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Home Buying Guide

Are you a first-time home buyer? Are you feeling confused about the myriad complicated steps in the home buying process? Don’t worry, this section can help walk you through it. Below you will find introductory information on buying a home, including answers to frequently asked questions; a glossary of common terms; insightful tips on co-buying a house; and how to buy second homes. This section will also help you understand what an attorney can do for you when buying a home, as well as important questions to ask the professionals you encounter, such as attorneys, real estate agents, mortgage agents, and home inspectors.

Are You Ready to Buy a Home?

A home is the biggest purchase most people will ever make in their lifetimes, often matched by a lengthy loan commitment of up to 30 years. The type of loan you get, distinguished mainly by its interest rate, will depend primarily on your credit score and the amount of cash you have on hand for a down payment. Your ability to purchase a home will largely depend on the following:

  • Work History: Be ready to explain fluctuations in income and gaps in your employment history.
  • Credit History: This includes timeliness of paying bills, whether you have any loan defaults, and whether you carry large balances on your credit cards.
  • Money Saved: How much have you saved, and are you continuing to save money? Down payments are usually at least 5 percent of the home's price.
  • Loan Prequalification: Getting prequalified for a loan is a great way to determine exactly how much you can afford before you start looking at available real estate.

In addition to the initial costs and monthly mortgage payments, home ownership also has substantial long term costs, such as maintenance, upkeep, insurance, property taxes, and other associated costs. Make sure you budget enough for both predictable maintenance costs and unexpected emergencies.

Buying Your First House: Getting Started

When you buy your first home, it's most likely the biggest and most life-changing financial transaction you will have ever made. The process itself has many important steps that must be followed in sequence, with deadlines for certain processes and the constant chance that things could fall through at the last minute. But, as with most things in life, proper preparation can alleviate many of these concerns. Once you have determined your financial where withal for buying a home, ideally with a price range in mind, you can turn your attention to the available properties on the market.

Once you have found homes that you like that are within your price range, you'll need to get the answers to the following questions:

  • What is the home's condition? - Depending on your own abilities, a fixer-upper may be a great bargain; but you always need to consider the cost of crucial big-ticket items such as the roof and foundation.
  • Is this neighborhood the right fit? - Depending on your needs, you may want to look at the quality of the schools, access to transit, distance from work, upkeep of neighbors' homes, etc. Also, do homes in this neighborhood hold their values?
  • How much should I offer? - To determine this, you must look at the offer price, compare it to comparable listings, consider the current climate of the local real estate market, and then decide how much you feel comfortable paying.

Making an Offer: The Contract

When you're ready to buy and have chosen a home, it's time to make the first of what could turn out to be many offers and counter-offers. If the seller accepts your initial offer without conditions or alterations, then it becomes a legally binding contract and the wheels are set in motion for the sale and transfer of deed. However, most real offers have "safety net" clauses that provide wide leeway for prospective buyers who change their mind or choose a different home.

If you are also selling a home, then you probably already are working with a real estate agent. But if not, and especially if this is your first home, you may want to get in touch with a real estate agent and/or attorney to make sure you fully understand the terms.

For additional tips and information about buying a home, click on one of the topics below.

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