Preparing for Homeownership - Step One

Determine If You Are Ready To Be A Homeowner

Before you begin to look for a home, you first must know why you want to become a homeowner. Are you ready for homeownership? Is the purchase of a home something you want, or are outside influences like parents, family, friends, tax benefits, or market pressures pushing you toward homeownership? Would you like to own your home, or are you satisfied with renting? If you would prefer to purchase a home, are you able to take on the responsibilities of homeownership? Can you truly afford a house and be comfortable? Can you afford to make minor home repairs? Can you afford to pay for major repairs, such as plumbing, and electrical problems, should the need arise? These represent just a few of the questions you should ask yourself before you prepare to purchase a home. Following are additional items to explore before taking the next step towards homeownership:

VALUES
Prior to looking for a house, it is important to determine what specific features you value in a home. When thinking about buying a home, think about the aspects of a home that are most important to your family as a whole. Do not assume that everyone in the household will share similar values and goals. Ask each person who will live in the house to list what is important to him or her and then compare the answers given by each.

GOALS
Buying a home is probably the most expensive purchase you will make in your lifetime, and is also one of the most important decisions you will ever make. Therefore, it is imperative that you approach the decision carefully, keeping in mind your family’s overall goals.

DESIRES
Most people would like to be able to get everything they desire when choosing a home. Realistically, however, homebuyers are probably not going to get everything they desire. Often, we tend to make purchases based on emotion rather than forethought and logic. Therefore, you should understand the difference between what is desirable and what is acceptable. It is important to prioritize your desires so that you can better choose a suitable home. For instance, if you desire a three-bedroom, two-bath home with a large kitchen and a breakfast nook, you may want to give priority to the number of bedrooms and bathrooms, but be willing to compromise on the size of the kitchen, or whether it has a breakfast nook. By setting such priorities, you can decide when to compromise on a house that meets most, but not all, of your desires.

LOGIC|
While purchasing a home can be an emotional experience, it is important to use logic to make this decision. The simple fact is that you can only borrow a certain amount of money, depending on you income and your other debt. If you have little cash to contribute toward your house, then you are further limited in what you can afford. A REALTOR®, housing counselor, or mortgage loan officer will prequalify you to determine the maximum amount you can borrow towards the purchase of a home. Keep in mind that, in many cases, the borrower won’t really be comfortable taking on the maximum amount of debt for which he or she has been qualified. It is your responsibility to determine the maximum amount of mortgage debt that is right for you. You must communicate this information to your REALTOR and mortgage lender, and be sure to work only with professionals who respect your limits and goals. Once you determine a realistic mortgage amount, you will know the price range of homes you can afford. Keep in mind that you may eventually want to purchase furniture or appliances for your new home. That could become difficult if you spend the majority of your monthly income on housing.