Mortgage Loans

Preparing For Home Ownership

Getting ready to make what will likely be the biggest purchase of your life can be overwhelming. Here are steps you can take to make sure you’re ready to buy a home.


Check your credit report.

You’ll want to have your credit in good shape before you apply for a mortgage. Make sure your credit report is accurate. Pay all of your bills on time. Pay off as much debt as you can, and limit the number of credit cards you have in order to maximize your credit score.


Know how much house you can afford.

As a general guide, look to keep you mortgage payment at 25 percent or less of your gross monthly income. Your total debt payments – including housing, credit card bills, car loans, child support and other debt – should not exceed 30 to 40 percent of your gross income even after you buy a home.


Save for a down payment and closing costs.

You will need between 3 and 20 percent of the purchase price of the home as a down payment. The larger your down payment, the easier it will be to qualify for a mortgage.


Calculate the additional costs of homeownership.

The joy of owning your own home comes with costs that renters don’t have to pay. Research the cost of property taxes and homeowner’s insurance. Expect maintenance costs for your roof, plumbing, heating, cooling, and appliances. Find out the utility costs of any home you are considering purchasing.


Get familiar with the market.

Drive through neighborhoods you like. Find out how much houses are selling for in that area.