Tips on being a smart home buyer

1. Before you buy a home, attend a home ownership education course offered by a U.S. Dept. of Housing and Urban Development (HUD)-approved, nonprofit counseling agency.
   
   
2. Know and understand your credit – Your credit score may affect the loans available to you.  You may request a free copy of your credit report on-line at (www.annualcreditreport.com).  Make sure the information is correct.
   
   
3. Seek advice – Learn more about credit, budgeting, and the mortgage process.  Before signing or paying any fees, consult with an attorney or someone you trust about the terms of the loan.  Visit www.homeloanlearningcenter.com for more information.
   
   
4. Interview several real estate professionals (agents), ask for and check references before you select one to help you buy or sell a home.
   
   
5. Get information about the prices of other homes in the neighborhood.  Don’t be fooled into paying too much.
   
   
6. Hire a properly qualified and licensed home inspector to carefully inspect the property before you are obligated to buy.  Determine whether you or the seller is going to be pay for the repairs.  If you have to pay for the repairs, determine whether or not you can afford to make them.
   
   
7. Shop for a lender and compare costs.  Be suspicious if anyone tries to steer you to just one lender.
   
   
8. Ask questions – Ask your lender a lot of questions.  Make sure all your questions are answered to your satisfaction before you sign any documents.
   
   
9. Compare lenders – Remember, rate is not the only factor that should be considered.  Visit several lenders to compare interest rates, loan servicing practices, fees and other terms of the loan.  Be wary of deals that seem too good to be true – they probably are!
   
   
10. Walk away from high pressure or confusing sales tactics – Take the time necessary to review and understand the loan that is being offered to you.  If you qualify for a loan now, you should still be qualified for the loan after you have had time to review it and consult with someone you trust.
    
    
11. Understand all the terms of the loan – There is more to a loan than just the monthly payment and interest rate.  You should also know the annual percentage rate (APR), total loan amount, lender fees, points, and term length.  Also, ask about mortgage insurance, rights of rescission, and prepayment penalties.
    
    
12. Do NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, the source of your down payment, failing to disclose the nature and the amount of your debts, or even how long you have been employed.  When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete.  Lying on a mortgage application is fraud and may result in criminal penalties.
    
    
13. Do not let anyone convince you to borrow more money than you know you can afford to repay.  If you get behind on you payments, you risk losing your house and all of the money you put into your property.
    
    
14. Never sign a blank document or a document containing blanks.  If information is inserted by someone else after you have signed, you may still be bound to the terms of the contract.  Insert “N/A” (not applicable) or cross through any blanks.
    
    
15. Read everything carefully and ask questions.  Do not sign anything that you don’t understand.  Before signing, have your contract and loan agreement reviewed by an attorney skilled in real estate law, consult with a trusted real estate professional or ask for help from a housing counselor with a HUD-approved agency.  If you cannot afford an attorney, take your documents to the HUD-approved agency near you.  Find out if they will review the documents or can refer you to an attorney who will help you for free or at low cost.
    
    
16. Be suspicious when the cost of a home improvement goes up if you don’t accept the contractor’s financing.
    
    
17. Be honest about your intention to occupy the house.  Stating that you plan to live there, when in fact, you are not violates federal law and is a crime.
    
    
18. Cash at closing – Make sure your lender will deliver the funds at closing.  You have a legal obligation to close on the date specified in the offer to purchase contract.  You are not relieved of this obligation just because your lender does not provide the funds on time.