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A Home of Your Own

March 16, 2014

Published in a special USA Today insert, "2014 Investing in Real Estate and Mortgages"

A home is where we make memories, build our futures and feel comfortable and secure. Homeownership is also one of the best ways for individuals and families to build financial security over the long-term. While the decision to own a home is a personal one, for people with good jobs and strong credit, today’s low mortgage interest rates and continued affordability make now a good time to buy a home.

Getting your feet wet

Buying a home is one of the most important decisions of your life, and it’s easy to get swept up in the emotion of it. A real estate professional can provide valuable counsel, discuss listings, show you homes in person, negotiate on your behalf and help you stay focused on the emotional and financial issues that are most important.

For example, before beginning the home search process, buyers should determine what they can afford. Today’s tight credit restrictions are preventing some qualified buyers from becoming homeowners, so buyers should carefully evaluate their income, savings and credit reports and collect documentation of income and cash available to prepare for the mortgage application process.

Give yourself some credit

There are simple ways to make yourself more creditworthy to lenders, such as not closing any credit accounts within six to 12 months before applying for a loan, keeping older accounts open even if they are unused — since they can factor into your credit score —  and aiming to keep your balance-to-credit ratio below 30 percent of the available limit.  A lender will evaluate your income, savings and credit history to qualify and approve you for a loan amount, but buyers should also calculate the cost of things like taxes, insurance and utilities into their budget.

Once preapproved for a loan, buyers should consider what they need and want in a home. Whether it’s a certain number of bedrooms, a large kitchen, or to be close to schools or public transportation, it’s good to have an idea of what you’re looking for in a home and community.

"While the decision to own a home is a personal one, for people with good jobs and strong credit, today’s low mortgage interest rates and continued affordability make now a good time to buy a home." Open houses can help buyers get a sense of what is currently available. When you visit, try to picture yourself in the home and whether it will continue to meet your needs in the future, since the typical owner stays in their home for nine years.

Finally, remember the mantra that all real estate is local, so it’s important to work with a real estate professional who is familiar with your desired community.

Buying a home can sometimes be a challenging process, but there’s a reason homeownership is called the American Dream. Investing in your future through owning a home can provide tremendous benefits throughout your lifetime.

NAR and realtor.com® collaborated to promote homeownership in the special insert, which included a full page color ad for realtor.com® and the foreword above by Brown. See it and a digital version of the realtor.com® ads online at "A Home of Your Own."