While it may be acceptable to snap up a pair of shoes on an impulse, the choice to buy a home requires thoughtful planning and decision making.

Whether you’re becoming a homeowner for the first time or you’re a repeat buyer, buying a home is a financial and emotional decision that requires the experience and support of a team of reliable professionals including a realtor, a lender, a lawyer and a range of other individuals.

The emotional part of the decision comes into play when you think about why you want to move. If you’re a first-time buyer, you need stability in your career and the desire to commit to living in the same community for five to seven years. You should want to establish roots in a neighborhood and look forward to decorating as you please without requiring a landlord’s permission.

Purchasing a home is a lifestyle choice that requires you to think about how you like to spend your time and the type of community where you want to live—such as a rural area without nearby neighbors, a high-rise building in a city or a home within a planned community with recreational amenities.

The more you understand your priorities for a home, the easier it will be for you to narrow your real estate decisions.

Homeownership can also be a powerful way to increase your personal wealth for you and your family, since you’ll be building equity in your home as you pay off your mortgage.

While your dream home may not be within your reach right away, you can take steps to become a homeowner the moment you earn your first paycheck.

In order to qualify for a mortgage to buy a home, you’ll need good credit, a pattern of paying your bills on time while still saving money and a maximum debt-to-income ratio—your gross monthly income compared to the minimum payments on all recurring debts—of 43% or less. Some lenders have stricter guidelines, so the lower your debt-to-income ratio, the better your chances of a loan approval.

While loan programs are available with low down payments of 3.5% to 5%—and a few programs offer no down payment at all—you’ll still need some savings to pay for closing costs, moving expenses and an earnest money deposit on a home. It also is very wise to have cash reserves on hand after you buy.

Saving money and preserving or improving your credit history are essential elements to homeownership.

Housing prices and rents vary from one location to another. In some markets, buying a home can cost the same or even less than renting.

Remember, when you’re a homeowner, you also need to include homeowners insurance, property taxes and homeowners association dues in your housing costs.

In addition, you should think about your plans for the future and how you spend your money—along with your comfort level with a mortgage payment. A lender will tell you how much you can borrow, but that lender won’t know how much you spend on travel or golf or your plans for potentially reducing your work hours when you have a family.

Once you’ve thought through the emotional and financial aspects of becoming a homeowner, your next steps should be to find a reliable, experienced realtor to become your partner in the home-buying process and to meet with a reputable lender who can discuss your options for financing your purchase

Buying and selling real estate is a complex matter. At first it might seem that by checking local picture books or online sites you could quickly find the right home at the right price.

But a basic rule in real estate is that all properties are unique. No two properties – even two identical models on the same street – are precisely and exactly alike. Homes differ and so do contract terms, financing options, inspection requirements and closing costs. Also, no two transactions are alike.

In this maze of forms, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more. Those professionals are the local realtors who serve your area.

Once you select a realtor you will want to establish a proper business relationship. You likely know that some realtors represent sellers while others represent buyers. Each realtor will explain the options available, describe how he or she typically works with individuals and provide you with complete agency disclosures (the ins and outs of your relationship with the agent) as required in your state.

Once hired for the job, the realtor will provide you with information detailing current market conditions, financing options and negotiating issues that might apply to a given situation.

Remember: Because market conditions can change and the strategies that apply in one negotiation may be inappropriate in another, this information should not be set in stone. During your time in the marketplace realtors will keep you updated and alert you to each step in the transaction process.

There’s nothing more frustrating than falling in love with a home and then discovering you can’t afford to buy it.

Consulting with a mortgage lender is the first step you should undertake in the home buying process. Almost all first-time buyers need a mortgage to finance their home purchase, so get prepared before you look.

When you’re armed with the knowledge of what you can afford, it focuses your search and allows you to make a move when you find a home you love.

Lenders offer borrowers either a pre-qualification letter or a pre-approval letter, but most realtors recommend you get a pre-approval letter before you start home shopping.

A pre-qualification letter states the amount a lender thinks you’ll be able to borrow based on your income and credit profile without any actual documentation.

However, mortgage lending standards have tightened since the housing crisis, and all mortgage loans now require full documentation and verification of income and assets—so most sellers will only accept an offer from a buyer with a full pre-approval letter based on verified information.

Your home hunt will benefit with a pre-approval for two main reasons:

• First, you’ll have completed the credit check and paperwork requirements for a mortgage, so you’ll know your ability to finalize a home purchase. If the lender finds a problem with your credit or an error on your credit report, you’ll have time to fix it before making an offer.
• Second, since your documentation will already be in place, a mortgage pre-approval will likely speed up the process once you make an offer.

To help you land your dream home, try a pre-approval service. A realtor should also be able to recommend a lender or two for you to interview. You can check for a loan officer’s license and read reviews online to be sure you’re working with someone reliable.

As a first-time buyer, you should call a few lenders to find someone experienced with first-time buyer needs who can possibly help you identify special loan programs in your area.

The best lenders take a collaborative approach with borrowers and explain all your loan options. When your lender checks your credit report, they should give you feedback on how to improve your credit profile.

They should also offer recommendations on how to handle your money between the time you apply for a loan and settlement day.

Your mortgage lender should provide advice about when to lock in your loan rate and discuss the pros and cons of various loan programs.

Your lender needs you to be honest about your finances and responsive to all requests for additional information, no matter how unimportant it may seem to you. The more cooperative you are with a lender, the easier the loan process will be.

You should be prepared with tax returns, W2s, bank statements, employer names and addresses, and your current landlord’s information.

Your lender will generate a mortgage approval based on your debt-to-income ratio and credit score, but you should also consider your budget and your own comfort level with the payment amount.

There’s no need to borrow the maximum amount you qualify for, particularly if you know you plan to spend money on items that don’t show up on your credit report. Your careful planning and preservation of your emergency fund are important for responsible, long-term homeownership.

A quick search on yourkingdom.com will bring up thousands of homes for sale. Educating yourself on your local market and working with an experienced Realtor can help you narrow your priorities and make an informed decision about which home to choose.

Before you begin your house search you should have a preapproval letter in hand from a lender and an idea of your comfort level with a prospective house payment. You and your Realtor can begin to search for homes for sale that fit your budget, but keep in mind that you don’t necessarily want to spend up to the maximum amount you can borrow. On the other hand, you can consider going slightly above your preferred price range as long as the monthly payment is still affordable or if you have extra cash to make a bigger down payment.

After you’ve established your price range you’ll need to narrow your search by neighborhood. You should be looking at neighborhoods that allow an acceptable commute to work. Think about the type of setting in which you want to live – urban, suburban or rural. Do you want a community with lots of outdoor recreational amenities; one with shops, restaurants and nightlife; or one with plenty of activities for children and good schools?

Many homes, whether they are single-family residences, townhomes or villas, are part of a homeowner association (HOA). Part of your search process should be to consider whether you want to live in an HOA or not. On the positive side, HOA rules help protect home values and the dues often include community amenities and maintenance. On the other hand, the rules also limit what you can do with the exterior of your home. You’ll also need to include HOA dues as part of your housing budget.

Condominiums and cooperative homes also have association dues and offer a different type of ownership, with the association owning the exterior of the property while you own the interior. These dues will be part of your housing budget, but they typically include some of your homeowner’s insurance and other costs, as well as pay for amenities such as a swimming pool or a fitness center.

It’s a good idea to visit communities at various times of day and night, and on weekends and weekdays, to get a feel for who lives there and what the activity level is like.

Two important elements of a neighborhood influence how well the homes in that community will hold onto their value: crime and schools. While Fair Housing laws prevent a Realtor from telling clients about crime statistics or talking about ‘good’ or ‘bad’ schools, a Realtor can direct you to websites that provide information about those topics. Even if you don’t have children and don’t plan to have them, buying a home in a well-regarded school district can help the property’s long-term value.

Most buyers start searching for a home online on websites such as realtor.com, but you can also ask a Realtor to help you find homes for sale. You can request email alerts that notify you when a home that fits your list of priorities comes on the market.

You can evaluate a home first by looking at photos and a description online. In many cases, homes’ online listings have virtual tours or videos that offer the opportunity to see more.

The next step in your house hunt is narrowing down your priorities to find the home that meets your needs.

Look at both new homes and existing homes. New homes are sometimes more expensive than existing homes, but they require less maintenance and often have lower utility bills because of their energy-efficient features.

For first-time buyers and repeat buyers alike, the decision to make an offer on a home is both exciting and a little scary. If your offer is accepted, the place you’ve chosen will be your home for the next several years. Not only should you feel emotionally satisfied by your choice, but you should also feel financially comfortable that you’re buying a home that you can afford and that you feel confident will hold onto its value or hopefully increase in value over the years. While no one can know for sure what will happen to housing values, if you make the choice to buy a home that meets your needs and priorities you’ll be happy to live in it for years to come.

For some homebuyers, living in a particular neighborhood takes precedence over all other priorities, but for others, the home itself matters more. Ideally, you’ll find the perfect home in the neighborhood you love at a price that’s below your budget, but realistically, most people have to make some compromises. You (and your spouse, partner or family) should make a list of what features you want in a home, such as the number of bedrooms, a fenced yard, granite counters in the kitchen, and then rank them in terms of priorities. Think about whether the house or the community matter more to you, and whether it’s worth it to you to make a longer commute in order to live in a home with a larger lot.

Once you’ve determined whether the location or the house itself matters most, you may have to compromise on some of your priorities. If the location is the most important factor for your home choice but you find that homes are priced above your budget, you can compromise in several ways:

• Look for a different home type within the community, such as a smaller single family home, a town home or condominium. Decide if you can live with one less bedroom or other features on your list.
• Consult with a lender or a financial planner to discuss your options for increasing your budget. While no one should overspend on a home, you should recognize that going $10,000 above your price range when you’re financing your purchase with a 30-year fixed-rate loan will actually add only about $30 to your monthly payment.
• Lower your expectations about the condition of the home. While everyone prefers a move-in ready home, you can often get a better deal on a home that needs some cosmetic repairs. Be careful, though, to have a home inspection and to evaluate the structure of the home to see that it meets your needs. Moving walls and adding a bathroom are costly renovations, while painting and replacing appliances are more reasonable.

If you have your heart set on a specific home style or a home with a larger yard for your children or to garden, your compromise is more likely to be in the location. If you’re willing to commute farther or perhaps choose a home in a community next to the ‘hot’ neighborhood, you can often find a more affordable home that fulfills your wish list. An experienced Realtor can help you determine when and how to compromise and should take the time to show you a variety of alternatives so you can make an informed decision about when to make an offer.

The cost of real estate financing is often greater than the original purchase price of a home (after including interest and closing costs). Because financing is so important, buyers should have as much information as possible regarding mortgage options and costs.

Yourkingdom.com provides consumers with extensive buyer’s information. Local realtors can provide mortgage information, discuss financing options and recommend loan sources. In addition, some realtors also originate loans.

Thousands of loans are available from a variety of lenders but, in general, the mortgage you choose will be determined by at least several key factors:

• How much down? Loans with 5 percent down or less are available – in fact, loans from major lenders with no money down have appeared in recent years.
• If you place less than 20 percent down, lenders will want the mortgage guaranteed by an outside third party such as the Veterans Administration, the Federal Housing Administration or a private mortgage insurer (required by lenders to protect against a mortgage default). Millions of VA, FHA and PMI loans are generated each year.
• How’s your credit? The best rates and terms are only available to those with solid credit. To get the best loans, make a point of paying credit cards, installment payments, rent and mortgage bills in full and on time.
• Are you a first-time buyer? It might seem that “first-time buyer” means someone who has never owned property before, but under most state programs, the term refers to those who have not owned property within the past three years. State-backed first-timer programs often feature smaller downpayments and below-market interest rates. For details, speak with your local Realtor.

To obtain a loan you must complete a written loan application and provide supporting documentation. Specific documents include recent pay stubs, rental checks and tax returns for the past two or three years if you are self-employed. During the pre-qualification process, the loan officer will describe the type of paperwork required.

Mortgage financing can be obtained from mortgage bankers, mortgage brokers, savings and loan associations, mutual savings banks, commercial banks, credit unions, and insurance companies. A growing number of realtors can also arrange financing.

While much attention is paid to the offering price of a home, a proposal to buy includes both the price and terms.

In some cases, terms can represent thousands of dollars in additional value for buyers ? or additional costs. Terms are extremely important and should be carefully reviewed.

You sometimes hear that the amount of your offer should be a certain percent below the seller’s asking price or an amount less than you’re really willing to pay. In practice, the offer depends on the basic laws of supply and demand: If many buyers are competing for homes, then sellers will likely get full-price offers and sometimes more. If demand is weak, then offers below the asking price may be in order.

The process of making offers varies around the country. In a typical situation, you will complete an offer sheet that the realtor will present to the owner and the owner’s representative. The owner, in turn, may accept the offer, reject it or make a counter-offer.

Because counter-offers are common (any change in an offer can be considered a counter-offer), it’s important for buyers to remain in close contact with realtors during the negotiation process so that any proposed changes can be quickly reviewed.

A number of inspections are common in residential realty transactions. They include checks for termites, surveys to determine boundaries, appraisals to determine value for lenders, title reviews and structural inspections.

No sensible car owner would drive without insurance, so it figures that no homeowner should be without insurance, either.

The essential idea behind various forms of real estate insurance is to protect owners in the event of catastrophe. If something goes wrong, insurance can be the bargain of a lifetime.

There are various forms of insurance associated with homeownership, including these major types:

Purchased with a one-time fee at closing, title insurance protects owners in the event the title to the property is found to be invalid. Coverage includes “lenders” policies, which protect buyers up to the mortgage value of the property, and “owners” coverage, which protects owners up to the purchase price. In other words, owners coverage protects both the mortgage amount and the value of the down payment.

This insurance provides fire, theft and liability coverage. Homeowners policies are required by lenders and often cover a surprising number of items, including in some cases such property as wedding rings, furniture and home office equipment.

Generally required in high-risk, flood-prone areas, this insurance is issued by the federal government and provides as much as $250,000 in coverage for a single-family home, plus $100,000 for contents. Local realtors can explain which locations require such coverage.

With new homes, buyers want assurance that if something goes wrong after completion, the builder will be there to make repairs. But what if the builder refuses to do the work or goes out of business? Home warranties bought from third parties by home builders are generally designed to provide several forms of protection: workmanship for the first year, mechanical problems such as plumbing and wiring for the first two years, and structural defects for up to 10 years. Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost. Insurance policies and warranties have limitations and individual programs have different levels of coverage, deductibles and costs. For details, speak with a realtor, insurance brokers and home builders.

The time to obtain insurance and warranty coverage is at closing, so speak with a realtor or insurance broker prior to closing. Be sure to ask about limitations, costs, deductibles and “endorsements” (additional forms of coverage that may be available).

The closing process, which in different parts of the country is also known as “settlement” or “escrow,” is increasingly computerized and automated. In many cases, buyers and sellers don’t need to attend a specific event; signed paperwork can be sent to the closing agent by overnight delivery.

In practice, closings bring together a variety of parties who are part of the transaction. For example, while the history of property ownership has been checked, it’s possible that the records contain errors, unrecorded claims, or flaws in the review itself, thus title insurance is necessary. At closing, transfer taxes must be paid and other claims must also be settled (including closing costs, legal fees, and adjustments). In most transactions, the closing agent also completes the paperwork needed to record the loan.

Settlement is a brief process in which all of the necessary paperwork needed to complete the transaction is signed. Closing is typically held in an office setting, sometimes with both buyer and seller at the same table, sometimes with each party completing their papers separately.

Whatever the case, the result is that title to the property is transferred from seller to buyer. The buyer receives the keys, and the seller receives payment for the home. From the amount credited to the seller, the closing agent subtracts money to pay off the existing mortgage and other transaction costs. Deeds, loan papers, and other documents are prepared, signed, and filed with local property record offices.

One of the best parts of settlement is that buyers and sellers need to do very little.

At the closing itself, all papers have been prepared by closing agents, title companies, lenders, and lawyers. This paperwork reflects the sale agreement and allows all parties to the transaction to verify their interests. For instance, buyers get the title to the property, lenders have their loans recorded in the public records, and state governments collect their transfer

You’ve done it. You’ve looked at properties, made an offer, obtained financing and gone to closing. The home is yours. Is there any more to the home buying process? Whether you’re a first-time buyer or a repeat buyer, you’ll want to take several more steps.

Those papers you received at settlement are extremely valuable, so hold on to them! In the short-term they can help establish tax deductions for the year in which the property was purchased. In the future such papers will be important for tax purposes when the property is sold, and in some cases, for calculating estate taxes.

Also at closing, determine the status of the utilities required by the home, items such as water, sewage, gas, electric and oil service. You want utility bills to be paid in full by owners as of closing, and you also want services transferred to your name for billing. Usually such transfers can be done without turning off utilities. Yourkingdom can provide contact numbers and related information.

About two weeks after closing, contact your local property records office and confirm that your deed has been officially recorded. Such records are public notices that show your interest in the property.

It is generally understood that sellers will leave homes “broom clean” when moving out. This expression does not mean “vacuumed” or “spotless.” Broom clean makes sense because it means the house is ready to be painted and cleaned.

For most owners a home is the largest single asset they hold, so it makes sense to protect that asset.

Many owners make a photo or video record of the home and their possessions for insurance purposes and then keep the records in a safety deposit box. Your insurance provider can recommend what to photograph and how to secure it.

You want to maintain fire, theft and liability insurance. As the value of your property increases such coverage should also rise. Again, speak with your insurance professional for details.

Lastly, enjoy your home. Owning real estate involves contracts, loans, and taxes, but ultimately what’s most important is that home ownership should be a wonderful experience. Enjoy!