10 Steps To Prepare For Homeownership

10 Steps to Prepare for Homeownership

1.Decide how much home you can afford. Generally, you can afford a home equal in value to approximately three times your gross income.

2.Develop a wish list of what you'd like your home to have. Then prioritize the features on your list.

3.Select three or four neighborhoods you'd like to live in. Consider items such as schools, recreational facilities, area expansion plans, and safety.

4.Determine if you have enough saved to cover your downpayment and closing costs. Closing costs, including taxes, title fees, and transfer fees average between 2 percent and 7 percent of the home price.

For example 3-5% down and 2-3% for loan closing costs. On 100% financing you only need to come up with closing costs unless the seller pays your closing costs. On 100% financing and seller paid closing costs, your maximum out of pocket is usually no more than $1,000 to $1,500 total. With decent credit in a buyers market, it's readily attainable.

5.Get your credit in order. Obtain a copy of your credit report. For more on evaluating and understanding your credit score, See your credit score on FreeCreditReport.com

6.Determine how large a mortgage you can qualify for. Also explore different loans options and decide what's best for you.

7.Organize all the documentation a lender will need to preapprove you for a loan.

8.Do research to determine if you qualify for any special mortgage or downpayment-assistance programs.

9.Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable.

10.Find an experienced REALTOR who can help you through the process.