How to Buy a House (With Actual Steps) Part 1 Financing

Most people would like to own a home at some point in their life, either to live in or for investment purposes, but ask the questions; where do I start? and how much house can I afford?  

The answer in most cases is FINANCING, you can't buy a home if you don't have a way to pay for it.  If you have been thinking about purchasing a home you most likely have been looking on the internet at properties that you would like to see yourself owning, and you also have most likely thought of a price in your mind that you think you could reasonably afford per month.

At this point you should speak with a lender, typically most people's first stop will be their bank, and while the bank may provide you with a loan it is also a good idea to shop around.  Institutions that specialize in lending and do not provide banking services such as checking and savings accounts can sometimes offer lower fees and better rates.

Once you have spoken with a lender the next step will be actually giving the lender official information such as your income, credit score etc. so that they can either pre-approve or pre-qualify you for a loan.  Pre-approval or pre-qualification is an essential for home buying in this day and age unless you are purchasing a property with cash.  Most sellers will not even look at an offer if a pre-approval or pre-qualification letter is not submitted with the offer, as they are concerned that the buyer may not qualify for a loan to purchase their property.

With pre-approval from your lender you will be able to establish a price range of homes that you can afford.  Unfortunately, this number may not match the number that you had rolling around in your head before you spoke with a lender, but it is the number that will actually get you a home.

Once you have gotten your pre-approval from your lender the next step in the home buying process for most people will be to contact a Realtor which we will cover in more detail in Part 2 of How to Buy a House (With Actual Steps).