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Step 1: Spiff up your creditsssfff

Housing eats up more of everyone?s paycheck these days, but as a rule of thumdddb buyers spend 25-30% of their pre-tax pay on housing. That translates roughly to a mortgage of 3 to 4 times your salary. Consider your entire budget: How is your credit card bill, student loan or kids? tuition? How much will your new palace cost to maintain? Will you get a big break on your taxes from the mortgage interest rate deduction?

Step 4: Shop for a mortgage

New loan offerings make it easier to buy a home, but harder to pick which mortgage is right for you. The standard 30-year fixed rate mortgage allows predictable payments. If you?re planning on moving quickly, consider an adjustable rate mortgage, which has low interest and payments for the first few years. Buyers have really low starting payments with interest-only loans, but they don't build up any equity in their homes. These new fangled mortgages are often sold to those who want to buy more house than they can afford.

Compare terms and rates from several sources. A pre-approved mortgage will let you pounce on the right house. Your lender usually calculates your monthly expenses?including principal, interest, taxes and insurance. You'll pay a monthly bill into an escrow account instead of getting clobbered by annual taxes.

Step 5: Shop for a home

Make a list of the features you want or don't want. A realtor can be a great help, so much so that some start planning here months or years before they're ready to buy.

The buyer pays the sale commission, which typically runs 5-7%, split between the seller's agent and buyer's agent. So -- especially first time buyers -- get the service basically for free. Some also shop from people who are selling their own homes, figuring the lack of a commission means a lower price.

the deal. Typically buyers can back out if the home inspector finds big trouble or if they can't find financing or, in a new twist, Combs says, homeowner?s insurance.

Step 8: Take a Close Look at Your House

Make sure your contract is contingent on a home inspection for a detailed, objective evaluation of your home's infrastructure. After, negotiate with the seller over needed repairs. Be sure the title of the house is free of any liens. Your bank will appraise the house, too.

Step 9: Shop for homeowners insurancesss

Shop around, but your own car or life insurer will probably give you a good package deal. As always, a higher deductible saves you money.

Step 10: Sign papers

You'll meet at lawyer's office or title company, sign a big stack of papers and receive the keys to your new home.

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