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10 Ways to Prepare for Homeownership

1. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment, however, there are mortgage programs available downpayments as low as 3.5%. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price. Hopefully you can ask the seller of your dream home to pay your closing costs, but it is important to be prepared with the funds ready.

2. . Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.

3. Develop your home wish list. Then, prioritize the features on your list. What is most important to you? Do you need 3 or 4 bedrooms now? Or will you in the future? Its also important to think of the resale value of your home. What is the neighborhood like – mostly families? Or city dwellers with no children. Being familiar with this is important in prioritizing your needs.

4. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income, however, step 5 will be important in helping you guage what the sale price you should be looking in.

5. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.

6. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.

7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.

8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? 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.

9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable. This is something your mortgage loan officer can help you with.

10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.

Search for your Dream Home, Visit WWW.MyVADreamHome.com

Sonja Adams
Samson Properties, LLC
14526 Lee Road, Suite 100
Chantilly, VA 20151
703-963-7407