Richfield Home Buyers: 10 Important Steps on Your Way to Owning a Home... by Twin Cities Homes for Sale

Real Estate Agent with Coldwell Banker Burnet Realty MN Broker# 20588319


Richfield Home Buyers: 10 Important Steps on Your Way to Owning a Home... by Twin Cities Homes for Sale


1.      Determine what you can afford. Generally, you can afford a home equal in value to between two and three times your gross annual income. Make sure your total monthly payment comfortably fits into your budget.


2.      Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment?  Ideally, you should have 10-20 percent of the purchase price saved as a down payment. However, you can buy a home with as little as 3.5% down. Remember to factor in closing costs. Closing costs — including taxes, homeowners insurance, title fees, and transfer fees — average between 2 and 5 percent of the home price. Most lenders will allow up to 3% of purchase price paid by the seller.


3.     Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. Any incorrect information may negatively impact your credit score, so it is important to have it removed.  A credit report provides a history of your credit, bad debts, and any late payments.  

4.     Develop your home wish list. Then, prioritize the features on your list.  It’s helpful to have two major categories there: Must-Haves and Nice-To-Have.


5.     Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.


6.     Get preapproved. Organize all the documentation a lender will need to start a preapproval process for your 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, and two most recent income tax returns.


7.     Weigh 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 fist home without paying a penalty for early withdrawal (consult a tax professional to confirm).   If you are applying for an FHA insured loan and need help with down payment and/or closing costs, lenders typically allow gift funds from a relative.  Check with your for current rules and requirements.


8.     Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, distance to work, recreational facilities, area expansion plans, and safety.  Find out prices of homes in these neighborhoods and check how they fit into your budget.


9.     Calculate the costs of owning a home. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.  Be prepared for unexpected expenses like appliance or car repairs.

10.  Contact a Realtor.  Find an experienced Realtor who can help guide you through the process.   It’s important to work with someone who is familiar with neighborhoods you want to live in, and who is familiar with any down payment assistance programs available in the area.  Ask your family and friends for a referral to someone they trust.



Contact Marzena M. Melby, GRI, CDPE, Keller Williams Integrity Realty. Licensed REALTOR® in the state of Minnesota

 Visit my website to search homes for sale in the Twin Cities and surrounding areas.

Disclaimer: The information provided herein is supplied by several sources and is subject to change without notice. Twin Cities Homes 4 Sale Blog does not guarantee, or is any way responsible for its accuracy, and provides said information without warranties of any kind, either express or implied. Entries on Twin Cities Homes 4 Sale Blog represent the opinions and ideas of the author. Twin Cities Homes 4 Sale Blog does not express the views of Keller Williams Realty, or its other partners or agents.


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Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

Thank goodness I bought a home long ago.  But, I can say from experience, that owning is better than renting.  In most cases, you have control over quite a few things...noise, for example. 

But, those unexpected expenses can take a toll.  So be cautious in your intial outlay and contact a great Marzena!  (BTW, I was not paid to say this!)  Check out her blog posts and see for yourself!

Apr 07, 2011 02:51 PM #1
Marzena Melby
Coldwell Banker Burnet Realty - Richfield, MN
Realtor, Twin Cities Minnesota Real Estate

Hey Ron,

Thank you so much for this endorsement, it's much appreciated.  :)

Apr 07, 2011 02:57 PM #2
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

Great advice no matter where you live.  But, I do get to sell homes in the Twin Cities once in a while and would love to work with you.

Apr 10, 2011 10:53 AM #3
Marzena Melby
Coldwell Banker Burnet Realty - Richfield, MN
Realtor, Twin Cities Minnesota Real Estate

Thank you, Don.  I look forward to having a transaction with you, as well.  Let's make it soon  :)citron

Apr 11, 2011 09:52 AM #4
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Marzena Melby

Realtor, Twin Cities Minnesota Real Estate
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