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A 1-year plan to buying your first home

It's never too soon to start planning ahead if you hope to buy your first home within the next year.

It's never too soon to start planning ahead if you hope to buy your first home within the next year.

That's the key message that real estate and mortgage brokers say prospective first-time homebuyers should take away from any preliminary thoughts or discussions about buying.

Variables like loan qualifying guidelines, interest rates and house prices aren't within your control and might change before you're ready to move forward. But it's still smart to start educating yourself about factors you can control – such as your down payment, credit score and housing needs and wants – as early as possible, said Julie Miller, branch manager at Broadview Mortgage in Tustin, Calif.

"It's important to have a plan in place to ensure you're on the right track for qualifying for a mortgage," Miller said.

To come up with your one-year plan, you'll need to talk to a lender or mortgage broker who will help you figure out what type of home loan will meet your needs and how much you can borrow to buy a home based on your personal financial situation.

"You'll get to find out: Are you qualified for a $300,000 house or $400,000 house? And, based on your current credit, how much would that price require you to put down and what would your payment look like?" Miller said. "You'll have a much better idea of the guidelines for the different types of loans and what will be required to get the loan you'd really like."

The mortgage pro can also help you review your credit history so you can dispute any errors and make other changes that will better position you to purchase a home.

By setting your target price range early, you'll spend less time finding the specific house you want, said Tim Deihl, an associate broker at Gibson Sotheby's International Realty in Boston.

Starting early can also help you figure out whether you want to live in a denser, more walkable community or a spread-out place where you'll have to drive to shops and other amenities. Think about whether you want to live in a certain school district or near a particular public transit line.

"You can never fine-tune your search too early," Deihl said. "Having a good idea of the type of neighborhood you're looking for and the qualities within that neighborhood that are preferences versus must-haves is really important."

Once you've settled on an area, talk to one or more real estate agents. Select the agent you want and rule out agents who won't be patient with you, Deihl said.

"If you're working with an agent who's going to push you into making a decision when you're not ready, you're probably not working with the right agent," he said. "Be happy you sat down with them a year ahead of time rather than three months ahead of time because you can cross them off your list."

Connecting early with an agent who's familiar with the area you've targeted can also help you find out about homes that aren't yet listed or are pocket or so-called off-market listings, said Ken Pozek, a Realtor with Keller Williams Realty in Northville, Mich.

During the planning stage, take advantage of open houses, which are public invitations for prospective buyers to walk through for-sale homes and meet the agents who represent those properties' sellers.

"Open houses are more popular than ever," Pozek said, "and the agent is there to educate you."

If you'd rather shop online, you can research neighborhoods, homes and agents on real estate websites that contain a wealth of information and data. A caveat is in order, however.

"Early in the stages of looking for a home, online is a great place to start. You get a good general sense," Pozek said. "Unfortunately, there is also a lot of bad information on real estate websites. There is possibly a lot of false hope there. Realize that not everything you see online is 100 percent accurate."

Some homebuyers take an analytical approach to house-shopping, putting together lists of neighborhood and home characteristics they need and want. Other buyers are more emotional about their decision.

Either way, preparation is crucial because, as Pozek added, "it's a seller's market, so you don't have a lot of time to lollygag and try to make a decision" when you do decide to buy.



Marcie Geffner writes about housing and mortgages at Visit Bankrate online at



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