ink is dried on the documents at closing. They do not make money from a buyer, their services won’t cost you a thing!
The bottom line
Knowing the ins and outs of home ownership, mortgage financing, and other commonly asked real estate questions will make you a more well-rounded consumer. For any additional questions about how the market works or about how to begin your home search, consider teaming with O’Neill Residential. His years of experience in this industry make him one of the most trusted names in real estate in Chicago.
