HOMEOWNERSHIP TIPS

In honor of June Homeownership month in Illinois, we posted daily tips. For your benefit, we have consolidated the list here.

The home buying process might seem complicated or unmanageable. But knowing all the key parts to buying a home will help you plan for challenges and avoid mistakes.

We hope these tips increase your knowledge and help guide you with buying a home!

HOMEOWNERSHIP TIP #1

Attend homebuyer counseling.

• You can find good information on

buying a home from trusted

websites, family and friends, but

nothing is better than speaking with

an expert. Attending a homebuyer

counseling course will help you

understand the complexities of

buying a home, and will prepare you

for the responsibilities of

homeownership. Classes are free.

• Find a HUD approved Housing

Counselling Agency here.

HOMEOWNERSHIP TIP #2

Know what you can afford.

• There are several factors that

lenders take into consideration

when determining how much they

will lend to you for your home

purchase. The three most

important factors are you income,

debts and down payment.

• Learn more ways to increase your

purchasing power here.

HOMEOWNERSHIP TIP #3

Don’t buy if you can’t stay put.

• If you can’t commit to remaining in

one place for at least a few years,

then owning is probably not for you,

at least not yet. With the

transaction costs of buying and

selling a home, you may end up

losing money if you sell any sooner

– even in a rising market. When

prices are falling, it’s an even worse

proposition.

HOMEOWNERSHIP TIP #4

Shoring up your credit.

• Since you most likely will need to get

a mortgage to buy a house, you

must make sure your credit history

is as clean as possible. A few

months before you start house

hunting, get copies of your credit

report. Make sure the facts are

correct, and fix any problems you

discover.

• Obtain a copy of your credit report

by visiting

www.annualcreditreport.com or one

of the three credit bureaus

HOMEOWNERSHIP TIP #5

Aim for a home you can really afford.

• The rule of thumb is that you can

buy housing that runs about two-

and-one-half times your annual

salary. But you’ll do better to use

one of many calculators available

online to get a better handle on how

your income, debts, and expenses

affect what you can afford.

HOMEOWNERSHIP TIP #6

Can't put down 20%? You may still qualify for a loan.

• It’s important to know that putting down

20% is not a requirement to qualify for a

loan. There are a variety of public and

private lenders who, if you qualify, offer

low-interest mortgages that require a

small down payment.

• In fact, with IHDA loans, a borrower can

secure up to 105% financing if

structured correctly for certain lending

situations. In essence, the borrower can

purchase a home for 1% total

investment. For example, a buyer can

purchase a $200,000 home for as little

as $2,000 total cash investment.

• The IHDA network of qualified lenders

can help you with your particular

situation.

HOMEOWNERSHIP TIP #7

Buy in a district with good schools.

• In most areas, this advice applies

even if you don't have school-age

children.

• Reason - when it comes time to sell,

you'll learn that strong school

districts are a top priority for many

home buyers, thus helping to boost

property values

HOMEOWNERSHIP TIP #8

Get professional help.

• Even though the Internet gives

buyers unprecedented access to

home listings, most new buyers

(and many more experienced ones)

are better off using a professional

agent. Look for an exclusive buyer

agent, if possible, who will have your

interests at heart and can help you

with strategies during the bidding

process.

• Don’t wait – start now! You can find

an Illinois Realtor here.

• When you’re ready to secure a loan,

be sure to work with an IHDA

approved lender.

HOMEOWNERSHIP TIP #9

Choose carefully between points and rate.

• When picking a mortgage, you usually have the option of paying additional points -- a portion of the interest that you pay at closing -- in exchange for a lower interest rate. If you stay in the house for a long time -- say three to five years or more -- it's usually a better deal to take the points. The lower interest rate will save you more in the long run.

• When looking at rates, be sure to look at Welcome Home Illinois first. Welcome Home Illinois offers a below market interest rate for a 30-year fixed-rate mortgage. So when you’re ready to secure a loan, be sure to work with an IHDA approved lender.

HOMEOWNERSHIP TIP #10

Before house hunting, get pre-approved.

• Getting pre-approved will you save

yourself the grief of looking at

houses you can't afford and put you

in a better position to make a

serious offer when you do find the

right house.

• Not to be confused with pre-

qualification, which is based on a

cursory review of your finances, pre-

approval from a lender is based on

your actual income, debt and credit

history.

HOMEOWNERSHIP TIP #11

Use an IHDA approved lender for your home loan.

• IHDA finances the creation and

preservation of affordable housing

throughout the State of Illinois to

increase the supply of decent and

safe places for people of low or

moderate means to live. Let our

network of qualified lenders guide

you through the quick and easy

process of getting a home loan.

• In this video, see how easy the IHDA

loan process can be and how we

helped a family achieve the dream

of homeownership by purchasing

their first home.

HOMEOWNERSHIP TIP #12

Work with an expert--get homeownership counseling.

• Want advice on buying a home,

renting, default, foreclosure

avoidance, credit issues or reverse

mortgages? HUD sponsors housing

counseling agencies throughout the

country to provide free or low cost

advice. Housing counselors can

help you with home purchases AND

provide foreclosure prevention

counseling.

• In this video, see how foreclosure

prevention counseling helped a

family secure temporary financial

assistance in order to keep their

home.

HOMEOWNERSHIP TIP #13

Do your homework before bidding.

• Your opening bid should be based

on the sales trend of similar homes

in the neighborhood. So before

making it, consider sales of similar

homes in the last three months. If

homes have recently sold at 5

percent less than the asking price,

you should make a bid that's about

eight to 10 percent lower than what

the seller is asking. An Illinois

Realtor can help you gauge sales

trends and help prepare you to

make an educated bid.

HOMEOWNERSHIP TIP #14

Understand the down payment.

• The down payment is the initial

payment made when buying a

home. The amount of your down

payment will impact your ability to

get a mortgage as well as the loan’s

interest rate and terms.

• Remember, putting down 20

percent is not a requirement to

qualify for a loan.

HOMEOWNERSHIP TIP #15

Find the right property for you.

• Once you’ve determined your price

range, it’s time to start looking at

houses. Do you have ideas about

what you want in your new home?

Get that list on paper. Consider the

home’s interior (number of

bedrooms or bathrooms, type of

kitchen), amenities (yard, extra

playroom, storage space) and size,

as well as location and lifestyle,

commuting distance and

community, schools and services.

Whatever you put on the list should

be a reflection of you.

HOMEOWNERSHIP TIP #16

Be sure to get a home inspection.

• What is the value of a home

inspection? Though not required by

law, a satisfactory home inspection

(which will help you understand if

there are any hidden problems) is

an important part of successfully

buying the right home. The

inspection examines the condition

of the property and identifies

necessary repairs and potential

problems before you buy the home.

The inspection generally costs a few

hundred dollars, and is paid for by

the buyer.

HOMEOWNERSHIP TIP #17

Making an offer on a home.

• You’ve found a home that meets

your wants, needs and budget. It’s

time to make an offer. The offer is a

legally binding commitment sating

that you will buy the property for an

agreed-upon price provided certain

terms and conditions are met. An

accepted offer to purchase real

estate must be in writing and signed

by both parties.

• You don’t need to prepare the offer

alone. If you are working with a

Realtor or an attorney, they can help

you with this process.

HOMEOWNERSHIP TIP #18

Finalize your mortgage loan application.

• After the purchase agreement is

sent to your lender, they will finish

processing your loan application

and have the property appraised to

make sure it is worth the amount

you want to pay for it. Your lender

will help you through this process.

• Our IHDA network of qualified

lenders will guide you through the

loan application process from start

to finish.

HOMEOWNERSHIP TIP #19

Close on your home loan.

• Closing is a meeting to sign paperwork

and transfer title of the home from the

seller to you. To ensure your closing goes

smoothly, be sure to ask questions. A

week before closing, talk to the people

who are representing you, like your

Realtor and your loan officer, and tell

them you'd like to spend a couple of

minutes to discuss what to expect.

• Try to review your loan documents in

advance. It is a helpful way to ensure all

is going as planned and you don’t

receive any surprises. You can ask your

lender that you want to review the

documents before closing, or ask your

attorney to do so.

HOMEOWNERSHIP TIP #20

Moving in! • You have the keys to your home. What now?

If you have access to your new place a day or

so before the moving van is scheduled to

arrive, take that time to get a few things done

while your home is still empty. Give it a deep

clean. Cleaning the floors, baseboards and

windows will never be this easy again - you'll

have unhindered access to everything. Think

about it - no curtains to take down, no rugs or

furniture to move. If possible, hire a cleaning

service to help you get it all done. Also, now is

a great time to make any stylistic changes like

putting a fresh coat of paint on the walls or

sanding/staining floors if you have hardwood.

• Once finished and everything has been moved

in - take a nap! Those boxes aren't going

anywhere. By getting an adequate amount

of sleep you'll be ready and able to get started

on whatever you need to do the next day.

HOMEOWNERSHIP TIPS

For more helpful tips on what you should know

before buying a home and to learn more about

Welcome Home Illinois home loan program, visit

the Homebuyer Education page on the

Welcome Home Illinois website.

While there be sure to sign up for our IHDA

newsletter to stay on top of all of our program

news.