(Updated 11/28/24)
Are you ready to ace your homeownership journey? Take this “Do You Know How to Buy a House” Quiz!
Buying a house is an exciting milestone, but it’s also a complex process. Before you embark on your homeownership adventure, test your knowledge with this 9-question quiz inspired by informative articles like these:
1. What is the ideal credit score for securing the best mortgage rates?
- (a) Above 740
- (b) Above 670
- (c) Above 580
- (d) It doesn’t matter, as lenders only care about income
2. How much of a down payment should you aim for to avoid private mortgage insurance (PMI)?
- (a) 5%
- (b) 10%
- (c) 20%
- (d) 30%
3. What are the two main phases of a Home Equity Line of Credit (HELOC)?
- (a) Draw period and repayment period
- (b) Closing and construction
- (c) Pre-approval and appraisal
- (d) Inspection and negotiation
4. Which document guarantees your ownership is free of any claims or encumbrances when buying a home?
- (a) Purchase agreement
- (b) Home inspection report
- (c) Title search
- (d) Mortgage pre-approval
5. What is the key advantage of working with a real estate agent when buying a house?
- (a) Access to exclusive listings
- (b) Expert negotiation skills
- (c) Knowledge of local market trends
- (d) All of the above
6. What important financial document should you gather before applying for a mortgage?
- (a) Pay stubs
- (b) W-2 forms
- (c) Bank statements
- (d) All of the above
7. What is the purpose of a home inspection when buying a house?
- (a) To determine the home’s value
- (b) To identify any potential structural or system issues
- (c) To negotiate repairs with the seller
- (d) To obtain homeowner’s insurance
8. What is the estimated timeframe between pre-approval and closing for a typical home purchase?
- (a) 30-45 days
- (b) 60-90 days
- (c) 120-180 days
- (d) It depends on the lender and loan type.
9. What is a good habit to cultivate for responsible homeownership?
- (a) Regularly scheduling maintenance checkups
- (b) Budgeting for unexpected repairs
- (c) Building an emergency fund
- (d) All of the above
Answers:
1. What is the ideal credit score for securing the best mortgage rates?
- (a) Above 740: This is somewhat of a trick question to start. Typically the higher your credit score, the better your mortgage rate. So to achieve the “best” rate, above 740 would be the optimal answer. However, a credit score above 640 is typically a great starting point. Here are two great articles to learn more about credit and obtaining a mortgage: “Unlock the Best Mortgage Rates: How to Leverage Your Credit Score“, and “A Comprehensive Guide to Boosting Your Credit Score“.
2. How much of a down payment should you aim for to avoid private mortgage insurance (PMI)?
- (c) 20%: This is NOT to be confused with Mortgage Insurance Premium (MIP) associated with an FHA Loan. Here’s everything you need to know about Mortgage Insurance.
3. What are the two main phases of a Home Equity Line of Credit (HELOC)?
- (a) Draw period and repayment period. “Everything You Need to Know About HELOCs“
4. Which document guarantees your ownership is free of any claims or encumbrances when buying a home?
- (c) Title search: More about title service fee.
5. What is the key advantage of working with a real estate agent when buying a house?
- (d) All of the above:
6. What important financial document should you gather before applying for a mortgage?
- (d) All of the above: “A Step by Step Guide to the Mortgage Application Process“
7. What is the purpose of a home inspection when buying a house?
- (b) To identify any potential structural or system issues
8. What is the estimated timeframe between pre-approval and closing for a typical home purchase?
- (b) 60-90 days: It can depend on a multiple of factors but typically if you have found your home, it might take 60-90 days. There are always exceptions based on paperwork, motivated parties, etc. “A Realistic Timeline for Every Buyer“
9. What is a good habit to cultivate for responsible homeownership?
- (d) All of the above
