Preparing to Own a Home

As a first time homebuyer, you're about to make one of the biggest financial decisions of your life. For most people, a home represents the most expensive purchase they'll ever make. One of the best things you can do is read, research and learn about the mortgage application process. The more you prepare, the more confident you'll feel about purchasing the home you want. Remember: We're always here to help make things easier.

Mortgage Pre-Approval

Being pre-approved by a lender gives you the confidence to shop for a new house, knowing exactly how much you can afford. You can avoid looking at properties that don't fit your budget. The pre-approval helps you know exactly what is possible right from the start. In fact, most realtors expect you to be pre-approved.

Get Pre-Approved

How much can you afford?

A good place to start is to look at your current expenses. You probably have both "fixed" expenses… i.e. car payments, taxes, or day care … and "discretionary" expenses… i.e. things like travel, clothing, entertainment, or other areas where you can decide how much to spend.

Then, make up a budget. You'll see how much of your monthly income is already committed to "fixed" expenses, as well as how much you have to spend on a mortgage payment, taxes, and insurance for a home.

Of course, how much you can afford also depends on how much debt you have. Long-term debt - i.e. debt that will take more than 10 months to pay off - is what lenders are most concerned about. If you have long-term debt that is considered "excessive" for your income, it will probably limit how much you can borrow. If you have a lot of long-term debt, you may want to pay off some of it before you apply for a mortgage.