“The best time to buy a home is always five years ago.”
Ray Brown
With what is happening with home prices in Texas and around the nation, mortgage interest rates and property tax values climbing, Ray Brown’s quote is a definite fit here! So, before you begin to visit all those gorgeous open house models, visit friends and family who have gone before you with their first or latest home buying adventure. What you will hear and discover can be a real eye opener! Then, if you are still excited about your first or next dream home, start working on these nine steps to buying your first home offered by the US Department of Housing & Urban Development (HUD):
Step 1: Figure out how much you can afford
What you can afford depends on your income, credit rating, current monthly expenses, down payment and the interest rate.
Step 2: Know your rights
Check out fair housing rights and responsibilities, RESPA requirements, borrower’s rights, and predatory lending fraud.
Step 3: Shop for a loan
Save money by doing your homework. Take the time to look for the best mortgage; shop around. Talk to several lenders, compare costs and interest rates, negotiate to get a better deal.
Step 4: Learn about home buying programs
In addition to HUD’s mortgage insurance programs, there may be programs sponsored by your state/local government or other organizations. Go to the HUD website and select the state that interests you.
Step 5: Shop for a home
You can utilize HUD links in your choice of real estate agents. Be sure to fill out the pdf Home-shopping Checklist for each home you look over. You can also learn the facts and the pitfalls of fixer-uppers & home improvements.
Step 6: Make an offer
Discuss the process with your real estate agent. If the seller counters your offer, you may need to negotiate until you both agree to the terms of the sale. Your purchase contract must be in writing.
Step 7: Get a home inspection
Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home and can help you avoid buying a home that needs major repairs. There are ten questions to ask your inspector (details on HUD website):
- What does your inspection cover?
- How long have you been practicing in the home inspection profession and how many inspections have you completed?
- Are you specifically experienced in residential inspection?
- Do you offer to do repairs or improvements based on the inspection?
- How long will the inspection take?
- How much will it cost?
- What type of inspection report do you provide and how long will it take to receive the report?
- Will I be able to attend the inspection?
- Do you maintain membership in a professional home inspector association?
- Do you participate in continuing education programs to keep your expertise up to date?
Step 8: Shop for homeowners insurance
Lenders require that you have homeowners insurance. Be sure to shop around to potentially save hundreds of dollars a year. Remember, flood and earthquake damage are usually not standard on homeowners policies (www.floodsmart.gov, https://pueblo.gpo.gov/Publications/PuebloPubs.php?NavCode=XA&CatID=8).
Step 9: Sign papers
When you are finally ready to go to “settlement” or “closing” be sure to read everything. Review the many helpful HUD links & checklist before you sign on the dotted line!
Keep in mind, when it comes to this month’s lifeskills, Possessions, make sure you and your family have teamed together to make your house not just a place to live in. More importantly, may your house be a home filled with love and joy shared by all. Then, congratulations are in order! Now, you have the privilege and responsibility of taking care of your castle or cottage together!
