Home | Resources | Advertisement







10 Rules to Peaceful Homeownership   

If you have finally decided that it is time to buy a home, you may wonder if there is a guide to help you get through the process.  Here are 10 steps to successful home ownership that will help you along the way. 

Step 1.  The first thing you need to do is make sure that you are really ready to purchase a house.  You need to have a steady and stable income with a job history of two or more years.  You also need to have enough money already in the bank for the down payment and your debt to income ratio can't be too high.  If your bills take less than 30 percent of your income, then you are on track. 

Step 2.  You should shop around to find a realtor who can work well with you and will help you find what you are looking for.  The commission for most realtors is negotiable, so find a realtor with a commission you can handle.  Make sure you are able to communicate well with him or her and find out if they are readily available to help you through the process and answer any questions you may have. 

Step 3.  Go to your current banking institution and get pre-approved for a home loan.  You want to be ready in case the seller requires you to qualify for a loan before he stops showing the house to other people and accepts your offer.  Once you find the house you want, you will have to go through the formal loan process. 

Step 4.  Once you are pre-approved for a loan and know about how much you can spend, it is time to start looking for that house.  You will work with your realtor to find homes in your range and they can even help you find contact people who are selling their homes on their own without a realtor.  Your realtor can tap other realtor's listings to give you the full market in the area you wish to purchase a home. 

Step 5.  Now that you have a good feel for the houses that are out there, it is time to make that choice.  Be sure to choose one that you can easily qualify for and afford the payments on.  If you purchase out of your range, you may end up defaulting later with a bad credit mortgage.  Sometimes your realtor can help negotiate and bring the price down, but if that won't work, you should keep looking for a less expensive house. 

Step 6.   As soon as you have chosen a house, you can work with your loan officer to start the official loan application.  Because you already prequalified, you may only need a few more items to complete the application. 

Step 7.  Once the loan application is in the works, you need to make an official offer on the house.  Your realtor will write up the contract for you and present it to the home seller. 

Step 8.  Once you have a loan going and have an offer on a house, you will need to shop for insurance that covers the replacement value of the house. 

Step 9.  Once the seller has accepted your offer and the loan is processed, you will go to a title company to close the deal.  Both sales of new homes and mortgage refinance closings usually take place at a title company where the agent will help you understand what you are signing and answer your questions as you go. 

Step 10.  It is a good idea to start out with a payment you can afford so that you don't eventually end up in a foreclosure situation.  You may be able to use mortgage refinancing down the road if the interest rates go down, but you can't count on that happening because interest rates may just as well go up.  Keep making your payments on time to avoid these kinds of problems.