Preparing for Home Ownership

Ten Steps to Prepare for
Home Ownership

1. Decide how much home you can afford. Generally, you can afford a home equal in value to between 2 and 3 times your gross income.

2. Develop a wish list of what you would like your home to have. Then priortize the features on your list.

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

4. Determine if you have enough saved to cover your down payment and closing costs. Closing costs, including 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.

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 program.

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.