Homeownership Starters

Buying a home is one of the most significant decisions to make during your lifetime. Can I afford to buy a home and where do I begin?

Make a list of current total household income and expenses to get an idea of debt to income ratio. Consider the additional expenses with owning a home such as, school & property taxes, heating & utility bills, homeowners insurance and a cushion for unexpected needed repairs. Obtain a copy of a current credit report to verify accuracy and review your payment history since this may affect the loan rate offered for a mortgage.

Check with several different financial institutions for types of mortgages and rates offered. Then apply to be pre-qualified or pre-approved to establish your financial capability to purchase a home. The primary distinction between pre-qualification and pre-approval is that the information that is collected for a pre-approval is verified by the lender whereas a pre-qualification it is not. Therefore, a pre-approval is a much stronger tool when making an offer on a home.

Deciding on what type of mortgage is best for you depends on the available finances you have to cover a down payment. Get estimates of closing costs and homeowners insurance, pro-ration of any taxes, your own home inspection and cost of any needed repairs to the property.

Copyright© 2008 FSBO Publishing Group, Inc., All rights reserved. This material may not be republished without written permission.