How to become a home owner?

You need a detailed, two part answer to this one. The first part is general strategy, the second part is specifics on exactly how to do it. This is the single largest financial decision that most people make, and is worth doing right.

Generally:

1) Read about personal finance. Yahoo has an excellent section devoted entirely to this. I read it daily.

**2) Have an overall financial plan. Buying a house MUST fit into a broader picture of planning for your ultimate retirement. I assume you are young and buying your first home. This is the MOST IMPORTANT bit out of all this long answer.

3) Get your credit score as high as possible. The higher you can get your credit score, the cheaper the ultimate loan you will be getting is. You should do research to find out how a credit score is calculated and how to improve it, but I will provide a basic starting point below.

Specifics:

1) Find a budget for your income. Take it from an accountant: buying a house has a lot of hidden costs like taxes, insurance, and maintenance. Once you have figured out how much you CAN pay, then you can calculate how big a house you can afford. Have an accountant or a professional financial advisor help you with this if you aren’t 1% sure.

2) Once you have a budget, you should figure on AT LEAST a 10% down payment on the house, better to go for 20%+ if at all possible. It is getting hard to find lenders that will loan for less than a 20% down payment anyways.

3) SAVE. Again a financial advisor would be helpful. Keep most of the investment in conservative vehicles, like bonds or CDs, with a small portion (10% or so) in risky things like stocks.

4) Now comes yet another hurdle, finding a house. This is not my specialty, so I will simply say again, to do some research on WHICH house to buy, or if building one from the ground up is for you. This is another bit that probably requires some professional advice. Perhaps you should ask another question on this specific bit.

5) Once you have found the house you want, you will need to bargain with the owner, and secure financing from a bank. Many real estate agents will help with this part.

Remember that part of the closing costs of the loan will probably be included in the loan amount. e.g. You buy a 1,0 house with 20,0 down payment. Your actual loan will be something like 85,0, as the extra $5,0 goes to pay for the loan fees, title transfers, and real estate agents.

Lastly:

Larger forces of the overall economy will affect you. It will be harder to get loans in the near term because of recent developments in the mortgage industry. This also makes houses for sale a lot cheaper as there is a HUGE glut of homes on the market at the moment.

Take a deep breath and don’t be in a hurry for this. As I said above, the housing market is likely to be soft for quite some time. Waiting and saving will allow you to buy when the market is soft AND have a smaller debt to pay for it because you have saved more money.

Regards,

RG

Source(s): yahoo information on general loans:
http://finance. /loans

Excellent article on getting a mortgage:
http://finance. /expert/article/mortgage/2…

Rough calculator for your house budget.
http://finance. /calculator/family-home/ho…

How credit scores are calculated:
http://www.bankrate.com/brm/news/credit-scoring/20…

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