Steps to Prepare for Homeownership

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. Determine if you have enough down payment to qualify for a mortgage. Ideally, you should have 20 percent of the purchase price as a down payment
   
3. Consider other sources of help with a down payment. 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 down payment assistance programs for first-time buyers.
   
4. Get your credit in order. Obtain a copy of your credit report.
   
5. Determine how large a mortgage you can qualify for. Also explore different loans options and decide what's best for you.
   
6. Organize all the documentation a lender will need to pre-approve you for a loan.
   
7. Determine if you have to cover your closing costs. Closing costs, including taxes, and transfer fees average between 2 and 7 percent of the home price.
   
8. Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable.
   
9. Find an experienced REALTOR^® who can help you through the process.

 Information provided by National Association of REALTORS^®