By Laura Feghali
Jan 18, 2013
Q: How do I begin the process of buying a house?
A: First, decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
Then, develop your home wish list. Select where you want to live. Compile a list of two or three neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area amenities, proximity to public transportation, and safety.
Continue putting money into savings.
Ideally, you should have 20 percent of the purchase price available as a down payment to avoid PMI and higher lending fees. Also, factor in closing costs.
Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. Determine your mortgage qualifications.
Also, explore different loan option and decide what’s best for you by contacting a few lenders to discuss. Organize all the documentation a lender will need to pre-approve you for a loan.
Weigh other sources of help with a down payment.
Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal. Calculate the costs of homeownership.
Lastly, find an experienced Realtor who can help guide and counsel you throughout the process.
— Laura Feghali, Prudential CT Realty, 203-536-4802, laurafeghali@prudentialct.com
