Buying a Home
Buying a home is perhaps the most significant investment a consumer will ever make. This purchase is a momentous event that can also be confusing, frustrating and sometimes scary.
- Get the prices of comparable homes in the area. Knowing the prices of other homes will help you avoid paying too much. Be sure to ask your real estate agent for a listing of “comps.”
- Always have the property inspected by a licensed inspector. Visit the Arkansas Home Inspector Registration Board at AHIRB.org for a list of registered inspectors.
- Make sure you obtain all the relevant information when shopping for a mortgage, such as the interest rate, term, costs and type of mortgage (fixed or adjustable rate).
- RESEARCH LENDERS! Check with multiple lenders for rates on the same type of loan and loan amount. Make sure you know whether the interest rate is a fixed rate or adjustable rate. If it is an adjustable rate, be sure to ask your lender when and how the interest rate and payment will change.
- Find out how much of a down payment is required. Chances are, if the down payment is less than 20 percent of the home’s purchase price, you will be required to purchase Private Mortgage Insurance (PMI). If PMI is required, ask how much the payment will be with PMI included. Find out how long a PMI payment will be required.
- Ask if there is a penalty for paying off your loan early.
- It is likely that your mortgage will be transferred from one lender to another once, if not several times, during the life of the loan. Federal law now requires that your new lender or servicer notify you within 30 days of the loan transfer.
The U.S. Department of Housing and Urban Development (HUD) provides free counseling nationwide on how to buy a home. To contact the HUD office nearest you, call (800) 569-4287.