Getting started in the home buying game is easily overwhelming. There are a multitude of factors that go into financing the right house, not to mention finding it in the first place, and after that you have to figure out how you’re going to move from your current residence into your new one… Hopefully this will help you figure out a few things, and as always, your lending professionals will be able to clarify more.

One of the first things you’ll need to do is determine how much you can afford. No two homebuyers are alike, and every financial situation is different, so there is no set standard. However, a good base estimate is two to three times your household income; if you make around $50,000 a year, you might be able to afford a home valued between $100,000 and $150,000. As a reminder, other factors such as credit and employment history, as well as how much you currently have in savings, and how much debt you have. It’s also good to ask yourself how much you’re willing to put down as a down payment, how much of a monthly mortgage payment you can afford, and what kind of mortgage is best suited to your needs. We’ve shared information about various mortgage and loan types in recent blog posts. Because your financial situation is as individual as your fingerprint, it is best to talk with a lending professional about which mortgage type would be the best option for you.

While you’re talking with your mortgage lender, ask about fixed rate versus adjustable rate mortgages (ARM) and which would be better for you. Both have their good and bad points; a fixed rate mortgage keeps the same interest rate locked in for the life of the loan, whereas an ARM’s interest rate will fluctuate depending on changes in a market index, a set of economic indicators used for determining those interest rates.

Another thing to consider is how much cash you’ll need to have on hand at various points in the home buying process. The down payment is usually paid in cash (unless you get one of those loans where a down payment isn’t needed), and you’ll also need some ready money for closing costs, which are the fees associated with processing the paperwork for purchasing your home. You’ll also need earnest money, which is a deposit you put down when you make an offer on a house. Even if you’ re just thinking about buying a home, now is a good time to start saving.

This should give you a decent idea of what to start collecting and saving as you being the home buying process. As always, our lending experts are on hand to answer any questions.