Your Home:  What You Should Know When Buying Your Home 

If you are interested in buying a home, you are about to make one of the biggest investments of your life. Where Should You Start? (Are you Renting Your Home?)

Understanding the Buying Process Understanding Your Legal Rights How to Get a Mortgage How to Get a Home Equity Loan or Reverse Mortgage 7 Steps to Preventing Foreclosure Solve Problems with Utilities

Understanding the Buying Process  

9-step HUD Guide to Buying a Home - This Department of Housing and Urban Development site walks you step-by-step through the process of purchasing a home.  Topics include deciding if you need a real estate agent, making an offer and obtaining homeowners insurance. 

Home Buyers Center - This commercial site provides information such as helpful buying tips, checklists and To-Do lists for buying a home, as well as, links to other sources of information. 

Should You Rent or Buy - Homefair.com, a commercial site, provides an online calculator to determine whether it is more affordable for you to rent or buy your home.  This is a useful tool for gaining a quick understanding of the cost differences between renting and buying.  There are easy to follow instructions provided below the calculator.

Understanding Your Legal Rights

Did You Know that....?

1. Low income neighborhoods are sometimes targeted for unfair selling practices. Learn how to protect yourself against "flipping".
2. Maryland law requires all homebuilders operating in Maryland, except those building exclusively in Montgomery County, to be registered with the Home Builder Registration Unit of the Consumer Protection Division in the Office of the Attorney General.
3. Maryland law requires your homebuilder to put your deposit in an escrow account. There is an exception if the builder has a corporate surety bond or irrevocable letter of credit on file with the state.
4. Your contract should at a minimum include the construction plans, the agreed upon price, time of completion, and provisions that are to be sued if a problem occurred.
5. Maryland law has additional requirements for custom home contracts, which are created when the buyer pays a builder to build a house on land the buyer already owns.
6. Under Maryland law, it is your builders responsibility under the contract to build the house according to the specifications and applicable building codes.

Your Rights & Remedies Under Maryland Law
The Office of the Attorney General Consumer Protection Division provides a free guide to Buying A New Home, which provides information on choosing a builder, drafting a contract and protecting your deposit and construction of your home.  You can print a copy online or pick one up at your local consumer protection office.

Note: The Guide to Buying a New Home is in a special format called PDF. If you would like to read the guide, you must have a program called Adobe Acrobat Reader.  If you do not already have the program, you can get a free copy.

How to Get a Mortgage  

Move.com - This commercial organization provides detailed information to a variety of questions you may have on getting a mortgage for your home.

1. What Is a Mortgage?

2. What Are Your Options?

3. How You Get a Mortgage?

4. What Is the Current Mortgage Rate?

5. How Do You Calculate Your Mortgage Payment?

6. Frequently Asked Questions About Mortgages

Mortgage Information Center - This commercial site provides a useful Mortgage Information Center including topics such as qualifying for a mortgage, choosing your mortgage, and a list of helpful tips when shopping for a mortgage company.

Your Rights to Fair Lending - The Federal Reserve Board provides this brochures to help explain how to deal with mortgage lenders and gives a behind the scenes tour on where to look, what to look for, and what takes place when you apply for a mortgage.

How to Get a Home Equity Loans 
Home equity loans are used by homeowners to convert part of the value of their home into a cash loan. Home equity money can be a valuable financial tool, but be careful to not go too deeply into debt. Typically the loans are used to consolidate your bills, make home improvements, pay for your childrens education, or buy big-ticket items such as a car.

There are two types of home equity loans.  One is a revolving loan account and the other is a single, closed end loan transaction. 

• Revolving Loan Account - With a revolving loan account you receive a maximum line of credit. You can then draw the money as often (or as infrequently) as you want, until you reach the limit spelled out in your agreement.
  Example:  You may want to establish a line of credit to pay your childs tuition costs.  The lender determines that you have at least $40,000 of equity in your home and is willing to give you a home equity loan for 75% of that amount.  After you sign the necessary papers your line of credit is $30,000.  You may tap into this line of credit as much as you want. You will make payments and add new debt as often as every month.  The monthly payments may go up and down, depending on how much you owe.  Like credit card, your total debt, at any point in time, is limited to the maximum line of credit you were given.

• Single, Closed-end Loan Transaction - In single, closed-end loan transaction, you receive the amount in one lump sum. You then repay the loan amount in monthly installments.
  Example: You borrow $20,000 at 12% simple interest APR (annual percentage rate) for seven years.  Your monthly payments would be $353.05 for the length of the loans 84 payments. 

Move.com  - This commercial organization provides detailed answers to a variety of questions you may have on using the equity you have in your home to get a home equity loan.

1. What Are My Choices of Home Equity Loans?

2. Finding a Home Equity Loan

3. How To Use a Home Equity Loan This is a commercial site and is presented as a convenience for the information it contains.  The Peoples Law Library is not associated with any commercial web sites and is not endorsing or recommending it by presenting this link. This link also opens a "pop up" window on the other web site that you will have to close.

What You Should Know When Selling Your Home
If you are interested in selling your house, you are about to take on probably the second most stressful activity, behind buying a house. The links below will help you with the basics about selling your house.

Online Sellers Guide - Forsalebyowner.com, a commercial site, provides a 8-step interactive question and answer guide that walks you step by step through the process of selling your home.  Topics include how to set the price, closing the deal and moving.

Home Sellers Information Center - This commercial site provides information on preparing your home to sell and choosing whether or not to use an agent to how to set the price for your house and how to best show your house when it is on the market. 

Maryland Department of Assessment and Taxation - This government site enables you to learn the assessed value of your home. The assessed value is one of the elements in deciding the market value.  You can also get general property information on topics such as tax credits and property for sale in Maryland.

Zillow.com - This commercial site provides a tool that can help you estimate the value of you home based on the following criteria:

1. Historical home sale information

2. Property characteristics

3. Transactional information

Iplace.com compiles historical sales information from local county courthouses, gathers property characteristics from state tax assessor offices and generates transactional information about your property.

Inexpensive Custom House Valuation - This for-profit company will create a report that values your home for a small fee.  At their site, you can view a sample report and get more information about their services.

Register for a Valuation - This commercial website provides valuation services but you must become a registered member. You can become a registered member for no charge, but we recommend reading the Terms of Use Agreement very carefully. If you register with this group a local real estate agent will likely contact you. You do not have to accept the proposals made by these agents, but this may become annoying for you.

• Judicial foreclosures: The creditor first must file a suit in a court located near your property. Your home will be sold under court supervision unless you file an answer successfully contesting the foreclosure and judgment is entered for the creditor.

• Non-judicial foreclosures: The creditor can foreclose simply by advertising your home for sale by using a legal notice in a newspaper.  If you want to contest this type of foreclosure, you must file a lawsuit and ask the court to stop the sale.  Unless you initiate a court proceeding, there is no judicial involvement in this type of foreclosure.

1. Consult an Attorney Immediately. Finding Legal Help  

2. Do Everything You Can to Pay Your Mortgage Payments. Consult a nonprofit credit counseling agency to help you manage your bills.

3. Apply for Tax Abatement or Public Assistance Programs.

4. Negotiate a Temporary Delay in Payments.

5. Negotiate a Permanent Loan restructuring.

6. Refinance Your Home Debt.

7. Last Resort: Consider Filing Bankruptcy.

Resources for veterans: Servicemembers Civil Relief Act of 2003-The Act provides relief for termination of leases,  a six percent cap on interest rates, and reopening of Default Judgments.  This protection extends to car leases, car loans, and repossessions.  The Federal Housing Authority (FHA) provides answers to frequently asked questions about the Servicemembers Civil Relief Act.

State utility commissions regulate consumer service and rates for gas, electricity and a variety of other services within Maryland. These services include rates for telephone calls and moving household goods. The federal government regulates rates for utilities and services provided between states. Many utility commissions handle consumer complaints.  Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations. 

The first step you should take is to contact your utility company and work with them to solve your problem.  MarylandÕs major utility providers are listed below:

If you are unable to work your problem out with your utility company file a complaint online with Marylands Public Service Commission or by contacting them at: 

If you are still having trouble with your natural gas, electricity, telephone, water and sewer or transportation, contact the Office of the People's Council (OPC).  The OPC is an independent state agency that represents residential consumers in utility matters. 

National Consumer Law Center
This national organization provided online brochures that contain tips on how to deal with utility companies regarding disputed bills and utility deposits as well as tips on what to do when your utility service has been disconnected.

 Last Legal Updated: 9/9/08 (PLL/M.A.J.)