10 Steps to Prepare for Homeownership

• 1. 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.
  
   

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2005. All rights reserved.         www.REALTOR.org/realtormag