Understanding What You Can Afford Quiz

Determining how much home you can responsibly afford is an important question to answer and a critical first step to take before you can begin house hunting.

Start by educating yourself about the costs of buying a home and owning a home, and the importance of an emergency fund. Then, test your knowledge with this quiz.

1

Typically, what funds must you be prepared to pay at closing?

Typically, you need money set aside for both the down payment on the home and closing costs. You should also set aside money for emergencies and unforeseen circumstances, but that is not typically required to purchase a home.

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2

How much money should you save for an emergency fund?

The general rule of thumb is to have enough savings to cover six months of living expenses.

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3

Which of the following costs must you be prepared to pay as a homeowner?

It's important to understand all of the costs of homeownership. These include mortgage payments, property taxes, homeowner's insurance, utilities, and maintenance and repairs.

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4

What is generally considered a reasonable monthly payment for a home?

Typically, lenders want your monthly housing payment to be no more than 28% of your monthly gross income.

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