So finally it's time you live the
American Dream. You have worked hard and saved every extra dime you had. You
have enough money saved up and are ready to begin your search. Well
congratulations my friend, but slow down a bit. You still have a lot to learn.
Since this is the first time you
are buying a house you should become familiar with the terms and paperwork
involved. A new buyer should at minimum know what the following refer to:
Earnest money, Bid, RESPA, HUD-1, Deed vs Mortgage, Escrow, Mortgage
Ins./Private Mortgage Ins., and closing costs. There are many other terms but
these involve your money so you should know what they mean.
Evaluate your finances so you
don't buy a home for more than you can afford. Just because the financed
payment is $400, that won't be your actual payment. If your loan has mortgage
insurance it will be added to the monthly cost. Then you have your taxes and
homeowners insurance. Often a mortgage company will offer to escrow those into
your monthly payment. This is where the lender pays the ins and taxes one time
a year and you pay them back in installments.
Once you start looking at houses
you will want to make sure the house you choose won’t need any major repairs.
Most homes will have a few minor cosmetic issues, which is okay. You want to
stay away from any of the major issues. In the event the house does need
repairs find out if the seller will take care of them before the closing date
arrives. Often the seller will discount the cost of the home in lieu of making
the repairs. You need to be sure to check with your lender to make sure they
will still finance the property with the repairs incomplete.
Take a look at the appliances as you inspect the property. Determine how old
they are and if they are energy efficient. This will give you an idea if new
appliances will need to be purchased in the near future. Also look at the
ceilings and under the sinks for any signs of water leaks. When you are in the
bathrooms be sure to turn on the water in sinks and showers to check the water
flow. You will also want to flush the toilet to ensure the septic line is not
blocked. If you are able bringing a plumber to inspect all the pipes throughout
the house, even better.
One place new home buyers often
fail to inspect is the attic. Always take a moment to take a quick look. Check
for insulation and proper ventilation. The attic aids in keeping the house cool
in summer and warm in winter.
Since you are purchasing your
home it is assumed you plan to live there for a long time. So you will want to
drive by the property at night to get a feel of the security. Visit during the
day and on weekends as well to get a feel of the people in the area. Once you
have looked everything over and the home is something you are greatly
interested in, call the agent. It is now time to make a bid on the house. Just
don't forget to stay within your budget and account for taxes and ins to
increase your payment. Good Luck and Congratulations!