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.
3. Select where you want to live.
4. Start Saving. Ideally, you should have 20% of the purchase price saved as a down payment. Additionally, you will need to factor in closing cost which average between 2 and 7 percent of the home price. Closing costs include: taxes, attorney's fees, and transfer fees.
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.
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? First time buyers programs, IRA accounts are also a means to help with the down payment.
9. Calculate the costs of homeownership. This will include property taxes, insurance, maintenance and utilities.
10. Contact a REALTOR. We at DBP Realty can help guide you through this process with experience you want.