DBA For James B. Nutter & Company NMLS 2067

Are you a home buying genius?

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See how much you know about buying a home

Many thanks to CNN Money for providing a quiz to test our home-buying knowledge! Go ahead, take the quiz yourself- then read below to get insight from Nutter Home Loans!

How will a bad credit score affect your ability to buy a home? Credit can always be repaired, with a little work! On the flip side of the coin, making sure you are building credit over the years can get you a great rate on a home loan, ultimately saving you tens of thousands of dollars. A FICO credit score is calculated by taking different things into account, in different degrees. Read more about FICO’s credit score calculation.

With the following information in mind- it’s important to remember that simply avoiding credit altogether is not the answer. A credit score will take into consideration your length of credit history, so getting started as soon as possible and actively making payments is important.

What’s the best way to get the financing you need? At Nutter, we call this our “No Cost Preapproval”, and it is quite the valuable asset to have in your back pocket! Our preapprovals are analyzed by an underwriter at no cost to you. So when we give you that sheet of paper that’s stamped ‘approved’, we really mean it. In contrast with our preapproval, some lenders will do a ‘pre-qualification’. This is essentially a worthless piece of paper, because it contains no added value for your real estate agent and will NOT help you get the home you’ve had your eye on.

How much will you typically pay in closing costs? As CNN Money states, closing costs cover mortgage origination, underwriting and processing fees, title search and insurance, attorney fees, inspection fees, appraisals, and mortgage recording costs. However, many lenders will tack on extra unnecessary fees. These may come as a surprise to the prospective home buyer. As a practice, we don’t charge extra fees like many other lenders.

How much savings should you have after you buy a home? There is nothing more satisfying than living within your means! After moving in, you’ll want to feel comfortable in your new home and furnish it at will. It’s important to have a decently sized safety net of savings to ensure that you can cushion any extra surprise expenses - and make your new home feel like home!

As a general rule of thumb, your monthly mortgage payment should not exceed what percentage of your monthly income? Many mortgage lenders will no longer finance a loan that pushes a borrower over a 36% total debt-to-income ratio, with a housing allowment of roughly 28%. However, it hasn’t always been so! Financing loans that home owners really couldn’t afford caused the subprime meltdown that forced many Americans into foreclosure. Fun fact: At Nutter, we never financed any subprime loans - there is a such thing as a trusted home mortgage lender!

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