let’s put some A’s to your frequently asked Q’s

It depends. Homes have historically been considered safe investments because they have tended to appreciate in value. If you plan to stay in one place for a while, buying a home could save you money in the long-term compared to renting. However, there are places where renting can be significantly more affordable than buying. Renting also saves you many of the costs and headaches of homeownership, such as property taxes and home maintenance.

When it comes to calculating your monthly mortgage payment, there are more factors than just the home’s sticker price. Your mortgage’s interest rate, the length of the loan, and the cost of any insurance premiums and property taxes all factor into what you’ll actually end up paying each month. Consider your monthly income and other living expenses very carefully before making a decision. Many experts recommend sticking to a mortgage payment that’s less than 30 percent of your monthly income.

Our calculator makes it easy to figure out how much house you can afford; check it out here.

In most cases, you’ll need 20 percent of a home’s sale price as a down payment if you want to avoid paying for private mortgage insurance (PMI). However, some specialized loan programs allow you to get a mortgage with a much smaller down payment and no PMI. Federal Housing Administration (FHA) loans, for example, allow for as little as 3.5 percent down. Loans backed by the Veterans Association (VA) sometimes don’t require any down payment at all.

You'll need to fill out a Successor In Interest form. You may qualify as a successor in interest if an ownership interest in the property was transferred to you.

Generally, the higher your credit score is, the lower your interest rate will be. So it’s important to get a copy of your credit report from one of the top credit bureaus (Equifax, TransUnion, or Experian), then check it carefully for any inaccurate information that could cause your bank to think you’re a riskier borrower than you actually are. If you find any errors, contact the credit bureau to correct them.

Your ability to afford your monthly payment is a big consideration when it comes to deciding between 15-year and 30-year loans. Shorter loans tend to have lower interest rates than longer loans, which means the total cost of the loan will be lower over time. You’ll also own the house (and stop having to make mortgage payments) much sooner. But paying off a loan more quickly also generally means a higher monthly loan payment, which can be more of a challenge to fit into a household budget.

When you buy a house with a down payment lower than at least 20 percent of what your house is worth, your lender will typically require PMI. In exchange for paying a premium, the mortgage insurance company limits your lender’s losses if you fail to make mortgage payments. Once your principle payments have given you home equity equal to 22 percent of your house, your lender should cancel your PMI policy automatically.

A qualified home inspector will give you an objective assessment of the condition of the property you want to purchase. That’s important, because nobody wants to move into a new home only to end up making expensive repairs, like buying a new roof or replacing a balky heating system. If an inspector identifies a problem, talk to your real estate agent—you’ll usually have the option to negotiate the price of the house or ask the current owner to make repairs before you close.

A title is a legal document that proves you own your property. A title company will do research to make sure nobody has an outstanding claim on a property before it’s sold. Your lender will require you to purchase title insurance to protect them if the title company misses something and your ownership comes into doubt. You can also purchase title insurance that protects your own interest in the property, if you wish to do so.

Construction-only loans cover just the cost of the construction, and are generally short-term loans, expected to be paid in full within a year or so. Construction-to-permanent loans transition from a construction-only loan to a typical home mortgage once the construction is complete. For those who’ve already built up equity in their home, a home equity line of credit, or home equity line of credit (HELOC), can be used to fund smaller projects.

The amount of time it takes to build a house depends on the scale of the project, the location, your contractor’s schedule, and how long it takes to get all necessary permits. However, you can generally expect building a home to take anywhere from three to six months. Some homes will take longer than that, but construction loans generally limit construction to one year, which can serve as an upper limit.

You can use a cash-out refinance for any purpose, including home renovation. It’s always a good idea to look into all your alternatives, however. If you’ve been making loan payments for a while and a refinance would not change your interest rate significantly, another option such as a home equity line of credit (HELOC) might make more sense.

When you refinance your mortgage, you take out an entirely new loan on your house and use that to pay off your existing mortgage. Then you start over with the first payment on your new loan. By contrast, a HELOC allows you to take out a loan using equity you’ve built up over time as collateral. Just keep in mind that a HELOC is a separate loan from your mortgage, so any payments you make on it will be in addition to your monthly mortgage payment.

Remodeling a house can improve its resale value, but there’s no guarantee. Upgrading a kitchen or a bathroom can make your house more attractive to a potential buyer, but tastes differ, and preferences change over time. Keep in mind that remodeling can also improve the value of your house to you while you live there, even if it doesn’t boost your eventual resale value.