Before you start looking for a home you should ask yourself a few questions:

• Where do you want to live? Do you want to be close to schools, shopping, work, or something else?

• What kind of house would you like (need)? Are you looking for a particular style? How many bedrooms and bathrooms do you want? Do you want a yard?

• How much house can you afford? Have you consulted a Realtor or mortgage lender to determine the size of the mortgage you would qualify for?

Here are a few tips to help you get organized:

• Pull a credit report on yourself and make sure the information is accurate. If you find any errors take steps to correct them immediately.

• Browse through real estate advertisements in the newspaper and Homes magazines. This will give you a good feel for the types of homes that are on the market and what they cost.

• In many communities, Realtors may have television programs or interactive phone systems which will allow you to find out information.

• Visit open houses on the weekend. It doesn't cost anything to look, and looking at a few different homes might give you some ideas for things you'd like in a house but haven't considered.

• Start saving money - you'll need to have cash on hand for a down payment and closing costs.

• Don't incur any additional debt. Pay down your credit cards - and don't apply for any new ones. Don't make any major purchases on credit - buy the furniture or car later.

• Contact a Realtor. Your Realtor can help you determine how much you can afford, and they can provide you with information on homes that may interest you. The Realtor will also help you complete all of the necessary forms when it comes time to make an offer.

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How much house can you afford?

• Simply put, you can afford a house that costs as much as the largest monthly mortgage payment you qualify for.

• A quick way to estimate the size of mortgage you qualify for is to take your gross monthly income (that's before taxes and other deductions) and multiply it by .28. This works out to just over 1/4 of your gross income.

• Mortgage companies use something called qualifying ratios to determine how much they'll lend you. Most mortgage companies use either a 28/36 ratio or a 25/33 ratio. The first number in each pair is the percentage of your gross income that the lender would consider acceptable as a monthly mortgage payment (i.e. if you make $3,000 per month, 28% of that is $840 per month).

• The second number in each pair is used when all debt payments are considered, not just the mortgage. (i.e. if you make $3,000 per month, but also have a $250 a month car payment, 36% of $3,000 is $1,080, minus the $250 car payment equals $830).

• As you can see, in this example the numbers work out to be almost the same. Obviously if you have more debt you would qualify for less.

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Why you should work with a Realtor

Working with a professional Realtor to buy your home is a good idea for several reasons:

• They'll analyze your financial situation to help you determine how much you can afford.

• They're familiar with the process of buying a home and can explain things to you.

• They can easily access information on all properties listed for sale by Realtors in your area.

• They can set up appointments for you to see homes that interest you.

• They'll help you complete all the necessary paperwork when it comes time to make an offer.

• They'll help you arrange financing.

• They'll be there at closing to answer your questions and make sure everything runs smooth.

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Choosing a Realtor

Searching for your dream home can be a time consuming experience. Working with a professional Realtor will make the process much more efficient.

Since most people spend a fair amount of time with their Realtor, it's important to choose a Realtor you feel comfortable with, and one who is responsive to your needs. The following questions will help you decide if a particular Realtor is right for you:

• Do they return your phone calls?

• Do they ask you questions to determine what you want/need in a house?

• Do they perform a financial analysis to help you determine how much you can afford?

• Do they explain things clearly?

• Do they suggest financing methods?

• Do they seem knowledgeable about the community?

• Do you feel comfortable spending time with them?

If the answer to most of these questions is "Yes" - you've found yourself a great Realtor.

If you find yourself answering "no" to many of these questions, or to any individual questions that are important to you, you should keep looking until you find a Realtor you feel comfortable with.

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