Top Tips to Prepare for Homeownership

Ready to buy a home?  Here are the top tips to determine if you are ready.

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 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 fees 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.

6.  Determine your mortgage qualifications.  How large of a mortgage do you qualify for?  Also, explore different loan options---such as 30 year or 15 year fixed mortgages or ARM's.

7.  Get pre-approved.  Organize all the documentation a lender will need to pre-approve you for a loan.  You might need W-2 forms, copies of at least one pay stub, account numbers and copies of 2-4 months of bank 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 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, utilities and association fees, if applicable.

10.  Contact a Realtor.  FRITZ would be glad to talk with you and answer all you real estate questions.