1. First you will need to determine what you can afford. The general rule of thumb is you should be able to afford a home that is equal in value anywhere from 2-3x your gross yearly income.
2. Next, determine what you want in a home, your buyer wish list. Prioritize the list and note which are must haves and want-to-haves.
3. Location, location, location. Do your research and select several neighborhoods that meet your criteria (safety, good schools, proximity to work, etc.).
4. Make sure your credit is order. You should obtain a copy of your credit report to ensure that there are no errors on your report. If there are, you should correct them before applying for a mortgage.
5. Speak with a mortgage broker to determine how much money you will need for a down payment. Ideally, you should have enough to put 20% down. Keep in mind, there are additional fees at closing. The average costs run from 2-7 percent of the purchase price.
8. Get your documentation in order. In order for a lender to pre-approve you for a loan, you will need to provide proper documentation (i.e., W-2s, pay stub(s), account statements, etc.)
7. Get pre-approved before you begin searching for a home. Waiting to get pre-approved can mean missing your chance to purchase the home you fall in love with. In today’s market, many homes receive offers from pre-qualified applicants as soon as the home hits the market.
8. Ask your REALTOR® and/or mortgage broker if you qualify for any special mortgage or down payment assistance programs. Also, if you have an IRA, you can use that money to buy your fist home without paying an early withdrawal penalty.
9. Calculate the costs of home ownership, including property taxes, insurance, maintenance, utilities and homeowner association fees, if applicable.
10. Contact an experienced REALTOR® who can help guide you through the process.
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