If you are considering buying your first home, make sure you are prepared for the adventure you have decided to take. With house prices being as low as they are, it is hard not to consider buying a home, but if you have never owned a home before and will be a “first time home buyer,” then please read this. It might just save your from making a big mistake.

Many folks are unaware if they have the ability to buy a house. When I mention ability, I mean qualify or having good credit, enough income and the necessary employment history. The credit score is most important indicator used in the qualification for a home. If your score is too low, even if you make a ton of money, you would be unable to obtain a mortgage loan. Also, credit problems can take the longest to correct, in terms of a home purchase. So before you go apply for a loan, pay for a tri-merge credit report and score. Make sure the score you are seeing is a FICO score and I recommend going to one of the 3 credit bureaus. I also recommend that you spend some time on the site in order to read some of the educational material regarding your credit.

Have your been employed in the same job or same career field for at least 2 years? If the answer is no, you can not get a loan to buy a home. Although the 2 years in the same career field can be tricky, this is sometimes at the discretion of the lender. Also, if you are commission based, be prepared to be highly scrutinized because you have the highest risk of failure. Finally, if you know you will be quitting or changing jobs, you may still be able to get the loan, but you may want to really consider if it is a good idea to buy a home in the middle of a change like that.

Planning for a new mortgage payment can be the difference between enjoying your new home and hating your new home. TV advertisements talk about rates and payments, but the payments you see on TV do not include your property taxes or your homeowners insurance. These two additional items can increase your payment greatly. To plan for this, you should first do a budget to know how much of a payment you can actually afford. Once you have done this, I recommend that you then search for homes that you would be interested in purchasing. When you find a home you like, find out what the property taxes would be and how much it would cost to ensure. This will allow you to prepare for an actual home payment. Finally, I would suggest that you try to follow your budget for 6 months prior to buying a home.

Closing costs, down payment, appraisal, and home inspection are all costs that you will need to plan for. Your appraisal and home inspection will probably be just under $1,000, but the down payment and closing costs will depend on the mortgage that you qualify for and the terms of the purchase. These are best to discuss with a mortgage officer and real estate agent to be more accurate, but there are many online resources that can help at least ballpark these costs for planning purposes.

Debts and your debt to income ratio will have a lot to do with the amount of home you would be able to purchase. As a rough guide, you want your debt to income below 50%, but you can go up to 60% in some cases. This ratio uses debts from your credit report and does not use bills like utilities, cell phone, TV, internet, etc. When planning, be realistic about what you can afford, if you can barely make the payment, you may want to wait or look at less expensive homes.

Now for the wildcard topic, costs of ownership. Let us assume that you did everything else right and you have purchased your first home. Congratulations, but did you remember to plan for all the items necessary to keep up or furnish your new home? Most homes have a yard to maintain, so you will need a lawnmower and a shovel, weed killer, etc… Do you have the money left to buy these items? While you may or may not have enough furniture to make your new house look like a home, do you at least have window coverings, or the money to buy them? Heck, moving in and paying for all the utilities alone can add up.

The final items of warning are that if you plan on staying there for awhile, make sure to set money aside for when the water heater goes out, plumbing bills, a new roof, etc. It is inevitable that things will break, but it is now your responsibility to fix. Enjoy your new home.

Learn more about first time home buyer programs. Stop by Bill Deptuch’s site where you can find out all about buying your first home andhome owners insurance prices to help you plan your first purchase.