Steps for Buying a Home

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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!

Nine steps to buying a home

  1. Figure out how much you can afford
  2. Know your rights
  3. Shop for a loan
  4. Learn about homebuying programs
  5. Shop for a home
  6. Make an offer
  7. Get a home inspection
  8. Shop for homeowners insurance
  9. Sign papers

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. By calculating the things below can help, but it is best to visit a lender to find out for sure.

 -  How much home can you afford?
 -  Buying vs. Renting
 -  Home Economics

Need help with your downpayment and/or closing costs?

 -  Check out homebuying programs in your state

A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that downpayment!

 -  Find a housing counselor near you

Step 2: Know your rights about the following acts by visiting the U.S. Department of Housing and Urban Development at www.HUD.

 -  Fair Housing: Equal Opportunity for All
 -  Real Estate Settlement Procedures Act (RESPA)
 -  Borrower's rights
 -  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
 -  Let FHA help you
 -  Learn about interest only loans
 -  Avoid predatory lenders

Step 4: Learn about homebuying programs

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

 -  Let FHA help you
 -  HUD's special homebuying programs
 -  Good Neighbor Next Door (formerly known as Teacher/Officer/Firefighter Next Door)
 -  Hurricane Evacuees discounted sales
 -  Homeownership for public housing residents
 -  Indian Home Loan Guarantee Program (Section 184)

Step 5: Shop for a home

 -  Choose a real estate agent
 -  Wish list - what features do you want?
 -  Home-shopping checklist – take this list with you when comparing homes
 -  Homes for sale (including HUD homes)
 -  "Fixer-uppers" - home purchase and repair programs
 -  Manufactured (mobile) homes
 -  Build a home

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.


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. Find out what questions you should ask an inspector and what to look for by visiting the U.S. Department of Housing and Urban Development at http://www.hud/.

 -  For Your Protection Get a Home Inspection!
 -  Question your home inspector

Step 8: Shop for homeowners insurance

Lenders require that you have homeowners insurance. Be sure to shop around.

 -  Shop around for homeowners insurance
 -  Discover ways to lower your homeowners insurance costs

Step 9: Sign papers

You're finally ready to go to "settlement" or "closing." Be sure to read everything before you sign!

[Logo: HUD seal] U.S. Department of Housing and Urban Development
451 7th Street S.W., Washington, DC 20410
Telephone: (202) 708-1112   TTY: (202) 708-1455