1. Decide how much home you can afford. Generally, you can afford a home equal in value to between two and three times your gross yearly income.
2. Develop a wish list of what you’d like your home to have. Then prioritize the features on your list into needs vs. wants.
3. Decide the area you want to live in. Consider items such as schools, commuting, recreational facilities, area expansion plans, and safety.
4. Determine if you have enough saved to cover your down payment and closing costs. Closing costs, including taxes, insurance, and transfer fees average between 2 percent and 7 percent of the home price.
5. Get your credit in order. Obtain a copy of your credit report. The truly free site is www.annualcreditreport.com this is the one to use, not those ones you see on TV.
6. Determine how large a mortgage you can qualify for. Also explore different loans options and decide what’s best for you. Remember you must be comfortable with your payments. Just because you qualify doesn't mean you can afford it!
7. Organize all the documentation a lender will need to pre-approve you for a loan. Tax returns, W2s, bank statements, and pay stubs are the primary sources your lender will ask for.
8. Do research to determine if you qualify for any special mortgage or down payment assistance programs, ie. VA, FHA, or My Community Mortgages.
9. Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable.
10. Find an experienced REALTOR like me who can help you through the process. Watch for next week's post for information on how to choose a REALTOR.
As a REALTOR I specialize in educating and informing buyers and sellers to make the best decisions they can when it comes to real estate.
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