From Ameriprise Financial, Inc. | November 2011

As you begin looking for a home to buy, knowing what to expect may help you move more easily through the process. First, you'll have to figure out how large a mortgage you can afford. Then, the lender you choose can help you prequalify or get preapproved for a loan. You may want to work with a real estate agent or buyer's broker, who can guide you--for a fee--through the home-buying process. Decide what features you'd like in a home, and when you fi​nd one that suits you, make an offer. Finally, after ironing out other details and signing the necessary paperwork at the closing, the house will be yours!

There's no doubt about it--owning a home is an exciting prospect. After all, you've always dreamed of having a place that you could truly call your own. But buying a home can be stressful, especially when you're buying one for the first time. Fortunately, knowing what to expect can make it a lot easier.

How much can you afford?

According to a general rule of thumb, you can afford a house that costs two and a half times your annual salary. But determining how much you can afford to spend on a house is not quite so simple. Since most people finance their home purchases, buying a house usually means getting a mortgage. So, the amount you can afford to spend on a house is often tied to figuring out how large a mortgage you can afford. To figure this out, you'll need to take into account your gross monthly income, housing expenses, and any long-term debt. Try using one of the many real estate and personal finance websites to help you with the calculations.  MORE

 

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