Eight Steps To Getting A Home Loan And Buying A House

Step 1 - Know How Much You Can Afford

Before you start looking for a house, you need to know how much you can afford in terms of monthly home loan payments, property taxes, maintenance and your general living costs.

Ginne Mae, a government housing initiative, offers a free calculator to help you figure out how much house you and your family can actually afford. It's available online at - http://www.ginniemae.gov/2_prequal/intro_questions.asp?Section=YPTH.

Step 2 - Know Your Rights

Whether you're a low-income home buyer or a wealthy real estate magnate, you have to know your rights. The HUD (Department of Housing and Urban Development) offers a very informative series of reports dedicated to protecting consumers and prospective home buyers from predatory lending practices. You can read them here: http://www.hud.gov/offices/hsg/sfh/pred/predlend.cfm.

Other resources to look into include the Real Estate Settlement Procedures Act (RESPA) and the Fair Housing Act.

Remember, you're the customer and you deserve to be treated with respect. As a borrower, you have the right to shop for financing, request a written Good Faith Estimate of your total costs, ask your mortgage broker exactly what they can do for you, ask any questions you need to clearly understand the process and associated expenses, understand your fee structure and the right to be evaluated for a loan on criteria that's free from discrimination.

Step 3 - Find a Loan

When looking for home financing, you want to find the best balance among low-rate financing, a loan that fits your lifestyle and plan, and a lender that's going to provide ongoing, quality customer support. Don't be stingy on the time investment at this stage, as finding the right lender will pay off for decades!

Step 4 - Find a House

Using a real estate agent and armed with your pre-qualification, you'll begin your search for a home. Based on what you can afford and your wish list of options and amenities you want in a home, you should be able to locate what you're looking for. Take the time to solicit recommendations from people you know and respect before selecting an agent.

Step 5 - Make an Offer

An offer is a tricky minefield of negotiations and real estate law. But, with guidance from your trusted real estate agent, you'll get through it. If you are uncomfortable with the price of a home, feel free to counter-offer what you believe it is truly worth in the current real estate market and that neighborhood.

Step 6 - Have the Home Inspected

Every offer should be contingent on a full home inspection. Hire a quality and experienced inspector who can give you a complete evaluation of the home and let you know if any major renovations or repairs are going to be needed. If the inspector identifies expensive needs, that will either afford you room for negotiation on the price or an opportunity to move on to another home.

Step 7 - Get Insurance

Lenders are going to require you to have insurance on the property, at least until they no longer own a large chunk of it.

Step 8 - Close the Deal

Last, but not least, is signing and closing the deal. Once you've gotten to this point, you've secured your financing, the offer has been accepted and you're finally signing the deed to your new home. Shortly thereafter, you will be moving in!