Home buying: Steps to getting started

Your mortgage lender will look at numbers to determine what you can afford. Your total debt, including car payments and other loans, shouldn’t exceed 36 percent of income.

Lenders contact your employer and bank to verify your income, check your credit history and determine that you can be approved for a mortgage of a certain amount. While you’re not obligated to take this mortgage, it shows the sellers that you are a serious buyer.

Most first-time buyers work with a realtor who knows the listings in the neighborhoods where they are interested in living. You may not get everything you want at the price you are comfortable with, so be prepared to compromise. Prioritize what’s important to you — location, school district, numbers of bedrooms or baths, etc.

If you can’t afford everything you want in a single family home, consider a condo or townhouse. Look at enough properties that you understand what’s available in the price range in which you are approved.

When you’ve found the right home, make an offer. If it’s far below the asking price, be prepared for a counter-offer and some negotiation. Don’t be pressured into offering more than you can handle — if the price of the home is out of your range, you must be willing to walk away.

If you can agree with the seller on a price, you will sign a contract and be asked to put down “earnest money” to hold the deal. Make sure your contract specifies that your money will be returned if you withdraw the offer.

Make it a contingency that there is an inspection by a certified home inspector as a condition of the sale. This inspection will identify any structural, electronic or plumbing issues within the home, and can save you big repair expenses that may not immediately be obvious.

Your contract sets the closing date, which is negotiable. You’ll need time to secure your mortgage and finances, and the seller needs time to pack and move. It’s also time to check that the home has a clear title.

If everything checks out, you’ll sign the papers and hand over a big check, submitting your mortgage paperwork along with application and closing fees. You’ll be signing a lot of paperwork — at the closing you’ll go over all of it and will be presented with the keys to your new home. It’s time to start enjoying the tax benefits — and the pride — of home ownership!

How to start your house hunt
How to determine your housing budget
How to pick a great neighborhood