A paid homeowner’s insurance policy (or a paid receipt for one) is required at closing, so arrangements will have to be made prior to that day. Plus, involving the insurance agent early in the home buying process can save you money. Insurance agents are a great resource for information on home safety and they can give tips on how to keep insurance premiums low.
When you turn in your application, you’ll be required to pay a loan application fee to cover the costs of underwriting the loan. This fee pays for the home appraisal, a copy of your credit report, and any additional charges that may be necessary. The application fee is generally non-refundable.
Narrowing your search for the perfect home can be a little easier if you start with a few neighborhoods and work your way out. Keep in mind access to shopping, schools and your more travelled routes.
A foreclosure property is a home that has been repossessed by the lender because the owners failed to pay the mortgage. Thousands of homes end up in foreclosure every year. Economic conditions affect the number of foreclosures, too. Many people lose their homes due to job loss, credit problems or unexpected expenses. It is wise to be cautious when considering a foreclosure. Many experts, in fact, advise inexperienced buyers to hire an expert to take them through the process. It is important to have the house thoroughly inspected and to be sure that any liens, undisclosed mortgages or court judgments are cleared or at least disclosed.
The two don’t really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing. Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that’s an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.
Payments increase or decrease on a regular schedule with changes in interest rates; increases subject to limits. Types: Balloon Mortgage – Offers very low rates for an initial period of time (usually 5, 7, or 10 years); when time has elapsed, the balance is due or refinanced (though not automatically). Two-Step Mortgage – Interest rate adjusts only once and remains the same for the life of the loan; ARMS linked to a specific index or margin. Advantages: Generally offer lower initial interest rates; Monthly payments can be lower; May allow borrower to qualify for a larger loan amount.
The U.S. Department of Housing and Urban Development, also known as HUD, helps people by administering a variety of programs that develop and support affordable housing. Specifically, HUD plays a large role in homeownership by making loans available for lower- and moderate-income families through its FHA mortgage insurance program and its HUD Homes program. HUD owns homes in many communities throughout the U.S. and offers them for sale at attractive prices and economical terms. HUD also seeks to protect consumers through education, Fair Housing Laws, and rehabilitation initiatives.
Conventional mortgage loans usually can’t be assumed by new buyers, but FHA and VA loans can be. The borrower must qualify for the loan and come up with a large enough down payment to cover the purchase, but for buyers able to clear those hurdles, the lower overall origination costs can make this an attractive option.
The Truth in Lending Act gives homeowners three days from the day the account was opened to cancel their credit line. However, the homeowner must inform the lender in writing within those three days. According to the FDIC, the lender then must cancel its security interest in the home and return all fees paid.
There isn’t a definitive answer to this question. You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn’t mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don’t want to worry initially about upkeep and repairs.
