• Decide that buying vs. renting is best for your situation.
• Determine how much of a mortgage you can afford.
• If possible, get "pre-qualified" for a loan. (This means a lender or a real estate broker does a preliminary review of your finances and credit to determine if you can qualify for a mortgage loan and, if so, how much.)
• Given your price range, decide what kind of home you want/need : size, location, special features, commuting distance, etc.
• Begin looking for your new home, Allow time (up to several months) to see a number of houses so that you have a good basis for making a final decision. Contact a real estate agent to help you with your search.
• When you find a home that you like, carefully give it your own personal inspection. If your comfortable with the home, make an "Offer to Purchase", including a partial down payment, Make sure the "Offer to Purchase" allows you to get your money back if a professional inspection reveals problems with the property or you are unable for any reason to obtain financing.
• Formally apply for a mortgage loan.
• Get all professional inspections done for the home. The lender will require a professional appraisal of the property prior to giving mortgage commitment.
• Prepare an estimate of closing costs, monthly payment, cash required and close the loan. This is otherwise known as "Settlement". That's when you complete your down payment, pay loan fees, sign all necessary legal documents and get the keys to your new home.

*The order of these steps may vary for individual home-buying situations.

"SHOULD I BUY?"

• Do I expect to move to another town in the near future?
• Do I want to stay in the town or city that I'm currently living in? For how long?
• How do I expect my income to change in the future? Will it increase, decrease or remain the same?
• Can I handle the financial responsibility of a mortgage?
• Are there other large purchases that are important to me? For instance, would I rather own a boat or a more expensive car?
• Do I prefer a different way of investing my money?
• What do I like about renting a home?
• What do I dislike about renting a home?
• Why is owning a home important to me?
• Would I be better off if I allowed more time to save money? Could I be in a better position to buy six months from now? A year?
• Do I have plans to make a change in my family living arrangements?
• How much room do I really need/want?

RENTING VS. OWNING - DISADVANTAGES/ADVANTAGES

DISADVANTAGES

Buying a house ties up your cash. The home may increase in value over time, but don't count on recovering your cash quickly.

Rent increases are unpredictable, and usually beyond your control.

If you run into financial trouble, selling the house may not be a solution. During the first few years of ownership, you're likely to lose more money than you gain by selling your home.

Owning a home usually makes moving more difficult and complicated. After you have bought a home, you may not have as much flexibility in choosing a new location or job.

You will need to spend money on maintenance and repairs for as long as you own the home.

There is no guarantee that your home will increase in value, particularly during the first few years.

ADVANTAGES

A home is generally a sound investment. When you carefully choose a home you can afford, the potential payoff is great. Each month when you pay your mortgage, you're building equity in a place of your own. Equity is the portion of the property that you actually own through your payments, versus the portion that you still owe the mortgage lender. The longer you stay in your house, the more equity you will have. And unlike most things you buy, a home can actually increase in value as time passed, building more equity. (But remember; there are no guarantees that your home's value will appreciate; sometimes home values go down.)

Home ownership offers great tax advantages. The mortgage interest and real estate taxes are tax deductible. That allows you to subtract part of your housing-related expenses from your income, which could reduce your tax liability significantly.

A first home often leads to a better second home. As you build equity in your current home, it is usually easier to afford another home in the future.

You are better able to plan your housing costs.

You gain the satisfaction and security of ownership. You can decorate and improve your home according to your own needs and desires. Owning a home may give you a new sense of pride in your surrounding and encourage you and your family to plant deeper roots in your community.