Tips can help those buying that first home

Buying a home for the first time can be scary, but as with anything else in life, the right preparation can bring about good results. Remember: The right home for you is one you want and can afford.

Here are some tips for first-time buyers:

Ask yourself if you're ready. You need to decide whether you're financially ready to buy a home, says Connie Barbosa, vice president and branch manager of Slade's Ferry Bank in Somerset, Mass. She suggests that first-time buyers ask themselves some simple questions:

• Do you have a steady job and income?

• Do you plan to stay in the same area for a few years?

• Do you have enough money set aside for your down payment and closing costs?

• Do you have an emergency fund?

• Do you live within your means, avoiding credit-card debt?

Another consideration is whether you're mentally prepared for the responsibility, says Charles Glass, a real-estate agent in the Washington, D.C.-Maryland market.

"A first-time home buyer is probably used to renting," Glass says. "They've got to get used to budgeting a little differently in terms of having a reserve when things go wrong. And whether it's a new home or an old one, things will go wrong. Experienced homeowners know this. First-time buyers don't."

Find out what you can afford. When you're sure you have the right mindset to be a homeowner, it's time to determine how much house you can afford. Probably the best way to do that is to get pre-qualified for a loan. Some agents won't work with someone who isn't pre-qualified.

There are three options for pre-qualifying: go to a lender with whom you have already established rapport, find a real-estate agent you trust and follow the agent's recommendations for a lender or research lenders online.

Glass says the first option is the best because "if you've built a relationship with a lender, they will go to extra lengths to make sure they qualify you for the loan."

Your total monthly mortgage payment — principal, interest, taxes and insurance (or PITI) — should not exceed 32 percent of your monthly gross income, Barbosa says. The U.S. Department of Housing and Urban Development (HUD) suggests that figure should be 29 percent. So this is not an exact science. You can calculate a ballpark figure from this information, but then talk to your lender to get a better feel for how much flexibility you might have with different lending arrangements.

Remember, the bigger the down payment, the less you're borrowing, and the less expensive your mortgage will be in the long run. HUD offers programs to help first-time buyers, too.

— Salvatore Caputo, Bankrate.com