Home ownership is a dream come true for many people.  It is often where most people socialize, raise families, spend their downtime, and often is the single largest financial investment they make in their lifetime.  It is a lot of responsiblity, but it is also a satisfying and usually profitable venture.  The steps to buying a home are pretty simple if you follow these rules.  

Determine if home ownership is right for you.

Not everyone wants or needs to be a home owner.  There are lots of factors to consider?  Are you a young professional who may move due to their job?  Do you have an expanding family?  Are you trying to downsize?  Do you have the financial stability and history to buy a home?  

Find the house that fits you.

There are many factors here as well.  What neighborhood do you want to be in? How far are you willing to commute?  What schools, hospitals, or entertainment do you want to be near?  Do you want a yard?  Can you afford the neighborhood you desire?  We recommend you make a list of what you specifically want.  Share that list with a Realtor, or go online for some research.  Once you know what you are looking for, you can start the search.  

You have probably heard, "Location, location, location."  That is certainly true in real estate.  

Get your finances in order.

Once you know what you are looking for, you need to determine what you can afford.  There are simple steps to start here as well.  Free mortgage calculators are available all over the internet.  Do a quick check based on your income and ability to make a down payment.  Almost all mortgage providers will have recommendations on how much you can (or should) spend on your home.  

Check your credit.  If you have a blip or two, don't stress.  Get it repaired before applying for a loan.  

Save some money.  You will likely need to make a down payment, but there are additional expenses as well.  Closing costs, moving expenses, furniture to fill your new home... 

Determine what you can afford.

A lot of lenders require a 20% downpayment.  That may be a limiting factor alone, but don't forget about the monthly expenses.  Taxes, insurance, utilities, and maintenance should all be considered as well.  

Some lenders do not require 20%.  Check out: 

The Federal Housing Administration (FHA): They offer a 3.5% down payment option through many lenders. FHA loans are generally easier to qualify for and have lower interest rates. 

Fannie Mae and Freddie Mac will insure up to 97% loan-to-value mortgages. 

Veterans Administration (VA): Eligible veterans, active duty members, and their families can qualify for VA loans. VA loans can be very attractive and often require no downpayment.  If you qualify, you should explore this option.  Thank you for your service!

Shop for your mortgage.

You usually try on more than one pair of jeans before buying, right?  And this is a much more important decision.  Shop your mortgage!  Your Realtor will likely be able to make some introductions.  Do an online search.  Speak with your bank.  You may have a mortage for the next 10-30 years.  A little time spent now may save you a lot of money in the future.  Some services even consolidate your application which allows multiple mortgage providers to provide quotes.  

Be prepared for them to ask a lot of questions.  This is an important decision for the mortgage provider as well, and they will certainly research your answers.  Make sure to provide them truthful answers.  

Be prepared for options.  Do you want to put more or less down?  How many years do you want to have a mortgage?  Do you want to escrow (include taxes and insurance) in your monthly payments?  

Get a pre-qualification.

You can get pre-approval aka pre-qualification letters from your mortgage provider.  In today's hot, hot, hot market, you will want to be prepared to act quickly once you find the right home.  Getting pre-qualified makes the process go smoother, quicker, and more stress free.  Most sellers will expect a qualified offer to come with a pre-qualification letter.  Have a a pre-qualification letter could be the difference in your offer sealing the deal.  

Seal the deal.

Your Realtor can make a big difference here.  They have been through the process many times previously.  Or if they are brand new, their brokerage firm will have the experience.  Lean on your Realtor to help get the appropriate inspections, appraisal, repairs, and paperwork completed.  Here is where a Realtor can really earn their commission.  

Happy house hunting!

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