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 saved 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 fee, 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. A credit report provides a history
of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications. How large of mortgage do you
qualify for? Also, explore different loan options — such as 30-year or 15-year
fixed mortgages or ARMs — and decide what’s best for you.
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
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 you’ve
saved to buy your fist home without paying a penalty for early withdrawal.
9. Calculate the costs of homeownership. This should include property taxes,
insurance, maintenance and utilities, and association fees, if applicable.
10. Contact one of our agents. A Blue Fence Real Estate Agent can help guide
you through the process.
Reprinted from REALTOR® magazine with permission of the NATIONAL ASSOCIATION OF REALTORS®.
Copyright 2008. All rights reserved.