Checklist for first -time home buyers

Being a homeowner continues to be the American Dream for most people. Having a home you can call your own is much more than the ability to be free from the landlord and the equity you can expect to gain over time. It is an experience unmatched by everyday activities. However, many first-time home buyers fail to realize everything involved in acquiring and maintaining a home. Here is a checklist that will be a reality check for some:

1. Down Payment: Even with the most favorable mortgage loans, a buyer can expect to make a down payment of at least 5 percent. With additional money invested in your new home, you may get better interest rates and terms.

2. Mortgage Insurance: If your down payment is less than 20 percent, you can expect to pay mortgage insurance. The product goes by several names according to the loan product that fits your circumstance. All of them are created to ensure the lender that they will not lose money by taking a larger risk for borrowers with lower down payments. The borrower pays the premiums in their mortgage payments and sometimes up front.

3. Appraisal Fees: The mortgage company wants to be assured that it is not loaning you money for a home that is not worth what you are willing to pay for it. They hire an independent appraiser to visit the home, research comparable sales and derive at an appraised value.

4. Survey Costs: Another thing that can cause you grief is when the boundaries of your property are different than they appear to be. Both the mortgage company and the title company want to be confident that the property lines are correct. A professional surveyor will visit the property, chart out the visible boundaries such as fence lines and the footprint of your home and then compare the physical attributes of the property to the legal description of the home site.

5. Title Insurance: The Owners Title Policy assures you that the property is being conveyed with a clear title. While a lot of research is done before the title insurance policy is issued, there is still a risk that the records were incomplete or simply wrong.

6. Moving Costs: Hiring a moving company can get expensive. It can also be a big task to interview several companies and make the selection. Even when you have family and friends to help you, there will be costs involved. Make arrangements as early as possible to make sure you dont get surprised.

7. Home Service Contracts: Many call these contracts a Home Warranty, but be sure to read the fine print.

Sellers often are willing to pay for a policy to benefit the new buyer, but you will still want to make the selection. Companies vary greatly in what they cover, the exceptions to the coverage, claim procedures and the deductible.

Use this checklist to prepare for your life as a new homeowner.

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Checklist for first -time home buyers