Steps to Buying A Home

The homebuying process can seem complicated, but if you take things step-by-step, you will soon be holding the keys to your own home!

Information provided by http://www.hud.gov

Step 1: Figure out how much you can afford


What you can afford depends on your income, credit rating, current monthly expenses, downpayment and the interest rate. The calculators below can help, but it is best to visit a lender to find out for sure.

Need help with your downpayment and/or closing costs?  A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that downpayment!

Step 2: Know your rights

     Real Estate Settlement Procedures Act (RESPA)
     Predatory lending

Step 3: Shop for a loan

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

     Looking for the best mortgage: shop, compare, negotiate - brochure
     Let FHA help you
     
     Learn about interest only loans

Step 4: Learn about homebuying programs

     Homebuying programs in your state
FHA loan programs offer lower downpayments and are a good option for first-time homebuyers.

     Let FHA help you
     HUD's special homebuying programs
     
     Homeownership for public housing residents
     Indian Home Loan Guarantee Program (Section 184)

Step 5: Shop for a home

     Choose a real estate agent
     Homes for sale (including HUD homes)
     Fixer-uppers" - home purchase and repair programs
     
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.

     Making an offer

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.

     For Your Protection Get a Home Inspection
      10 Questions to ask a home inspector

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!