Buying Your Home:
Settlement Costs and Information
I. Introduction
CONGRATULATIONS! You have
decided to buy a new home. This booklet will help you take this
big financial step by describing the home buying, home financing,
and settlement process. Lenders and mortgage brokers are required
by federal law, the Real Estate Settlement Procedures Act ("RESPA"),
to give you this booklet. You should receive it when applying
for a loan, or within three business days afterwards. Real
estate brokers frequently hand out this booklet as well.
You
probably started the home buying process in one of two ways:
you saw a home you were interested in buying or you consulted
a lender to figure out how much money you could borrow before
you found a home (sometimes called pre-qualifying). The next
step is to sign an agreement of sale with the seller, followed
by applying for a loan to purchase your new home. The final
step is called "settlement" or "closing," where the legal title
to the property is transferred to you.
At
each of these steps you often have the opportunity to negotiate
the terms, conditions and costs to your advantage. This booklet
will highlight such opportunities. You will also need to shop
carefully to get the best value for your money. There is no
standard home buying process used in all localities. Your actual
experience may vary from those described here. This booklet
takes you through the general steps to buying a home, to eliminate,
as much as possible, the mysteries of the settlement process.
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