Buying a home for the first time can be overwhelming, but as with anything else in life, the right preparation brings about good results. Remember, the right home for you is one you want and can afford.
Step 1: Ask yourself if you're ready.
- You need to decide whether you're financially ready to buy a home
- Do you have a steady job and income?
- Do you plan on remaining in the same area for a few years?
- Do you have enough money set aside for your down payment and closing costs?
- Do you have an emergency fund?
- Do you live within your means, avoiding credit card debt?
You will have to get used to budgeting a little differently in terms of having a reserve when things go wrong. Whether it's a new home or an old one, things will go wrong. Experienced homeowners know this, but first-time buyers often don't."
Step 2: Find out what you can afford.
When you're sure you have the right mind set to be a homeowner, it's time to determine how much house you can afford. The best way to do that is to get pre-qualified for a loan. There are for pre-qualifying: go to a lender with whom you have already established rapport or find a real estate agent you trust and follow the agent's recommendations for a lender
When you're sure you have the right mind set to be a homeowner, it's time to determine how much house you can afford. The best way to do that is to get pre-qualified for a loan. There are for pre-qualifying: go to a lender with whom you have already established rapport or find a real estate agent you trust and follow the agent's recommendations for a lender
Your total monthly mortgage payment -- principal, interest, taxes and insurance (or PITI) -- should not exceed 32 percent of your monthly gross income. The U.S. Department of Housing and Urban Development (HUD) suggests that figure should be 29 percent. So this is not an exact science. According to Bank of America's Consumer Real Estate Group, you should find a lender that offers "first-time buyer options and financing ideas that take into consideration your personal situation. For example, many first-time buyer mortgage programs require only a low down payment or even no money down. If a down payment is required, you may be allowed to use 'gift' money from family members and other sources. Some first-time home buyer programs feature no closing costs. There may also be down-payment assistance programs available in your community.".
Step 3: Find out what's available
Once you know how much you are qualified to spend, it's time to decide where you want to live and research what types of housing are available -- one-story single family, condos, town homes, etc. In searching for an agent, find one who makes you feel comfortable and, more importantly, one who listens to you.
Once you know how much you are qualified to spend, it's time to decide where you want to live and research what types of housing are available -- one-story single family, condos, town homes, etc. In searching for an agent, find one who makes you feel comfortable and, more importantly, one who listens to you.
Step 4: Choose a neighborhood.
Once you know the housing stock in your price range, you can look at specific neighborhoods with homes meeting your needs. Cruise by at night time to see whether you get a "vibe" that it's a safe neighborhood. If you have children, you'll want to check out the quality of the schools. You ideally would like to be convenient to shopping, work and schools.
Once you know the housing stock in your price range, you can look at specific neighborhoods with homes meeting your needs. Cruise by at night time to see whether you get a "vibe" that it's a safe neighborhood. If you have children, you'll want to check out the quality of the schools. You ideally would like to be convenient to shopping, work and schools.
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