- What kind of home and where?
Decide what kind of home you want/need: size, location, special features (such as fireplace or fence), etc. You should consider your needs first and then your wants. Consider your home an investment. Do not buy quickly and emotionally. Carefully consider your options and view as many homes as necessary to find the home that’s perfect for you..
- Find a buyer's agent
You will probably want to use a real estate broker/agent to help you with your search and to write your contract/negotiate on your behalf. Interview several brokers/agents to find one you are comfortable working with, who will answer your questions and help you find a property that meets your specifications. A listing broker lists the property for sale and actively markets the property. The selling broker or buyer’s agent represents the buyer. The fees for the listing and selling broker/agent are generally paid by the seller, usually as a percentage of the purchase price.
- Pre-qualification
Get "pre-qualified" for a loan. This means the lender will review your credit, income and other factors to determine how much of a mortgage you qualify for. In the current real estate climate most sellers’ agents will recommend that the seller wait to see a prequalification before responding to any offer. Getting pre-qualified insures that when you find the home you love you will be able to act on it expediently, thus reducing the risk of someone else getting it under contract while you are working with the lender towards pre-qualification.
- Begin house hunting
Allow time to see a number of houses, so you have a good basis for making a final decision. When you find a home you like, carefully give it your own personal inspection. You will also want to tour the neighborhood and perhaps see the house at different times of day or on weekends to check traffic patterns and other amenities that may affect your decision.
- Make an offer and sign a Purchase Contract
If you're comfortable with the home, make an Offer to Purchase, including an "earnest money" deposit. Earnest money is your assurance to the seller that your offer is serious; it is held in escrow for the benefit of both buyer and seller until such time as the contract is terminated or the property closes at which time it is credited to the buyer toward purchase price.
- Get professional inspections
Your Purchase Contract will permit you to have various professional inspections and will govern your rights if the inspections show problems. Before you make an offer and sign a purchase contract, ask your real estate agent which inspections are best for your area, and work with them to insure that you allow sufficient time to complete all intended inspections.
- Finalize you mortgage details
Work with your lender to determine which program is best for you given you runique situation and specific goals for the purchase of this property.
- Final Walk-Through
A day or two before closing, do a final walk-through of the property to make sure there are no new problems. This may be a good time to have the seller show you how to operate major systems and appliances.
- Closing
Close the loan (also called "Loan Settlement"). This is the day you actually purchase the home. Closings are normally conducted at a title company office where you will sign many documents which will be thoroughly explained to you by the title closer. You will also sign the loan docs, present the balance of the funds due from the buyer, receive a copy of your warranty deed and the keys to your new home.
BUYER'S RIGHTS
You have the right to buy any home you can afford in any neighborhood. The Fair
Housing Act (Title VIII of the Civil Rights Act, 1988) makes it illegal to discriminate
because of such factors as race, color, national origin, religion, sex, handicap
or familial status (that is, whether you are pregnant or have children). In discussing
fair housing, "discrimination" means unfairly denying someone the right to own or
rent a house or apartment.
You also have a right to fair lending. No one can refuse to give you a loan for
a house because of your race, color, national origin, religion, sex, familial status
or handicap. A lender may offer a loan on less favorable terms or refuse to approve
your loan application for other reasons, such as insufficient income, unacceptable
credit history, or other factors that are not discriminatory.
It's also illegal for anyone to:
- Threaten, coerce, intimidate or interfere with anyone exercising a fair housing
right
- Advertise or make statements that indicate a limitation or preference based on race,
color, national origin, religion, sex, familial status or handicap.
If you think that any of your fair housing rights have been violated, discuss your
concerns with the person or people involved. If you're not satisfied after discussing
your complaints, contact the U.S. Department of Housing and Urban Development office
closest to your home.
When you apply for a mortgage loan, you have a right to know the true cost or annual
percentage rate of your loan, as well as the costs of closing the loan. By law,
you should receive the following information from your lender:
- A "Good Faith Estimate" of the settlement (or closing)
costs of your loan. This is the lender's best estimate
of the settlement costs, based on information available to the lender when you apply
for the loan. If any of the costs are uncertain at that time, the lender will indicate
which ones are estimates.
- The Annual Percentage Rate (APR) that you'll pay on the
loan. The APR shows the costs of your mortgage loan as a yearly rate. This
rate is usually higher than the rate stated in your mortgage or deed of trust note
because the APR includes up-front fees (such as points) as well as interest. The
APR is intended to show you the true cost of your loan. When comparing one loan
to another, be sure to compare APRs to get a true picture of what each one will
cost you.
- The finance charge (don't be surprised: the total 30-year finance charge
will probably exceed the price of your house! By the time you finish paying the
loan, the amount won't seem nearly so big.)
- Schedule of payments
- Late payment charges
- If you apply for an Adjustable Rate Mortgage (ARM) you will receive an additional
disclosure explaining how and when the interest rate on your loan will change and
a copy of the Consumer Handbook on Adjustable Rate Mortgages (CHARM) booklet. You
should read this information carefully.
This information is required by the Truth-In-Lending Act. The Department of Housing
and Urban Development publishes a brochure called "A HUD Guide for Home Buyers -
Settlement Costs". If you haven't yet applied for a loan, you may request
the brochure from HUD or any mortgage lender.
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