The Steps in Buying a Home

Once you have decided it is time to take the plunge and purchase a home, there are some important steps you need to take.

It would be wonderful if we could say that the steps are 1. Shop for a home. 2. Obtain a mortgage. 3. Move in.

But, as with so many decisions in life, one step is contingent upon another. Before you can obtain the mortgage, you need to know how much you need. Before you know how much you need, you need to know how much the house you want to buy costs. Before you know which house you want, you need to know how much you can afford to spend.

So, even though looking for the dream house would seem to be the first step, it may not be practical until you know how much you can afford to pay for the home. Therefore, for many home buyers, the first step is to consult a mortgage lender who can help you find this out.

A mortgage lender will do an analysis of the funds you have for a down payment, your income and your projected expenses, in order to calculate what your monthly payments will be and therefore how much home you can afford.

There are two advantages to taking this step before shopping for a home. First of all, you will know that you are shopping in the price range that you can afford, and secondly, you may be able to get a mortgage commitment, which is a very powerful bargaining tool when you are house shopping. A fully qualified buyer, with money "in hand" as it were, is in a much better position to make an offer than one who still has to shop for a mortgage.

With a mortgage commitment in hand, and the knowledge of the amount you can spend in mind, you can then start looking for the right home. The main criteria for most people is the location (near job, family, etc.), the school system (both if you have children and also to protect the property value) and what you can afford. You may have to consider a smaller home in a preferred area to stay within your budget. Or, you may opt for the larger home with a further commute.

The style of home, such as ranch vs. two story is usually the next consideration, and then special features such as a large yard, beautiful landscaping or a pool. Each family has its own ideas about what is or is not important in a home.

Now is finally the time to contact a real estate agent and start shopping, because you now have all of the necessary information to make the right decision about a home.

1. How much you can spend.
2. The location you prefer.
3. The style you prefer.
4. The amenities that are important.

Happy home shopping!

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