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information has been gathered from the publications
of the following agencies: U.S. Department of
Housing and Urban Development; American Bankers
Association; National Foundation for Consumer
Credit; and Neighborhood Reinvestment Corporation |
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Frequently Asked Questions
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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 judgment 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.
Is an older home a better value than
a new one?
There isn't a definitive answer to this question. You should
look at each home for its individual characteristics. Generally,
older homes may be in more established neighborhoods, offer
more ambiance, and have lower property tax rates. People who
buy homes, however, shouldn’t mind maintaining their home
and making some repairs. Newer homes tend to use more modern
architecture and systems, are usually easier to maintain, and
may be more energy-efficient. People who buy new homes often
don’t want to worry initially about upkeep and repairs.
Do I need a lawyer to buy a home?
Laws vary by state. Some states require a lawyer to assist in
several aspects of the home buying process while other states
do not, as long as a qualified real estate professional is involved.
Even if your state doesn’t require one, you may want to
hire a lawyer to help with the complex paperwork and legal contracts.
A lawyer can review contracts, make you aware of special considerations,
and assist you with the closing process. Your real estate agent
may be able to recommend a lawyer. If not, shop around. Find
out what services are provided for what fee, and whether the
attorney is experienced at representing homebuyers.
What is earnest money? How much should
I set aside?
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 1-5% of the purchase price
(though the amount can vary with local customs and conditions).
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
may forfeit the entire amount.
What is included in a monthly mortgage
payment?
The monthly mortgage payment mainly pays off principal and interest.
But most lenders also include local real estate taxes, homeowner's
insurance and mortgage insurance (if applicable).
How can I find out information about
my credit history?
There are three major credit reporting companies: Equifax, Experian,
and Trans Union. Obtaining your credit report is as easy as
calling and requesting one. Once you receive the report, it’s
important to verify its accuracy. Double check the “high
credit limit,” “balance”, and “past due”
columns. It’s a good idea to get copies from all three
companies to assure there are no mistakes since any of the three
could be providing a report to your lender. Fees, ranging from
$5-$20, are usually charged to issue credit reports but in some
circumstances you can get a free one. Contact the reporting
companies at the number listed.
Equifax: 1-800-685-1111
Experian: 1-888-397-3742
Trans Union: 1-800-916-8800
What are discount points?
Discount points allow you to lower your interest rate. They
are essentially prepaid interest, with each point equaling 1%
of the total loan amount. Generally, for each point paid on
a 30-year mortgage, the interest rate is reduced by 1/8 (or
.125) of a percentage point. When shopping for loans, ask lenders
for an interest rate with 0 points and then see how much the
rate decreases with each point paid. Discount points are smart
if you plan to stay in a home for some time since they can lower
the monthly loan payment. Points are tax deductible when you
purchase a home and you may be able to negotiate for the seller
to pay for some of them.
What is Annual Percentage Rate (APR)?
To give customers a true picture of the interest rate they are
paying, lenders have to compute an annual percentage rate or
APR. This rate includes the monthly interest, the Points, and
other fees charged by the lender, such as loan application fees
and processing fees. The APR tells you the total rate you are
paying. When you are shopping for mortgage loan products, look
at the APR to compare the loans' various interest rates. It
is the best measurement of how much your loan really costs
What responsibilities do I have during
the lending process?
To ensure you won't fall victim to loan fraud, be sure to follow
all of these steps as you apply for a loan:
-Be sure to read and understand everything before you sign.
-Refuse to sign any blank documents.
-Do not buy property for someone else.
-Do not overstate your income.
-Do not overstate how long you have been employed.
-Do not overstate your assets.
-Accurately report your debts.
-Do not change your income tax returns for any reason.
-Tell the whole truth about gifts.
-Do not list fake co-borrowers on your loan application.
-Be truthful about your credit problems, past and present.
-Be honest about your intention to occupy the house.
-Do not provide false supporting documents. |
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AAFE
CDF offers FREE
in-depth 3-day workshops on the home-buying process.
Class Schedule:
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Home Buying
Workshop Series
Learn the ins and outs of the home buying process in this 3-week seminar. Material includes steps to purchasing and finding an appropriate home, the inspection and legal processes, and financial responsibilities.
Time:
11am–4pm
Date:
9/7/08, 9/14/08, 9/21/08
Place:
AAFE Queens Office
133-04 39th Ave, Flushing, NY 11354
Click here for details or call (212) 964-2288 or (718) 961-0888
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Also, see other homebuying related
activities schedule on Home Page |
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