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10 Steps to Home Ownership
Step 1: Are You Ready?
Knowledge and experience are the keys to
successful real estate transactions. REALTOR.com® contains an enormous amount of
valuable information, and such data -- combined with the expertise, experience
and training of local REALTORS® -- can be the essential keys to your success.
One of the keys to making the home-buying process easier and more understandable
is planning. In doing so, you'll be able to anticipate requests from lenders,
lawyers and a host of other professionals. Furthermore, planning will help you
discover valuable shortcuts in the home-buying process.
Do You Know What You Want?
Whether you are a first-time home buyer or entering the marketplace as a
repeat buyer, you need to ask why you want to buy. Are you planning to move to a
new community due to a lifestyle change or is buying an option and not a
requirement? What would you like in terms of real estate that you do not now
have? Do you have a purchasing timeframe? Whatever your answers, the more you
know about the real estate marketplace, the more likely you are to effectively
define your goals. As an interesting exercise, it can be worthwhile to look at
the questions above and to then discuss them in detail when meeting with local
REALTORS®.
Do You Have The Money?
Homes and financing are closely intertwined.
(Financing is the difference between the purchase price and the down payment,
commonly referred to as debt or the mortgage.) The good news is that over the
years new and innovative loan programs have evolved which require a 5 percent
down payment or less. In fact, a number of programs now allow purchasers to buy
real estate with nothing down. In addition to a down payment, purchasers also
need cash for closing costs (the final costs associated with closing the loan).
Several newly emerging loan programs not only allow the purchase of a home with
no money down, but also underwrite closing costs. Not everyone, however, elects
to purchase with little or no money down. Less money down means higher monthly
mortgage payments, so most home buyers choose to buy with some cash up front. As
to closing costs, in markets where buyers have leverage, it may be possible to
negotiate an offer for a home that requires the owner to pay some or all of your
settlement expenses. Speak with local REALTORS® for details.
Is Your Financial House in Order?
Those great loans with little or nothing down are not available
to everyone: You need good credit. For at least one year prior to purchasing a
home, you should assure that every credit card bill, rent check, car payment and
other debt is paid in full and on time.
So What Next?
Used by permission from the National Association of REALTORS® and Move.com
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