How to buy a house

by Elizabeth Rosen, Contributor

If you are considering buying a house, there are many steps you can take to prepare your finances and ensure that homeownership is the right move for you.

The first step towards buying a house is determining whether or not it really makes sense for you to buy or rent. If you can’t commit to staying in one place for 5 to 7 years, then owning is probably not for you (at least not yet). Additionally, if your financial situation shows any signs of instability, you may have difficulty getting a home loan.

If and when you do decide to buy a house, consider what you’re looking for in a home. It’s recommended that you create a “House Wish List” with the amenities you will need and the things you can live without. Research home prices in the neighborhood(s) you’re interested in and stay informed about current mortgage rates. The more you know, the more money you can save and the easier it will be for you to make smart decisions.

In order to buy a house, you will also need to get a mortgage loan. In order to get the best mortgage, you will need a good credit score, steady/stable employment, and money for a down payment (20% is generally ideal). It is never a good idea to spend all your money on buying a house ― you will be much better off if you have extra savings and know how to manage your finances. Also note that the actual cost of buying a house is much more than the amount you agree to pay for it. You have to consider all the expenses associated with the homebuying and home owning process (including mortgage insurance, homeowners insurance, closing costs, escrow accounts, property taxes, repairs, and maintenance).

Whether or not you hire a real estate professional to help you buy a house is up to you. Licensed agents have more access to property listings and can help find a home that fits your needs and your budget. However, they will likely charge a hefty commission fee. Otherwise, you can search for property listings (online, newspapers, etc.) yourself and keep an eye out for open houses.

Remember that your house is both a home and an investment, and owning a home is a long-term commitment with many advantages and disadvantages. Being aware of these factors will help you determine if buying a house is the right choice for you.