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    Must dos for the First-Time Home Buyer

    Are you paying rent or living with your parents but want to live in a home you can call your own? If you are thinking about becoming a first-time homebuyer, here are a few steps to take to help you decide whether you are ready to face home ownership.

    Open the Door to Homeownership

    1. Check the selling prices of comparable homes in your area –
    2. Use Bank Rate’s mortgage calculator – to get an idea of what your monthly mortgage payments would be if you bought today.
    3. Find out what your total monthly housing cost would be –including taxes and homeowner’s insurance. In some areas, what you’ll pay for your taxes and insurance escrow can almost double your mortgage payment.

    To get an idea of what you will pay for insurance, pick a property in the area where you desire to live and make a call to an insurance agent for an estimate. You won’t be obligated to get the insurance, but you will have a good idea of what you will pay when you do buy. For an idea of what you might pay in taxes, check your property appraiser’s website. Just remember that exemptions and local tax laws can create differences between what a homeowner is currently paying and what you can expect to pay as a new homeowner.

    1. Find out how much you will likely pay in closing costs.The upfront cost of settling on your home should not be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items like homeowner’s insurance or homeowner’s association fees. You can see what closing costs average in your state by looking at
    2. Talk to reputable Realtors in your area about the real estate climate.Do they believe prices will continue falling or do they think the area has hit bottom or will rise soon?
    3. Look at your budget and determine how a house fits into it.Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house-poor.


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