5 Ways to Prepare for Home Ownership

For 95% of all Americans, buying a home will be the most important financial purchase in their lifetime. As such, you want to make sure that you are making the right decisions. To give you a better understanding of the steps involved in buying a home, below is a good checklist of the things you need to consider before buying your next home.

First, you need to create your home wish list. Ask yourself several questions: where do you want to live? What do you want in your new home? What do you need in your new home? To get a better understanding of the things you need to consider before buying a home, check out this list of questions to ask.

Second, you need to get your financial situation in order. You need to determine how much you can afford. Typically, you can afford a home that is between two and three times your gross income. You need to start saving money as well. A home is an expensive purchase and you need money to put a home. If buying a home is truly important 

Thirdly, you need to find the right real estate professionals to help you throughout your purchase. While the role of real estate professionals has changed over the years, real estate agents are still just as important in the transaction process as they were 50 years ago. To find out what to look for in a great real estate agent, read these guidelines. 

Fourth, you need to lock down your financing options. The majority of home buyers will use some sort of leverage to purchase their home. Today, interest rates are low and financing a home may provide better financial returns that purchasing a home with cash. Have your real estate professional connect you with a great mortgage banker who will present the right financial plan for you.

Finally, you need to track your home buying purchase from the moment you start looking at homes to the day you close on the home. There are countless steps you need to take to ensure you can get the keys to move into your new home. Use this checklist to keep your home purchase on track.

If you follow these steps, solicit the help of various real estate professionals, and read all of the literature possible on buying a home, you will be well on your way to moving into your new home.

Overcoming the Hurdles to Homeownership

According to a recent HSH.com survey about the biggest roadblocks to owning a home, those polled had several different answers to that important question. The readers of the poll were given 6 different options to choose from - including having no problems - and below is a list of their answers.

• Home prices: 23.5%
• Down payment: 22.9%
• Credit score: 12.8%
• Interest rates: 12.6%
• Property taxes: 7.3%
• No issues: 20.9%

To read the full report, click here.

Increasing Home Prices

The number one hurdle to overcome when buying a new home was the price of the home. The reason for this hurdle was that median home prices were on an upward trend throughout 2013. According the the National Association of Realtors (NAR), home prices were up 11.5% when compared to home prices in 2012.

To overcome the hurdle of the price of homes takes a few steps. The first is education. Work with a real estate agent who will guide you through the realities of the current housing market. You may have $200,000 to spend on a home, but it might not be in your ideal neighborhood. Or, if you are in your ideal neighborhood the finished in your new home won't be as nice.

The next step is to better identify your needs and wants. Although you may think you need a 5,000 square foot home with a 4-car garage, it will be best to tailor your housing search to better fit the realistic market expectations.

Down Payments

As the size of a down payment can be directly related to the cost of a home, it makes sense that the second most common hurdle to overcoming the obstacles to homeownership was the amount of down payment to put toward a home.

Fortunately, there are several down payment assistance programs available throughout the country for those who believe a down payment will be a difficult obstacle to overcome. These down payment programs include first-time home owner credits, the 203(k) renovation plan, grant programs, and the Realtor Care Foundation.

An interesting result to note in the HSH.com survey, the youngest group of respondents (those aged 18 to 29) said they struggled with their down payment the least. This is encouraging news for those homeowners waiting for first-time home buyers to enter the market as it seems this issue might not be slowing them down as much as originally thought.

No Problem Here
Nearly a quarter of the respondents said they ran into no hurdles whatsoever. In terms of age, older homeowners reported fewer hurdles than their younger counterparts. Twenty-nine percent of homeowners over the age of 60 led the “no hurdles” group. 

The graph above, showcasing the age brackets at which homeowners had no hurdles to overcome, is courtesy of HSH.com

To overcome any hurdle when it comes to your home buying process, make sure you are working with a qualified, diligent and skilled real estate agent who will negotiate your best interests throughout the entire home buying process.