Steps to Prepare for Home Ownership
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 at least 10 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, attorney’s fee, 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.
Did you know the average price for a San Diego home last month sold for $550,000? In order to be able to afford an average house, you need to have a combined annual income of $138,000.
In today’s economy it almost seems impossible to save, but it can happen. Start saving. And when the time comes, I will be there!
