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Buying your first home can be a thrilling and slightly scary process. But a little research will go a long way towards getting you in the door with a minimum of stress. The U.S. Department of Housing and Urban Development (HUD) has a detailed site on home buying that offers tips and tools for first-timers. HUD's glossary explains terms like "amortization," "closing costs," and "PITI." Smart Sense Publications also provides a home buying checklist that gives an overview of the steps involved. We'll summarize these sites, but check them out for more detail. To begin, you'll need to take a good
look at your finances. Your income and current debt level usually determine what kind of mortgage you can afford. In addition, you'll need cash on hand for the down payment and closing costs. There are numerous online mortgage calculators that allow you to plug in your income and debts and get an estimate of how much money you can borrow to buy a house. These sites can't guarantee that you'll get a mortgage for a certain amount, but they'll give you a rough idea of what you can expect. Before you start house-hunting, decide what you really need in a house. This is just like going to the grocery store with a shopping list -- it can save you time and money.
HUD offers a wish list PDF that can help you pinpoint your housing needs. Next, you may want to bring in professional help. It's not essential, but hiring a real estate agent can be useful because agents often know the local market. Agents can also play a part in contract negotiations. In some places, a home-buyer's lawyer deals with the contract and closing, so ask around and find out what's typical for your area. You may want to start looking at mortgages early in the process. Thousands of different home loans are available, and they all have certain terms and requirements. Banks and mortgage brokers can help find a loan that fits
your needs. You can also research mortgages online. After you know what you can afford and what you want, it's time to look at houses. Compare each house to your wish list, and take notes along the way. Housing markets vary wildly -- sometimes, houses sell very fast and with heavy competition, other times sales are slow. Do some research or ask your agent, and be prepared for whichever situation faces you. Once you find a home you want to buy, you'll make an offer and enter negotiations. This is probably when your loan processing starts, and you'll have to supply information to your mortgage lender, such as proof of income and past bank statements. You'll want a professional house inspection before you buy, and your lender usually requires an
appraisal. Towards the end of the process, you'll need to fork over a down payment and closing costs. Lenders also require that you buy homeowner's insurance. And before it's over, you'll sign stacks of paperwork. But after all that, you get the keys to your new home, and you'll be out from under any landlord's thumb. We think the ordeal is worth it in the end. Good luck and happy hunting!
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