A legal guide to buying your first home
Please ensure you read and understand the disclaimer before reading this article. Always consult a qualified lawyer for your legal advice.
Buying your first home is one of the biggest decisions you will ever make. This will probably be the largest purchase you ever make or have made thus far in your life. This is why it is very important not to take this decision lightly and to be certain you know how to do everything properly and legally. It is highly suggested that you seek legal advice when buying your first home to be certain you do not get in over your head or make mistakes when signing legal documents and entering contracts that you will be bound to by law.
You know that when you buy your first home, there are a lot of decisions to make. Chances are you will spend a considerable amount of time just finding the right home in the first place. You will want to look into the size, style, pricing and other important details of the home you are considering. In addition to this, there are many administrative details that cannot be overlooked.
But all of this paperwork and legal processing does not have to be overwhelming. Once you learn what it is all about and why you need it, the process will go more smoothly for you. First you need to understand that when buying your first home, there is a legal process which is involved. You need to take this legal process step by step and be sure you understand what is involved.
First is usually the finance portion of things. Once you find the house you want, you have to determine how you will pay for it. When getting a mortgage for your first home, it’s important to shop around and to get as much information as possible before signing on with any deals. You can save yourself a considerable amount of money by taking the time to shop around before you choose a mortgage lender. There is a lot of competition out there when it comes to mortgage lenders and this gives you many choices to sort through and decide upon.
When you are patient and take the time to explore all of your options, you will have better luck with your mortgage and an increased chance of getting a better price and a better deal. There are also certain credit laws in place to help protect homebuyers like you when going to purchase a home, whether it is your first or your fourth.
Loan providers are required to give you certain types of information upfront to help you make your decision. This information may include details about fees and charges in your agreement or pre-contractual statement and information about your rights and obligations with that lender.
In addition, there are certain things that your pre-contractual statement must include and you should be sure it does this before you sign. For example, it should state:
- How much you are borrowing
- The annual percentage rate
- How much interest is, how it is calculated and when it is charged
- How much credit fees are and how they will be calculated
- How you will be informed of any changes in your fees, interest rates or other charges
You must be certain you fully understand and agree with all these terms before signing the contract and continuing with the buying process.
Once you have chosen a lender and made the agreement, there is more to the actual buying process. You will often be required to give a deposit of some type. This initial deposit does not usually mean that the buyer will hold the property for you or that they will remove the property from the market. Instead, it just shows that you have a serious interest in the property. Usually when you make the initial deposit however, they will be less likely to show the property to someone else.
If they do choose to sell the property to someone else, they will of course have to refund your deposit. If the seller has a verbal agreement with you to sell the property and they have taken a holding deposit from you but end up selling the property to someone else, this can be referred to as gazumping. When this happens, it is usually because the buyer got a higher offer on the property and they are entitled by law to take the highest offer on their property. You should be sure you get contracts and agreements in writing before spending a lot of money on inspections, contracts, legal fees and more.
Some additional legal requirements when you buy your first home that you may be responsible for financially are:
- Pest inspection
- Housing or building inspection
- Surveying
- Insurance
- Closing costs
It’s very important that you complete the legal process of buying your first home properly. You want this to be a joyous experience where you can celebrate and enjoy your new home instead of having to worry about legal problems or lost money.
|
Lawyer Articles