BUYING A HOME: GETTING STARTED

There are several important considerations and steps that you should take before setting out on the adventure of buying a new home.  We’ll outline some of the most important in this article.

How much home can I afford?
Your lender is the first person to talk with to help you determine how much home you can afford.  Lenders will have guidelines to determine whether prospective home buyers will be able to pay their monthly mortgage payments comfortably, and they will be happy to share those with you. Though flexible, the guidelines generally state that a household should spend no more than 28 percent of its income on housing expenses and no more than 36 percent of its income on total debt obligations (including the monthly mortgage payment).  Remember that if you are purchasing your home with someone else who will be signing the mortgage with you—a spouse, significant other, parent, or other partner—their income may also be considered in determining the total household income.

Don’t forget to include in your figures the amount you’ll need for real estate taxes and insurance as well.

A helpful calculator for determining how much home you can afford can be found at: http://www.bankrate.com/brm/calc/newhouse/calculator.asp .

How do I find the right real estate agent?
Finding the right real estate agent is one of the most essential steps in getting started with buying a home.  Real estate contracts and details are complicated, and with a large portion of your assets on the line,  most homebuyers need professional assistance.

Unfortunately, all real estate agents aren’t created equal.  There is a wide variation in the amount of education, knowledge of the area in which you wish to buy, experience and access to real estate listings.  Here are a few tips on finding the right agent:

• Start by asking your friends for the names of realtors with whom they have had a good experience.
• Interview at least three agents who are recommended.  You need to find out if their schedules, personalities and abilities are compatible with yours.  Ask for references and check them.
• Ask what the agent will do to help you find the right home.  Make sure your expectations will be met.

How do I find the right lender?
Save money by doing your homework. Talk to several lenders, compare costs and interest rates, negotiate to get a better deal. Consider getting pre-approved, not just pre-qualified, for a loan.  It will make things a lot easier for both you and the seller.  Remember to consider closing costs as well as interest rates when selecting your lender.  These costs can vary widely.

What do I want/need in my new home?
Understand these are two different things.  If you have a growing family, you may need three bedrooms.  You may want a multi-media room for your family to enjoy, but you should recognize you may not be able to afford it.  Sit down and make a list with your family of the things you need and then the things you want.  Go over that list with your realtor who will help you find the best home for you that meets those needs/wants.

How can I use the Internet to find a home online?
With today’s technology, you can have instant access to a lot of virtual assistance in finding your new home.  There are literally thousands of websites devoted to helping you search listings in your designated area.  Start by Googling the name of the city or area in which you want to locate along with the words “real estate.”  Then sit back and peruse listings and, in some cases, even take virtual tours of the homes you find for sale.

Using these tips, you’re ready to get started in buying your new dream home.  Next are tips for actually buying your home!