Home Buying

Steps to Buying a Home

Figure out how much you can afford
Know your rights
Shop for a loan
Learn about home buying programs
Shop for a home
Make an offer
Get a home inspection
Shop for homeowners insurance
Sign paperwork

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. The calculators below can help you understand what you can afford, but it is best to visit your credit union to find out for sure.

Mortgage Calculators

A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that down payment!

Step 2: Know your rights

You have the RIGHT to compare different mortgage options through financial institutions.
You have the RIGHT to be informed about the total cost of your loan, at any time, including the interest rate, points and other fees.
You have the RIGHT to ask for a Good Faith Estimate of all loan and settlement charges before you agree to the loan and pay any fees.
You have the RIGHT to know what fees are not refundable if you decide to cancel the loan agreement.
You have the RIGHT to ask your mortgage broker to explain exactly what they will do for you.
You have the RIGHT to know how much the mortgage broker is getting paid by you and the lender for your loan.
You have the RIGHT to ask questions about charges and loan terms that you do not understand.
You have the RIGHT to a credit decision that is not based on your race, color, religion, national origin, sex, marital status, age, or whether any income is from public assistance.
You have the RIGHT to know the reason why your loan was turned down.
You have the RIGHT to ask for the HUD settlement costs booklet "Buying Your Home".

Step 3: Shop for a loan

Save money by doing your homework. Talk to several lenders, compare costs and interest rates and negotiate to get a better deal. Consider getting pre-approved for a loan.

Step 4: Learn about home buying programs

FHA loan programs offer lower down payments and are a good option for first-time home buyers. Do research in your state to see if there are special programs available as well. Also, speak with a trusted mortgage professional to help guide you.

Step 5: Shop for a home

Choose a real estate agent in your area, create a wish list for what you are looking for, or if you are considering building your own home. If you choose a home in a neighborhood with a Home Owners Association (HOA), be sure to request a copy of the HOA packet, so you can review before closing.

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.

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.

Step 8: Shop for homeowners insurance

Lenders require that you have homeowners insurance. Be sure to shop around.

Step 9: Sign papers

You're finally ready to go to "settlement" or "closing" Be sure to read everything before you sign!

Source: First Heritage Mortgage