7 steps to become a homeowner

Ready to take the plunge and finally purchase your dream house? Here are seven key steps to become a homeowner.

1. Set a budget
Start by figuring out how much you can realistically afford to pay for a new home. Remember that mortgage payments aren’t the only expenses you’ll have to consider; you’ll also need to pay for utilities, property taxes, home insurance and repairs.

2. Save for the down payment
When you buy a house, you have to put down a large amount of money to secure your purchase. The larger the down payment, the smaller your mortgage loan will be. Keep in mind that if your down payment is less than 20 percent of the total purchase cost, you’ll also have to pay for mortgage default insurance each month. As you’re saving, pay attention to your credit score, which is a determining factor in how good of a mortgage you’ll get.

3. Find the mortgage that’s right for you
Mortgages depend on the amount you’re able to pay upfront (the down payment) and the length of time you’ll have to pay the loan back. Before you start house hunting, you should get pre-approved for a mortgage by your bank or mortgage broker. During the pre-approval process, the lender determines the amount you qualify for. Sellers will be more receptive to your offer if you’re pre-approved.

4. Choose a real estate agent
Your real estate agent is your guide through the home buying process. Take the time to interview at least three different agents who have a thorough knowledge of the housing market in your area before choosing one who’s a good fit in terms of your needs and personality.

5. Start house hunting
As you tour different homes, make sure to keep a list of all the features you’re looking for during
the visits and take notes so you can keep track of your impressions. You should also make a list of questions to ask your agent about each property.

6. Make an offer
When you find the home of your dreams, you’ll need to prepare a written offer in consultation with your agent specifying how much you’re willing to pay. It’s recommended that your offer include certain contingencies like the right to have the home appraised and inspected before completing the transaction.

7. Finalize the deal
Once you’ve settled on a price, you’ll be able to start making closing arrangements, such as finalizing the payment and mortgage terms. On closing day, the final documents will be signed and you’ll receive the deed and the keys to your new home.