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B uying a house is exciting and frustrating. Fun and drudgery. Energizing and draining. All at the same time. If you're thinking about diving into that process to buy your first home, you may be experiencing yet another state: confusion. You're wondering where to begin.

       Doing a little preparation will boost your chances for making decisions that are truly right for you. And it will help you weather the ups and downs ahead that are a natural part of the home-buying process. Coming up with answers to the following questions will get you off to a good start.

Do I really want to do this?

You may ask yourself that more than once during your search for a house. But ask that question now, before you even start looking. Owning a house isn't just about having a cozy nest to come home to. It's a lot of work that eats up your leisure time. Are you willing to give up lots of Saturday canoe trips so you can mow lawn, prune shrubs, and clean rain gutters? Does it appeal to you to take fewer vacations so you can meet house payments and pay for home repairs? Be honest with yourself now so your nest doesn't start feeling like a trap later.

How much house can I afford?

This is the big one on home buyers' minds. Can I afford the kind of house I really want? Sit down with your credit union mortgage loan officer to find out. He or she will crunch the numbers for you--a process called prequalification--or give you information on how to calculate it yourself. One common formula is that total monthly debt load (mortgage, credit card balances, car loan payments, and so on) should equal no more than 36% of your gross monthly income. Once your calculations show you what size mortgage payment you can afford, you or your loan officer can figure out how much you could borrow at current interest rates. Add in how big a down payment you can make, and you'll know roughly what housing price range you should be looking at.

How much house do I want to buy?

This really is "part B" to the "how much can I afford" question. Oftentimes home buyers get zoned in on buying a house at their maximum of affordability. The thinking is, if I can get a mortgage worth X dollars, why not go for it? But step back and look at how that mortgage fits into the rest of your life. How much of your monthly paycheck do you want to devote to a house payment? Would you rather buy less house and have more for vacations, for instance, or for a savings nest egg? You might even want to give this a test run. Say you're paying $600 a month in rent now, and you qualify for a $1,000 mortgage payment. For a few months, take that extra $400 and stash it in savings so you can't spend it. Find out how that feels. Do you feel comfortable paying out that $1,000 each month, or would you rather trim it and have more left over for other things? A side benefit if you decide to go for it--that extra savings can improve your down payment or help with moving expenses.

How much do I need to save before I can buy?

People often think saving to buy a house means accumulating a down payment. But there's more to it than that. You'll need money for closing costs, a house inspection, various fees, moving and immediate house fix-ups. Plus you'll need reserves left over to cover the unexpected. Still, the down payment usually accounts for the biggest chunk of what you'll need to save. How big a down payment should you count on? A common minimum figure these days is 5% of the value of the house. But in certain programs, down payment requirements may be even lower than that. Again, your credit union mortgage loan officer can fill you in on the options available.

Can my parents help me buy a house?

One way parents can help is by co-signing the mortgage, which makes them equally responsible for the loan. Perhaps the most common form of parental help is cash for the down payment. By federal law, each of your parents can give you up to $10,000 a year as a gift, without incurring gift taxes. Usually you'll need a letter verifying it's a gift. If it's a loan, it will figure into your debt-load calculations, thus reducing the size of the mortgage you'll qualify for.

What mortgage types are there to choose from?

Mortgages fall into two key categories: fixed-rate and adjustable-rate (or ARM). In a fixed-rate mortgage your monthly payment stays the same throughout the life of the loan, which might be 10, 15, 20, or 30 years. ARM interest rates start out lower than fixed mortgage rates, but they can climb (or decrease) during the loan term. The amount of annual increase is set in advance, with a lifetime cap. For instance, an ARM might have a 2% annual cap and a 6% lifetime cap. That means an ARM starting at 7% could go up no more than 2% per year, and could never rise above 13%.

What do I really want in a house?

Prospective home buyers often hit the pavement, galloping from house to house, figuring they'll know "the right one" when they see it. In reality, you can count on there being trade-offs. Think about the features that are absolutely essential to you. For instance, do you really need a family room? Would you go crazy if you didn't have space for a garden? Is it important that your child attend a neighborhood school? By being clear on this up front, you can avoid making trade-offs later--especially when you hit house-hunting burnout--that you really can't live with in the long run.

Should I use an agent?

An agent can be a useful source for finding out about available homes for sale. Remember, though, that most real estate agents work for the seller, not the buyer. It's the seller's best interests they're obliged to look out for, not yours. So even though a realtor can help you scout houses, you'll need to be guarded about what you tell him or her. In some areas, buyer brokers are becoming increasingly common. Still, buyer brokers work on many different arrangements. Some work for both sellers and buyers (but not on the same deal); others work exclusively for buyers. If you decide you want an agent, of whichever type, start asking around now for recommendations from friends and colleagues. Be sure to ask about payment: Some buyer brokers work for a flat fee, others for a percentage of the sale price.

When should I see a lender?

Now. As you've already seen, your credit union mortgage loan officer is a valuable resource to turn to for help in digging up answers to many of your "homework" questions.

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