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A Moment To Reflect...and 10 Steps to Prepare for Homeownership
A Moment to Reflect and...
10 Ways to Prepare for Homeownership
It’s been about a week since I last blogged. Being kind of new at this gig, my hats are truly off to every one of you who out there (both consumers and realtors) who have finagled, jumbled and balanced both your family and business lives to be able to also find the time to speak to the public in this medium (blogging). My son is teething big time, and I have been blessedly reminded of the nights of very little sleep. I now understand when parents say, “I wouldn’t trade it for the world.” I also know that many Realtors are and have been going through quite a challenging time over the last couple of years (and if they haven’t been, kudos to them – they are definitely in the minority). I say that because the housing boom in the first half of this decade brought more people into this profession than ever before...and there was enough business to go around. So when business presents itself, it can be more challenging to fit these blogs into our schedule. Feast or famine, right guys and gals? Ah, the life of a Realtor. Nevertheless, because I maintain that it is still a great time to buy (and possibly with another rate cut or two to come!), I bring you some more sage advice, courtesy of the National Association of Realtors, for those of you out there considering on owning one of the thousands of available homes...
10 Ways to Prepare for Homeownership
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.
3. 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, 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 20 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 fee, and transfer fees — average between 2 and 7 percent of the home price.
5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. 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.
7. Get preapproved. Organize all the documentation a lender will need to preapprove 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.
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.
9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.
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