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10 Steps to Prepare for Homeownership
- 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.
- Develop
a wish list of what you’d like your home to have. Then prioritize the
features on your list.
- Select three or four neighborhoods you’d
like to live in. Consider items such as schools, recreational
facilities, area expansion plans, and safety.
- Determine if you
have enough saved to cover your downpayment and closing costs. Closing
costs, including taxes, attorney’s fee, and transfer fees average
between 2 percent and 7 percent of the home price.
- Get your
credit in order. Obtain a copy of your credit report.
- Determine
how large a mortgage you can qualify for. Also explore different loans
options and decide what’s best for you.
- Organize all the
documentation a lender will need to preapprove you for a loan.
- Do
research to determine if you qualify for any special mortgage or
downpayment-assistance programs.
- Calculate the costs of
homeownership, including property taxes, insurance, maintenance, and
association fees, if applicable.
- Find an experienced REALTOR®
who can help you through the process.
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