First Time Home Buyer Search
1. Check the selling prices of comparable homes in your area
. Do a quick search of actual multiple listing service, or MLS, listings in your area on a number of websites, including the National Association of Realtors.
2. Use Midtown Mortgage calculator
to get an idea of what your monthly mortgage payments would be if you bought today.
3. Find out what your total monthly housing cost would be, including taxes and home insurance.
In some areas, what you'll pay for your taxes and insurance escrow can almost double your mortgage payment.
RATE SEARCH: Find the best rate on a mortgage today.
To get an idea of what insurance will cost you, pick a property in the area where you want to live and make a call to an insurance agent for an estimate.
4. Find out how much you'll likely pay in closing costs.
The upfront cost of settling on your home shouldn't be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items like homeowners insurance or homeowners' association fees. Check out Midtown Mortgage annual closing cost survey to see what closing costs average in your state.
5. Look at your budget and determine how a house fits into it.
Fannie Mae recommends that buyers spend no more than 28 percent of their income on housing. Push past 30 percent and you risk becoming house-poor.
6. Talk to reputable Realtors in your area about the real estate climate.
Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon?
7. Look at the big picture.
While buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there's no landlord to turn to, and these costs can quickly drain your bank account.
Prepare for the hunt
If the numbers make sense for you, making these additional moves at the very beginning of the purchase process can save you time, money and aggravation.
8. Examine your credit.
Bad credit or the inability to make a substantial down payment can put the End on your home ownership plans. That's why it pays to look at your creditworthiness early in the home buying process.
9. Get your docs in a row
. Collect pay stubs, bank account statements, W-2s, tax returns for the past two years, statements from current loans and credit lines, and names and addresses of your landlords for the past two years. Have all of that paperwork ready for the lender. Don't be surprised if your lender wants a lot of documentation.
10. Find lenders and get approved.
Getting approved for a mortgage helps you bargain from a position of strength when you are shopping for your home. .
11. If at first you don't succeed, try, try
.. The Federal Housing Administration has a program that insures the mortgages of many first-time home buyers. As a bonus, the FHA requires a down payment of only 3.5 percent from first-time home buyers.