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COMMON QUESTIONS FROM FIRST-TIME
HOMEBUYERS
KNOW YOUR RIGHTS AS A
HOMEBUYER
There are many laws that protect you from scams, unnecessary
expenses, and discrimination in the process of homebuying.
Know your rights!
HOW MUCH MORTGAGE CAN YOU
AFFORD?
You can save yourself a lot of wheel-spinning if you take a
minute to figure out how much mortgage you can afford.
Generally, a lender will want your monthly mortgage payment
to total no more than 29% of your monthly gross income
(that's your monthly income before taxes and other
paycheck deductions are taken out.) You also need to consider
current loan interest rates. The lower the interest rate, the
more expensive the home you'll be able to afford.
Follow our tips and use our simple calculators to see how
much you can afford in a mortgage payment.
CREATE YOUR
"WISH LIST"
Make your wish list. Focus on the
features you want in a home: 2 bedrooms or 3? 1 bath or 2?
Garage or no garage? Knowing what you're looking for
will help you focus your search. And it will help your real
estate agent, too.
YOUR REAL
ESTATE AGENT
You'll want to start searching for a broker as soon as
you decide to buy a home. Talk to several and find someone
you think you'll be comfortable working closely with.
Many of your friends and relatives have probably bought and
sold their homes through brokers. Ask them who they used and
what their experiences were. You can find out which brokers
specialize in the kind of home or the area you want by
looking in the Yellow Pages or your local newspaper's
classified real estate ads. Or drive through neighborhoods
and note the names of brokers on "for sale" signs. When you
talk to prospective brokers, ask questions about the areas
and types of homes in which you're interested. Do they
seem knowledgeable? Most important, is their personal style a
good fit with your own?
MORTGAGES AND
HOMEBUYING PROGRAMS
Many different kinds of mortgages are available to you. Read
about them, and make sure you understand the pros and cons of
each. Your real estate agent can help you. HUD offers some
special homebuying programs. Also, many local governments
offer special homebuying programs to help low-income
homebuyers. Shop around - you may be surprised at all your
options!
SHOPPING FOR A
HOME
So now you really begin house-hunting. Your real estate
broker will be able to find listings for you, based on your
wishlist. But don't stop
there! You can do your own looking, and then ask your broker
to show you the house. Start with the internet. Pick up real
estate flyers at local grocery stores and convenience stores.
Read the real estate sections of your local newspaper. Drive
around neighborhoods that interest you and write down
addresses where there are "for sale" signs. Go to open
houses. Try everything! And use our convenient home-shopping
check list to help you compare the houses you see.
BUILDING A
HOME
If you want to build a new home, there are other things you
need to know before you begin. Learn about construction
standards and about buying land, so you know your rights.
MANUFACTURED
HOMES
Manufactured homes can be a great alternative for first-time
home buyers. Again, it's good to know how the laws
protect you.
REHAB A
HOME
You may want to consider buying a "fixer-upper." If so, there
are federal programs that can help you finance your repairs.
HOME
INSPECTIONS
When you make an offer on a home, it's a good idea to
make your offer contingent on a home inspection, conducted by
an independent authorized inspector. You will have to pay for
this inspection yourself, but it could keep you from buying a
house that will cost you far more in repairs, down the road.
If you are satisified with the results of the inspection,
then your offer can proceed. If you aren't, you may
want to negotiate, asking the seller to pay for certain
repairs or asking for a lower price.
APPRAISALS
Your lender will require you to get an appraisal of the house
you want to buy, to make sure it's worth the money that
you're borrowing. You may select your own appraiser, or
you may ask your real estate agent to help you take care of
that.
HOMEOWNERS INSURANCE
Lenders require that you have homeowners insurance, to protect both your interests and theirs. Like
everything else, be sure to shop around for insurance that fits your needs.
SETTLEMENT OR
CLOSING
Finally, you've gone through the whole process, and
you're ready to go to "settlement" or "closing." We
know you'll be excited, but be sure to read everything
you sign! And before you go, read this important information
about your rights.
MOVING
Looks like you're ready to move. There's a lot to consider as you plan your move.
The good news is that there's lots of help. Check this out.
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