ShareThis10 Ways to Prepare for Homeownership
Most first time home buyers don’t know what to do or how to prepare to buy their first home. Here is a list of 10 ways to get started.
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 neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4. Start saving.– Do you have enough money saved to qualify for a mortgage and cover your down payment? Also, don’t forget to factor in closing costs. Closing costs- including taxes, title fees, and transfer fees- average between 5 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 and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications.– How large of mortgage do you qualify for? Also, explore different loan options and decide what’s best for you.
7. Get preapproved.– Organize all the documentation a lender will need to preapprove you for a loan. You might 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. Weigh other sources of help with a down payment.– Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government or nonprofit housing counseling agencies on down payment assistance programs for first time buyers.
9. Calculate the costs of homeownership.– This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR- Find an experience REALTOR like me who can help guide you through the process.
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