On the Market

Buying your first home may be easier than you think.

by Stacy L. Adams

I answered the phone with trepidation. Would I be the one? Did I get it?

No, not the new job, lottery jackpot, or the starring role in the next Oliver Stone blockbuster. The one bedroom, split-level I'd put an offer in for just a few days earlier.

A home. I was a single dame on the verge of owning her own home. Hey, hear me roar.

According to the National Association of Realtors, single women represent the fastest-growing segment in the housing market. We buy 12% more condominiums than men, and we make up 35% of first home buyers. And due to many programs designed to encourage single women and minorities to invest in a new home, the purchasing power of the first-time home buyer is steadily rising.

As terrifying as the prospect of home-ownership is, particularly for those who view plants as a commitment, there are benefits. You're building equity instead of paying rent. Interest payments on your mortgage can be tax deductible. And you could make a passel of money when you finally sell it, particularly if you've had the good sense not to buy near a nuclear waste treatment plant. Some tips from a happy home owner:

Deep in your heart of hearts, you've probably always had an ideal vision of your perfect home. Sprawling lawns, cathedral ceilings, hand-carved banisters. Scratch that, and move on to what you can actually afford.

You can usually qualify for a mortgage equaling about two times your annual income, and you'll need enough cash for a 5 to 10 percent down payment. Figure in the closing costs, which include percentage points tacked on to your mortgage (1 - 4% of the total mortgage) by your lender. The lower the points the better. You'll need a property appraisal (about $250) and a survey (about $200), during which strangers tromp through your new pad and determine what shape it's in - literally. Appraisers look at the condition of the property and surveyors measure the contents. You'll also need a pest inspection - which unfortunately does not mean the neighbors.

Other major closing costs include a prepayment of insurance and real estate taxes into an escrow account. You pay up front and the bank takes care of the bills. Future payments into this account come out of your monthly mortgage payment. Your real estate taxes will vary based on area. Suffice it to say a sprawling villa in Beverly Hills will cost you more in taxes than say, a sprawling villa in suburban Cleveland. You are responsible for securing your own insurance. A good idea is to contact your auto insurance company, they'll usually give you a good deal on both policies. Figure in about $500 for various state/city fees and taxes, and you're all set.

Breathe deeply into a brown paper bag, and call an agent experienced in the neuroses of the first-time home buyers - one with a beeper. Between your agent, newspaper listings and a new generation of real estate television shows, you'll find a house you love and can afford.

Once you've located your dream home, don't be afraid to bid low. Remember that the asking price is the highest bid the seller expects to get. Figure out what you're going to have to fix when you move in, and take that off the asking price. Then knock off whatever you and your agent think you can get away with. If your bid is rejected, try, try again.

Start shopping for a mortgage once your bid is accepted. Many local banks provide automated rate information over the phone, as do mortgage companies. Interest rates can change daily, so check often and find a lender whose rates are consistently lower than others. You'll have to submit an application listing your assets and liabilities.

Remember, a mortgage application is not your resume, so it's a good idea to tell the truth. The lender will do a credit check. However, a few blemishes on your credit record will usually not stand in your way of getting a mortgage. Ask your bank or mortgage company to check into specific rates based on your income, which could be lower.

As closing day approaches, you'll ricochet between fear, elation and disbelief - a feeling that becomes more pronounced as you hand that big fat cashiers check over to the bank after signing what seems to be a million different legal documents. This is normal. Keep in mind that when your deed arrives in the mail, nothing beats the feeling of knowing that that baby is all yours.