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11 Steps to Prepare for Home Ownership

1. Decide how much home you can afford. Generally, you can afford a home equal in value to between 2 and 3 times your gross income.

2. Develop a wish list of what you’d like your home to have. Then prioritize the features on your list.

3. Select three or four neighborhoods you’d like to live in. Consider items such as schools, recreational facilities, area expansion plans, and safety.

4. Get your credit in order. Obtain a copy of your credit report.

5. Determine if you have enough downpayment to qualify for a mortgage. Ideally, you should have 20 percent of the purchase price as a downpayment, but there may be some loan options available with less.

6. Consider other sources of help with a downpayment. For example, if you have an IRA account, you can use money you’ve saved for buying your first home without paying a penalty for early withdrawal. Also check with your state and local government on downpayment assistance programs for first-time buyers or any other special mortgage or downpayment assistance programs.

7. Determine if you have to cover your closing costs. Closing costs, including taxes, escrow fees, and transfer fees average between 2 and 7 percent of the home price. In some cases a seller may be able to help you cover some or all of the closing costs.

8. Organize all the documentation a lender will need to preapprove you for a loan.

9. Work with a lender to determine how large a mortgage you can qualify for. Also explore different loans options and decide what’s best for you.

10. Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable.

11. Find an experienced REALTOR® who can help you through the process.

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For more information contact our team of REALTORS® at CENTURY 21 Village Realty at 626.355.1451 or via email at homes@c21village.com