First, make sure your credit record is good enough for lenders to consider giving you a loan. Get a copy of your credit report in advance. (You can do this online for free at www.ConsumerInfo.com and other Web sites). If your credit history is not so great, you may be able to get an FHA loan.  If your credit is really poor, you probably won't be able to buy a home until you improve your credit scores and credit.  Tips on improving your credit score.

Figuring out what you want.  Make two lists:  those things that you want and those things that you need.  There is a difference between the two. Decide what you must have and those things that would be nice to have.  Below are a couple of examples: 

• Two bedrooms, two baths - must have

• Safe, quiet neighborhood - must have

• Garden  - would like to have

• Near close friends or family members - must have

• Craftsman-style one-story - would like to have

• Affordable property taxes - must have

• Single story - would like to have

What can you Afford?  You will need to find out how much you can afford to pay monthly for your house payment.  Talk to two or three different lenders. The best way to learn what you can afford is to get pre-approved for a loan. Ask friends and family for referrals of good loan people and your Realtor can help refer someone to you as well. You will need a pre-approval letter when you are ready to start looking.  But for now you it will help you to know how much house you can afford and how much you qualify for. Sometimes people are approved to borrow more than they are comfortable with.  So keep in mind where the payments will be for the amount you are approved for. Your house payment will include the principle (the actual loan), the interest on the loan, and most of the time it will also include the property taxes that are due each year (divided by 12 months) and your homeowner's insurance. 

The most important  step - Get your financing taken care of.  It is crucial that you work with a lender and get "all  your ducks lined up" before you start seriously looking at homes.  Sellers won't even consider an offer without a pre-approval letter from the buyer's lender.  This is not the same as a pre-qualification. You will also have to show what is called "proof of funds" or proof that you have the cash necessary for closing the transaction (for closing costs and your down payment).

Starting the house hunt. Now that you have an idea of what you can afford, you can decide what type of home you would like - a condo or townhouse or a detached single family home. If you haven't found one yet, now is the time to find a good Realtor.  Your Realtor will help you to know what to look for and avoid, provide reliable references for other experts you'll need along the line and will represent you in negotiations and throughout the entire transaction.  

Now you're ready for the fun stuff: the house hunting. 

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