10 Steps to Prepare for Home Ownership


  1. Find an experienced REALTOR® who can help you through the process.
  2. Decide how much home you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
  3. Develop a wish list of what you would like your home to have. Then, prioritize the features on your list. Select three to four neighborhoods in which you would like to live.
  4. Consider items such as schools, recreational facilities, area expansion plans and safety.
  5. Determine if you have savings sufficient to cover your down payment and closing costs. Closing costs, including taxes, attorney's fees and transfer fees average between two and seven percent of the home price.
  6. Get your credit in order. Obtain a copy of your credit report.
  7. Determine how large a mortgage for which you qualify. Also, explore different loan options and decide what is best for you.
  8. Organize all the documentation a lender will need to pre-approve you for a loan. This includes past income tax returns, recent pay stubs, etc.
  9. Do research to determine if you qualify for any special mortgage or down payment assistance programs.
  10. Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable.

Copyright NATIONAL ASSOCIATION OF REALTORS®, reprinted with permission.