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| Frequently Asked Questions |
Q: HOW DO I KNOW IF I'M READY TO BUY A HOME?
A: You can find out by asking yourself some questions:
- Do I have a steady source of income (usually a job)? Have I
been employed on a regular basis for the last 2-3 years? Is my
current income reliable?
- Do I have a good record of paying my bills?
- Do I have few outstanding long-term debts, like car payments?
- Do I have money saved for a down payment?
- 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.
Q:HOW DOES PURCHASING A HOME COMPARE WITH RENTING?
A:The two don't really compare at all. The one advantage of
renting is being generally free of most maintenance responsibilities.
But by renting, you lose the chance to build equity, take advantage
of tax benefits, and protect yourself against rent increases. Also,
you may not be free to decorate without permission and may be at the
mercy of the landlord for housing.
Owning a home has many benefits. When you make a mortgage payment,
you are building equity. And that's an investment. Owning a home also
qualifies you for tax breaks that assist you in dealing with your
new financial responsibilities- like insurance, real estate taxes,
and upkeep- which can be substantial. But given the freedom, stability,
and security of owning your own home, they are worth it.
Q: WHAT SHOULD I LOOK FOR WHEN DECIDING ON A
COMMUNITY?
A: Select a community that will allow you to best live your
daily life. Many people choose communities based on schools. Do you
want access to shopping and public transportation? Is access to local
facilities like libraries and museums important to you? Or do you
prefer the peace and quiet of a rural community? When you find places
that you like, talk to people that live there. They know the most
about the area and will be your future neighbors. More than anything,
you want a neighborhood where you feel comfortable in.
Q: HOW CAN I FIND OUT ABOUT LOCAL SCHOOLS?
A: You can get information about school systems by contacting
the city or county school board or the local schools. You can also
get information online by visiting Links - Education
Q: WHAT SHOULD I LOOK FOR WHEN WALKING THROUGH
A HOME?
A: In addition to comparing the home to your minimum requirement
and wish lists, use the HUD Home Scorecard and consider the following:
- Is there enough room for both the present and the future?
- Are there enough bedrooms and bathrooms?
- Is the house structurally sound?
- Do the mechanical systems and appliances work?
- Is the yard big enough?
- Do you like the floor plan?
- Will your furniture fit in the space? Is there enough storage
space? (Bring a tape measure to better answer these qusetions)
- Does anything need to be repaired or replaced? Will the seller
repair or replace the items?
- Imagine the house in good weather and bad, and in each season.
Will you be happy with it year 'round?
Q: WHAT IS EARNEST MONEY? HOW MUCH SHOULD I SET
ASIDE?
A: Earnest money is money put down to demonstrate your seriousness
about buying a home. It must be substantial enough to demonstrate
good faith and is usually between $1000 - $2,000 in the case of a
new home. If your offer is accepted, the earnest money becomes part
of your down payment or closing costs. If the offer is rejected, your
money is returned to you. If you back out of a deal, you must forfeit
the entire amount.
Q: WHAT SHOULD I LOOK OUT FOR DURING THE FINAL
WALK-THROUGH?
A: This will likely be the first opportunity to examine the
house without furniture, giving you a clear view of everything. Check
the walls and ceilings carefully, as well as any work the seller agreed
to do in response to the inspection. Any problems discovered previously
that you find uncorrected should be brought up prior to closing. It
is the seller's responsibility to fix them.
Q: WHAT SHOULD I LOOK OUT FOR DURING THE FINAL
WALK-THROUGH?
A:There may be closing costs customary or unique to a certain
locality, but closing costs are usually made up of the following:
- Attorney's or escrow fees (yours and your lender's if applicable)
- Property taxes (to cover tax period to date)
- Interest (paid from date of closing to 30 days before first
monthly payment)
- Loan origination fee (covers lender's administrative costs)
- Recording fees
- Survey fee
- First premium of mortgage insurance (if applicable)
- Title insurance (yours and your lender's)
- Loan discount points
- First payment to escrow account for future real estate taxes
and insurance
- Paid receipt for homeowner's insurance policy (and fire and
flood insurance if applicable)
- Any documentation preparation fees
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Equal Housing Opportunity 
