| Buying your own home is one of the largest | | | | |
| purchases you will ever make. What should you | | | | When choosing between homes, look at the |
| do to get ready? | | | | size, number of bedrooms and baths, design |
| | | | and amenities. Decide what your "must haves" |
| The key to a successful home purchase is | | | | are and what the "nice to haves" are. For |
| making your choice through your finances, not | | | | example, you might be willing to trade a |
| your emotions. This takes research and | | | | large kitchen for a swimming pool. |
| patience. Here are five steps that can help | | | | |
| you make a good decision. | | | | 3. Negotiate for the right price. |
| | | | |
| 1. Decide how much you can afford. | | | | Once you have the funding in place and have |
| | | | found a nice home, make an offer. Your |
| You should look at your finances in order to | | | | realtor will help you in submitting your |
| determine how much you can afford to spend on | | | | purchase contract. This will include the |
| a home. Look at your income, assets and | | | | offer price and any contingencies, such as |
| current debt level. You aren't looking at | | | | home inspection and appraisal. |
| what percentage the lender says you can | | | | |
| afford, you are looking at what your finances | | | | The seller will either accept your offer, |
| dictate. If your lender says you can spend | | | | reject it or make a counter-offer. |
| $1,200 a month, but you know you are | | | | Negotiations can go back and forth until both |
| struggling with a rental of $1,000 a month, | | | | parties are satisfied. Don't get caught up in |
| you probably know that you don't need any | | | | having to get the home and loose sight of how |
| more than you already have. | | | | much you can afford. You don't want to pay |
| | | | more for the home than it is worth. |
| You should also consider the down payment and | | | | |
| closing costs. Lenders are usually looking | | | | 4. Pick out of mortgage. |
| for a 5% to 20% down payment. | | | | |
| | | | There are many types of mortgages to choose |
| Don't overlook other expenses, such as | | | | from. The basic two are fixed rate and |
| property taxes and homeowners insurance. Your | | | | adjustable rate. Fixed-rate mortgages have |
| total interest, principal, taxes and | | | | interest and monthly payments that remain the |
| insurance payment should not exceed 28 | | | | same throughout the life of the mortgage, |
| percent of your gross monthly income | | | | which is usually 30 years or less. |
| according to lenders. Your total monthly | | | | |
| debt, including your mortgage, autos, student | | | | Adjustable-rate mortgages are also called |
| loans and credit cards should be under 36% of | | | | ARMs. They come with a lower initial rate |
| your gross income. | | | | than fixed rate mortgages, but the rate and |
| | | | payment amount can move up and down with the |
| You don't have to have a house in mind before | | | | financial index. This can happen as often as |
| you apply for a mortgage. It is a good idea | | | | twice a year. |
| to be pre-approved when you are looking for a | | | | |
| home It will give you the security of knowing | | | | 5. Close on your home. |
| that you have funding and the buyer will know | | | | |
| you mean business. | | | | The closing, or settlement, is the point at |
| | | | which you finalize the transaction. You walk |
| 2. Look for what you want. | | | | in with a check and out with your keys and |
| | | | the property's title. You can expect to pay |
| Spend the time to find the home you want. | | | | between 2% and 5% of the purchase price |
| Find a professional realtor that can help | | | | towards closing costs. These costs include |
| guide you through the home search. Start by | | | | fees, services and points paid. |
| checking out neighborhoods and then narrow it | | | | |
| down to a house. You should consider the | | | | After closing, you can settle in to your home |
| schools, parks, commuting times and | | | | and enjoy all of your hard work. Five simple |
| availability of public transportation. | | | | steps and the house you dreamed of is yours. |