Quiz: How prepared are you to buy a home?

March 15, 2023

Do you have a solid grasp on home purchasing terms and responsibilities? Take this quiz to make sure you’re headed toward your homeownership goals with the right information.

 

There’s a lot to learn when it comes to homeownership, from how to handle closing costs to what you’ll be paying aside from your monthly mortgage. If you’re planning on looking at houses anytime soon, take this short quiz first to see just how prepared you are to start the homebuying process.

 

1. You’ve been pre-approved for a home loan. Congratulations! What does that big number tell you?

A. It’s the amount I can afford to spend on a home.

B. It’s the amount the bank will lend me for a home.

 

2. What should you look for in a real estate agent?

A. Good reviews/referrals

B. Strong knowledge of the area and market 

C. A sense of connection and trustworthiness

D. All of the above

 

3. What are you typically paying with your monthly mortgage payments?

A. Principal and interest on my home loan

B. Principal and interest on my home loan, plus real estate taxes

C. Principal and interest on my home loan, plus insurance

D. Principal and interest on my home loan, plus taxes and insurance

 

4 . What other expenses will you need to factor in each month aside from your mortgage?

A. There won’t be many changes beyond switching from my rent payment to a mortgage payment.

B. I’m factoring in yard maintenance, unexpected repair costs and more, in addition to my monthly mortgage payment.

 

5. How much can you expect to pay in closing costs?

A. Nothing

B. Between 2-5%

C. Between 7-10%

 

6. How long do you expect the entire homebuying process to take?

A. A couple of weeks

B. About a month

C. Two months, minimum


(Answer key: 1: B. It is what the bank will lend you; 2: D. All of the above; 3: D. Principal and interest on my home loan, plus taxes and insurance; 4: B. I’m factoring in yard maintenance, unexpected repair costs and more, in addition to my monthly mortgage payment; 5: B. Between 2 - 5%; 6: C. Two months, minimum) 

 

Buying a home is a huge investment. It’s important to be crystal clear about the process so that you can make informed decisions. The good news is that simply taking this quiz counts toward your information-gathering process. Keep reading and asking lots of questions as you continue the exciting process of finding your new home.

 

Fast facts: What you need to know about homeownership

  • Know how much you can afford: Your home loan amount is how much the bank will give you, but you need to look to your current budget to dictate how much you can actually afford to spend. Those two numbers may or may not be the same, but you won’t know until you do some number-crunching. Experts say 28 percent of your gross income should be your maximum mortgage amount. 
  • Homeownership costs go beyond mortgage payments: The cost of homeownership goes well beyond mortgage payments to things like new furniture, yard tools, plumbing repairs, furnace maintenance and more. Don’t forget to budget in a monthly contribution to an emergency fund. The homebuying process doesn’t happen overnight.
  • The process doesn't happen overnight: On average, it will take about a week to secure a loan, another week to find the right agent and six weeks to find the right home, according to the Home Buying Institute. Then comes a couple days’ worth of negotiations, plus another month or two before you close and get those keys. 
  • Plan ahead for closing costs: Closing costs are all the various fees associated with buying a home, which are paid at the close, or end of the process. This includes a lender fee, appraisal, real estate agent commissions and other various fees and taxes, generally totaling between 2 percent and 5 percent of the home purchase price. Formulate a plan ahead of time.

 

Feeling ready to buy your dream home? Get the homebuying process started today.

Related content

These small home improvement projects offer big returns on investment

Webinar: Mortgage basics: Finding the right home loan for you

The lowdown on 6 myths about buying a home

10 ways to increase your home’s curb appeal

Checklist: financial recovery after a natural disaster

Checklist: 10 questions to ask your home inspector

Closing on a house checklist for buyers

What’s the difference between Fannie Mae and Freddie Mac?

Changes in credit reporting and what it means for homebuyers

Tips for realtors to help clients get their homeownership goals back on track

3 tips for saving money when moving to a new home

5 ways to maximize your garage sale profits 

Pros and cons of a personal line credit

For today's homebuyers, time and money are everything

Why other lenders may be reaching out to your employees

6 essential credit report terms to know

Avoiding the pitfalls of warehouse lending

A checklist for starting a mobility program review

High-cost housing and down payment options in relocation

Housing market trends and relocation impact

Is raising backyard chickens a good idea financially?

7 steps to prepare for the high cost of child care

What are conforming loan limits and why are they increasing

How to save for a wedding

How I did it: Turned my side hustle into a full-time job

Multiple accounts can make it easier to follow a monthly budget

For today's relocating home buyers, time and money are everything

Crypto + Relo: Mobility industry impacts

Don’t underestimate the importance of balancing your checking account

What types of credit scores qualify for a mortgage?

Test your loan savvy

Webinar: Mortgage basics: What’s the difference between interest rate and annual percentage rate?

How do I prequalify for a mortgage?

Can you take advantage of the dead equity in your home?

Home equity: Small ways to improve the value of your home

Webinar: Mortgage basics: How much house can you afford?

8 steps to take before you buy a home

Is a home equity line of credit (HELOC) right for you?

Webinar: Mortgage basics: 3 Key steps in the homebuying process

Webinar: Mortgage basics: Buying or renting – What’s right for you?

How to use your home equity to finance home improvements

Webinar: Mortgage basics: What is refinancing, and is it right for you?

Should you get a home equity loan or a home equity line of credit?

5 things to avoid that can devalue your home

6 questions to ask before buying a new home

What is refinancing a mortgage?

What is an escrow account? Do I have one?

Quiz: How prepared are you to buy a home?

10 questions to ask when hiring a contractor

What to know when buying a home with your significant other

Webinar: Mortgage basics: How does your credit score impact the homebuying experience?

What is a home equity line of credit (HELOC) and what can it be used for?

Dear Money Mentor: When should I refinance a mortgage?

Building a dream home that fits your life

Are professional movers worth the cost?

First-time homebuyer’s guide to getting a mortgage

Beyond the mortgage: Other costs for homeowners

How I did it: Bought my dream home using equity

Get more home for your money with these tips

Saving for a down payment: Where should I keep my money?

4 ways to free up your budget (and your life) with a smaller home

How I did it: Built living spaces to support my family

Community activist achieves dream of homeownership

Bringing economic opportunity to underserved communities one home at a time

Managing the impacts of appraisal gaps in a hot housing market

Is it the right time to refinance your mortgage?

Spring cleaning checklist for your home: 5 budget-boosting tasks

Overcoming high interest rates: Getting your homeownership goals back on track

Is it cheaper to build or buy a house

Money Moments: How to finance a home addition

Home buying myths: Realities of owning a home

House Hacks: How buying an investment property worked as my first home

Should you buy a house that’s still under construction?

10 uses for a home equity loan

Know your debt-to-income ratio

Your guide to breaking the rental cycle

Which is better: Combining bank accounts before marriage — or after?

Save time and money with automatic bill pay

Is it time to get a shared bank account with your partner?

It's possible: 7 tips for breaking the spending cycle

Here’s how to create a budget for yourself

9 simple ways to save

Do you and your fiancé have compatible financial goals?

Is online banking safe?

Recognize. React. Report. Caregivers can help protect against financial exploitation

Webinar: Uncover the cost: Building a home

Webinar: Mortgage basics: Prequalification or pre-approval – What do I need?

Adulting 101: How to make a budget plan

You can take these 18 budgeting tips straight to the bank

How I did it: Learned to budget as a single mom

How you can take advantage of low mortgage rates

Buying a home Q&A: What made three homeowners fall in love with their new home

What you need to know about renting

Personal finance for teens can empower your child

What’s a subordination agreement, and why does it matter?

Understanding the true cost of borrowing: What is amortization, and why does it matter?

Money Moments: Tips for selling your home

How I did it: My house remodel

How I did it: Bought a home without a 20 percent down payment

Crypto + Homebuying: Impacts on the real estate market

Your quick guide to loans and obtaining credit

Military homeownership: Your guide to resources, financing and more

Webinar: Uncover the cost: Home renovation

4 questions to ask before you buy an investment property

Preparing for homeownership: A guide for LGBTQ+ homebuyers

Checklist: 6 to-dos for after a move

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.