Here are a few ways to get ready for homeownership:
1.
Decide what you can afford.
Generally, you can afford a home equal in value to between two and
three times your gross income.
2.
Develop your home wish list.
Then, prioritize the features on your list.
3.
Select where you want to live.
Compile a list of three or four neighborhoods in which you would
like to live. Take into account things such as schools, recreational
facilities and area expansion plans.
4.
Start saving.
Make sure you have enough money saved to both qualify for a mortgage
and cover your down payment. The down payment equals 20 percent of
the purchase price. Do not forget to factor in closing costs. These
costs, which include taxes, attorney’s fees, and transfer fees,
average between 2 and 7 percent of the home price.
5.
Get your credit in order.
Obtain a copy of your credit report to make sure it is accurate. A
credit report provides a history of your credit, bad debts, and any
late payments. Make sure to correct any errors immediately.
6.
Determine your mortgage qualifications.
Find out for what amount you are qualified to take out a mortgage.
Make sure to talk to your lender and explore what loan options may
work best for you.
7.
Get pre-approved.
Organize all the documentation a lender will need to pre-approve you
for a loan. You will need W-2 forms, copies of at least one pay
stub, account numbers, and copies of two to four months of bank or
credit union statements.
8.
Investigate down payment assistance programs.
Find out if you qualify for any special mortgage or down payment
assistance programs. Check with your state and local government on
down payment assistance programs for first-time buyers. If you have
an IRA account, you can use up to $10,000 of those funds in order to
buy your first home. This is a lifetime limit, but there is no
penalty for withdrawal.
9.
Calculate the costs of homeownership.
Be sure to include property taxes, insurance, maintenance,
utilities, and association fees (if applicable).
10.
Contact a REALTORŪ.
Find an experienced REALTORŪ who can help guide you through the home
buying process.
