10 Steps to Prepare for Homeownership
- Decide
how much home you can afford. Generally, you can afford a home equal in value
to between two and three times your gross income.
- Develop a wish list of what you'd like your home to
have. Then prioritize the features on your list.
- Select
three or four neighborhoods you'd like to live in. Consider items such as
schools, recreational facilities, area expansion plans, and safety.
- Determine
if you have enough saved to cover your downpayment and closing costs. Closing
costs, including taxes, attorney's fee, and transfer fees average between 2
percent and 7 percent of the home price.
- Get
your credit in order. Obtain a copy of your credit report.
- Determine
how large a mortgage you can qualify for. Also explore different loans options
and decide what's best for you.
- Organize
all the documentation a lender will need to preapprove you for a loan.
- Do
research to determine if you qualify for any special mortgage or
downpayment-assistance programs.
- Calculate
the costs of homeownership, including property taxes, insurance, maintenance,
and association fees, if applicable.
- Find an
experienced REALTOR who can help you through the process.
