Know Your Rights as a Home Buyer

Before you start, there are many laws that protect you from scams, unnecessary expenses, and discrimination in the process of home buying. Know your rights!

Find out How Much Mortgage Can You Afford

You can save yourself a lot of wheel-spinning if you take a minute to figure out how much mortgage you can afford. Generally, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income (that's your monthly income before taxes and other paycheck deductions are taken out.) You also need to consider current loan interest rates. The lower the interest rate, the more expensive the home you'll be able to afford. Use this simple mortgage calculator to help determine how much you can afford in a mortgage payment.

Create Your "Wish List"

Make a wish list of the features you want in a home: 2 bedrooms? 3 bedrooms? 2 baths? 3 baths? 2 car garage or three? Single level only? Swimming pool or spa? Knowing what you're looking for will help you focus your search. And it will help your real estate broker, too.

Find a Real Estate Agent

You'll want to start searching for an agent as soon as you decide to buy a home. Find someone you think you'll be comfortable working closely with. Many of your friends and relatives have probably bought and sold their homes through agents. Ask them who they used and what their experiences were. Find an agent that specializes in the kind of home and area you want to live in. When you talk to prospective agents, ask questions about these areas and types of homes to see if they're knowledgeable. Most important, determine if their personal style is a good fit with your own.

Mortgages and Home Buying Programs

Many different kinds of mortgages are available to you. Read about them, and make sure you understand the pros and cons of each. Your real estate agent should be able to help you. Special Federal, State and local home buying programs may be available to help first-time and low-income home buyers. Shop around - you may be surprised at all your options!

Shopping for a Home

Now you really begin house-hunting. Your real estate agent will be able to find listings for you, based on your wish list. But don't stop there! You can do your own looking, and then ask your broker to show you the house. Start with the Internet. Pick up real estate flyers at local grocery stores and convenience stores. Read the real estate sections of your local newspaper. Drive around neighborhoods that interest you and write down addresses where there are "for sale" signs. Go to open houses. Try everything!

Home Inspections

When you make an offer on a home, it's a good idea to make your offer contingent on a home inspection, conducted by an independent qualified home inspector. You will have to pay for this inspection yourself, but it could keep you from buying a house that will cost you far more in repairs, down the road. If you are satisfied with the results of the inspection, then your offer can proceed. If you aren't,you may want to negotiate, asking the seller to pay for certain repairs or asking for a lower price.

Appraisals

Your lender will require you to get an appraisal of the house you want to buy, to make sure it's worth the money that you're borrowing. You may select your own appraiser, or you may ask your real estate agent to help you take care of that.

Homeowner's Insurance

Lenders may require that you have homeowners insurance, to protect both your interests and theirs. Like everything else, be sure to shop around for insurance that fits your needs.

Closing

Finally, you've gone through the whole process, and you're ready to go to "closing." We know you'll be excited, but be sure to read everything you sign! And before you go, read this important information about your rights.

Moving

Looks like you're ready to move. There's a lot to consider as you plan your move. The good news is that there's lots of help and your agent can recommend resources. Be sure to change your address with magazines and newspapers. The United States Postal Service has an online form you can use to forward your mail.