by Kathryn Dunkle, Client Coordinator

10 Ways to Prepare for Home Ownership

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: most haves, would very much like to have, wonderful to have but can live without, etc..
3. Select where you want to live. Compile a list of three or four areas 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? Ideally, you should have 10 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs (including taxes, attorney’s fees, and transfer fees) average between two and four percent of the loan to value. There are loans available for less down payment provided by the the government. We can tell you about these programs.
5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate, and correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments. Credit scores drive the loan programs that will be available to you. Call us and we can help you get your credit scores and loan program options in order.
6. Determine your mortgage qualifications. How large of a mortgage do you qualify for? Also, explore different loan options such as 30-year or 15-year fixed mortgages or adjustable rate mortgages (ARMs) and decide what is best for you. Our experienced lenders can provide you with the options available to you.
7. Get pre-approved. Organize all of the documentation a lender will need to pre-approve 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. We can make the pre-approval process painless for you.
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 on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your first home without paying a penalty for early withdrawal. Gift money from family members is another good way to help with a home purchase and can provide the giver with a tax deduction!
9. Calculate the costs of home ownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable. Before you buy, you need to understand all of your expenses. We will help you with all of this information.
10. Building a new home. Start earlier with your planning. There are more decisions to be made including all the features of your home prior to the start of construction. We can help you make all the right steps. Call and ask for our Guide to New Home Construction.

Contact an Exclusive Buyer Agent REALTOR at Buyers Advantage Group Realty who can help prepare you for home ownership. We can get started making all the right steps towards a successful home purchase while helping you save money. Call for a no obligation presentation of our services and the home buying process. Remember, having a buyers-only agent does not cost you extra.

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