Home Inspections and Warranties

Many developers provide buyers with a one-year home warranty. This may be something you want to negotiate for if it is not offered. The standard warranty offers a buyer of a new home a 10-year warranty against certain physical defects, such as faulty roofing, heating, electrical services and plumbing. A one-time insurance premium averages about $2 per $1,000 of the home's selling price. The cost may be paid by the broker, seller or buyer, or it may be shared.

Most experts recommend that home buyers get prequalified for a loan as their first step in the process. By being prequalified, a buyer knows exactly how much house they can afford and, therefore, they can make more informed decisions in the market place.

Almost all mortgage lenders now prequalify people, and many of them can even do it on the internet.

Most experts recommend it For example, Dian Hymer, author of "Buying and Selling a Home" A Complete Guide, Chronicle Books, San Francisco, wrote, "Just because a house is new doesn't mean it was built correctly, she writes. "City inspectors sometimes overlook code violations. Ask the builder for copies of any reports on the property, including the soils report. "Have your inspector review these, as well as architectural plans, surveys, engineering calculations, city building inspections and an y other construction documents. Your inspector should help you prepare a quot;punch list" of items the builder needs to complete by closing, according to Hymer.

When choosing an inspector, the person should be either an engineer, an architect or a contractor. Try to hire an inspector who belongs to one of the home inspection trade organizations. The American Society of Home Inspectors (ASHI) has developed formal inspection guidelines and a professional code of ethics for its members. Membership to ASHI is not automatic; proven field experience and technical knowledge about structures and their various systems and appliances are a prerequisite.

Building codes are designed to provide minimum standards to safeguard the health, safety and welfare of the public by regulating and controlling the design, construction, quality, use and occupancy, location and maintenance of all buildings and structures. Some codes (plumbing codes, electrical codes and fire codes) are divided into specialized areas. Codes are enforced by the issuing of building permits and certificates of occupancy and by inspections, with fines being imposed on violators.

Any owner contemplating an addition and/or change to his or her property should first check with the appropriate county or municipal building department to avoid any building code violations, which will generally render a seller's title unmarketable. In addition, a seller's failure to disclose such violations (they have knowledge of) may constitute a material misrepresentation, entitling the buyer to rescind the transaction and obtain the return of his or her money.

There are numerous types of credit report problems (which may or may not be your fault) that would cause a lender to reject your application for a loan.

Among the problems are missing a credit card payment, defaulting on a prior loan, filing for bankruptcy in the past seven years or not paying your taxes.

Other black marks on a credit report include a judgment filed against you or any collection activity. If you feel that your credit report is wrong, experts say it's best to take it up with the organization or company claiming you owe them money. But if you've been late paying your bills, regroup by paying in full and on time for six months to a year to prove to the lender that the late payments were an aberration.

Numerous programs exist to help first-time buyers purchase a home. A host of private lenders offer low-down-payment loans. The U.S. Department of Housing and Urban Development offers a variety of programs through the Federal Housing Administration that require approximately 4 to 5 percent cash down.

Loan limits vary depending on the county where the property is located. Secondary mortgage firm, Fannie Mae through participating lenders allows people to buy with just 3 percent down payments. For details, borrowers should contact lenders who offer government-insured loans. Fannie Mae's Community Home Buyers Program has an income cap of 120 percent of the area's median income. The borrower also must attend a seminar on home ownership and the home buying process. It is not geared only for first-time home buyers, unlike many of the other low down payment programs on the market.