|
Real estate agents
represent home sellers not buyers. You can often get a lower sale price on a
house by employing a buyer-broker who works for you not the seller. Don’t
purchase any house until a home inspector that you selected has examined it.
Home
Financing
When shopping for a
mortgage to buy a house, ask for details on the same loan amount, loan term,
and type of loan so that you can compare the information.
• Research current
interest rates in the real estate section of your local newspaper, by using the
Internet, or by calling at least six lenders for information. Ask for the APR,
which takes into account not only the interest rate but also points, broker
fees, and certain other credit charges that you may be required to pay,
expressed as a yearly rate. The website www.gomez.com has a Mortgage Scorecard that can
help you find online sources for comparisons.
• You can also get
information on the mortgage process at Fannie Mae’s website
www.homepath.com, or at
www.privatemi.com and
www.stopmortgagefraud.com.
• Contact Fannie
Mae for more information about the home loan process: Fannie Mae Corporate
Headquarters, 3900 Wisconsin Ave. NW, Washington DC, 20016. Phone 202-752-7000.
You can also e-mail Fannie Mae at headquarters@fanniemae.com or
visit them online at www.fanniemae.com.
• Check the rates
for 30-year, 20-year and 15-year mortgages. You may be able to save thousands
of dollars in interest charges by getting the shortest-term mortgage you can
afford.
• Ask whether the
rate is fixed or adjustable. The interest rate on adjustable rate mortgage
loans (ARMs) can vary a great deal over the lifetime of the mortgage. An
increase of several percentage points might raise payments by hundreds of
dollars per month.
• If a loan has an
adjustable-rate, ask how your rate and loan payment will vary, including
whether payments will be reduced when rates go down.
• Ask whether
prepayment of a loan is allowed and if there is a penalty for doing
so.
• Find out what
down payment is required. Some lenders require 20 percent of the home’s
purchase price as a down payment. But many lenders now offer loans that require
less. In these cases, you may be required to purchase private mortgage
insurance (PMI) to protect the lender.
• If PMI is
required, ask what the total cost of the insurance will be. Also, how much will
the monthly mortgage payment be when the PMI premium is added and how long you
will be required to carry PMI.
The Real Estate
Settlement Procedures Act (RESPA) requires lenders to give you information on
all closing costs and escrow account practices. Any business relationships
between the lender and closing service providers or other parties to the
transaction must also be disclosed. Many of the fees are negotiable.
More information is
available from the Federal Trade Commission, the Federal Reserve Board, and the
Department of Housing and Urban Development. |
