As a first-time home buyer, you’re probably looking at this turmoil in the real estate market, the dropping values and think to yourself, “I could buy a home now.” You’re probably right. Here’s another reason why you should be considering this thought very seriously in this market – there is a lot of inventory to look at, interest rates are still near historic lows and, what’s more, there are some unbelievable deals in REOs out there.

But where should you start?

I recommend taking a good hard look at your finances and talking with a mortgage consultant to see how much you can afford to pay toward your mortgage every month. Make sure this amount includes taxes and insurance along with principal and interest on the home. The next step would be, working backwards from this number, to see how much of a home you can afford.

When you have that number in your head, see what’s available in an area you would like to buy in. Some people prefer to live where they have rented in the past but sometimes this is not always possible. Consider bedrooms, baths, and how close you are to work or if you would consider commuting.

Then, check how much you have in savings for a down payment. If you have about 10% down, in today’s market you should be fine. If you don’t, ask your mortgage broker what you need as a minimum down payment. Many programs today allow gifts from parents and other relatives for down payments as low as 6% so ask about those.

Then, get a Realtor. You can ask your mortgage consultant for a referral or just search online. Pick one you can trust.

Remember that first-time buyer homes are not always the dream homes people would like to own, but if you start somewhere near the bottom of the market (like today’s) you are likely to trade up in the not too far future to something that very nearly resembles your dream house!

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