Questions & Answers About Buying a Home...

1. How do I know if I'm ready to buy a home?

Ask yourself some questions:

a.) Do I have a steady source of income?
b.) Have I been employed on a regular basis for the last 2-3 years?
c.) Is my current income reliable?
d.) Do I have a good record of paying my bills?
e.) Do I have a few outstanding long-term debts, like car payments?
f.) Do I have money saved for a down payment?
g.) Do I have the ability to pay a mortgage every month, plus additional costs?

If you can answer "Yes" to these questions, you are probably ready to buy your own home.

2. What is my next step once I decide that I can purchase a home?

Contact a bank or mortgage company to do your financing for you. Ask your lender to get you pre-qualified and approved and you will be ready to look for that perfect home in the price range that you can afford.

3. How do I begin the process of buying a home?

Start by thinking about your situation. How much space do I need? Where would I like to live? Talk to friends and family, drive through neighborhoods, and look in the "Real Estate for Sale Magazine" or the real estate section of the newspaper.

4. How do I select the right real estate agent?

Start by asking family and friends if they can recommend an agent. Compile a list of several agents and talk to each before choosing one. Look for an agent who listens well and understands your needs, and whose judgement you trust. The ideal agent knows the local area well and has resources and contacts to help you in your search. Overall, you want to choose an agent that makes you feel comfortable and can provide all the knowledge and services you need.

5. What is my next step once I find a home?

Your real estate agent and you will sit down and write up a contract to purchase the property. Once you get the contract in place with the seller, you will be ready to go.

6. Do I need to hire an inspector for the property? What does an inspector do?

It's not required, but it is a good idea to hire an inspector. An inspector checks the safety of your potential new home. Home inspectors focus especially on the structure, construction, and mechanical systems of the house and will make you aware of only repairs that are needed. He will check the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, the HVAC system, water source and quality, the potential presence of pests, the foundation, doors, windows, ceilings, walls, floors and roof. Be sure to hire a home inspector that is qualified and experienced.

7. Do I need to be there for the inspection?

It's not required. The home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you'd like to purchase and it is a good time to ask general maintenance questions.

8. Are there other types of inspections required?

If your home inspector discovers a serious problem, a more specific inspection may be recommended. It's a good idea to consider having your home inspected for the presence of a variety of health-related risks like radon gas, asbestos, or possible problems with the water or waste disposal system.

9. Do I need homeowner's insurance?

Yes. 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.

10. Do I need flood insurance?

Your lender will require a flood insurance policy before lending any money to you if your are buying in a flood zone.

11. What can I expect to happen on closing day?

You'll present your paid homeowner's insurance policy and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaids, taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspection, warranties, etc.

Once you are sure you understand all the documentation, you'll sign the mortgage, agreeing that if you don't make payments the lender is entitled to sell your property and apply the sales price against the amount you owe plus expenses. You'll also sign a mortgage note, promising to repay the loan. The seller will give you the title to the house in the form of a signed deed.

You'll pay the lender's agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds, and you will be a homeowner!