Searching for a house in South Dakota requires the right knowledge and resources to finance, find and close on your mortgage. The Department of Housing and Urban Development (HUD) has plenty of advice on doing this in the smoothest way possible.
Check out some of the tips HUD offers with regards to shopping for a home.
Knowing Your Rights
When it comes to home lending, as the borrower, you’re afforded certain rights. There are two documents in particular that HUD insists every borrower receive when setting up financing on a new home purchase—the Sample Loan Estimate and the Sample Closing Disclosure. The estimate gives you an easily comparable amount to shop around with other mortgage providers. The disclosure outlines the costs you’ll likely encounter throughout the closing process so there are no surprises.
Understanding Fair Housing
Your rights as the buyer go beyond just lending responsibilities—they also include protection from discrimination, known as the Fair Housing Act. According to HUD, this ensures that homebuyers are not refused the opportunity to rent or sell housing, are not given terms or conditions or are misled about the status of a property based on race, color, religion, sex, disability, familial status or national origin. For more on these rules, check out HUD’s handy guide.
Investigate the Costs
When you’re kicking off your house search, HUD recommends obtaining all the important information regarding costs as you choose a mortgage. These costs include interest rates—namely whether it’s fixed-rate or adjustable-rate, any fees or “points” paid to the lender or mortgage broker, underwriting or origination fees, minimum downpayment and private mortgage insurance (PMI) requirements. These are all critical amounts to be aware of when budgeting for your home purchase.
Even the most perfect property you find on your house-shopping journey is going to have some sort of flaw or element in need of repair. Luckily, homeowners have options when it comes to making repairs affordably once they’ve closed on a house. HUD cites the Community Home Improvement Program (CHIP) among its resource options—it offers up low-interest loans for those eligible to use toward needed home improvements like air conditioning, windows, plumbing and smoke alarms.
Avoiding Predatory Lending
If you’re new to the homebuying process it can be difficult to identify when a lender is acting predatorily. This can include a lender not disclosing fees or charges ahead of time, encouraging a person to spend more than he or she can afford or adding unnecessary “services” to your loan package in order to charge more fees. HUD encourages people concerned they may be victims of predatory lending to talk to a housing counselor about their options.
Affording a Home
For those who are in search of a reasonably sized, reasonably priced home, HUD includes among its cited resource options the use of assistance programs, such as SDHDA’s Governor’s House Program. It links eligible people with low-cost, low-maintenance, energy-efficient homes in South Dakota. If you are a low- to moderate-income household, it might be a great solution for your home search. Check out the eligbility requirements here.