House with a porch
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Had it with rentals and roommates and think it’s about time you took advantage of low mortgage rates and became a first-time homebuyer? To make that happen, just follow this simple step-by-step plan.

1. Check the selling prices of comparable homes in your area

Do a quick search of listings in your area on a number of websites, including the Zoopla, RightMove and FindaProperty.

Use Bankrate’s mortgage calculator to get an idea of what your monthly mortgage payments would be if you bought today.

2. Find out what your total monthly housing cost would be

Include council tax, home insurance and utilities in your cost. In some areas, these bill payments can significantly dent your outgoings and cash-flow.

Compare mortgage rates now to find the right loan for you.

To get an idea of what insurance will cost, pick a property in the area where you want to live and check comparison sites for a guide. You won’t be obligated to buy the policy, but you’ll have a good idea of what you’ll pay if you decide to buy. To find out what you’ll pay in council tax, check the website.

3. Find out how much you’ll likely pay in closing costs

Completion costs can include fees charged by the lender, title and settlement fees, stamp duty and prepaid items like homeowners insurance or homeowners association fees. Check out tools like this to learn more about upfront costs that may impact you.

4. Look at your budget and determine how a house fits into it

Fannie Mae recommends that buyers spend no more than 28 percent of their income on housing. Push past 30 percent and you risk becoming house-poor.

5. Talk to reputable estate agents in your area about the real estate climate

Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon?

6. Look at the big picture

While buying a house is a great way to build wealth, maintaining your investment can be labour-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there’s no landlord to turn to, and these costs can quickly drain your bank account.

7. Prepare for the hunt

If the numbers make sense for you, making these additional moves at the very beginning of the purchase process can save you time, money and aggravation.

8. Examine your credit

Tarnished credit or the inability to make a substantial deposit can put the breaks on your homeownership plans. That’s why it pays to look at your creditworthiness early in the home buying process. Get your free credit report and examine it for errors and unresolved issues. If you find mistakes, contact the credit reporting agency to make sure they are corrected.

Get your credit report and score today for free at myBankrate.

9. Get your docs in a row

Collect pay slips, bank account statements, P60s, tax returns for the past three years, statements from current loans and credit lines, and names and addresses of your landlords for the past three years. Have all of that paperwork ready for the lender. It may seem like a lot, but don’t be surprised if your lender wants a lot of documentation.

10. Find lenders and get preapproved

Getting an agreement in principle (AIP) for a mortgage helps you bargain from a position of strength when you are house hunting. Your bank or online are good places to start your search. Use Bankrate’s mortgage rates tool to find lenders offering the best rates.

11. If at first you don’t succeed, try, try … the government?

If you can’t find a bank willing to lend to you, consider the Help to Buy schemes including Help to Buy: Shared Ownership and Help to Buy: Equity Loan to help you take steps to buy your own home. The Help to Buy: ISA pays first-time buyers a government bonus. For example, save £200 a month and they’ll add £50, up to a maximum of £3,000, boosting your ISA savings of £12,000 to £15,000.