You’ve decided to purchase a home and are trying to work out what you can afford. The first step you should take in determining what you can pay for is to speak to a mortgage lender. Actually the best step you can take is to undergo the mortgage process to the point where you can get a pre-qualification letter. You must also think about your general financial circumstances in determining how much you can afford to spend on a home purchase.

Buying property at present isn’t for sissies. However there’s a massive supply of homes priced at levels not seen since 2004, so you can take advantage if you have the money and can hang on to a home for five years or more. One blogger referred to the glut as, “You could argue everything’s on sale today.” Just follow the home buying strategy below, and you too could profit from buying a home.

* Location

This is the real estate agent’s anthem, and it simply means that identical homes can increase or decrease in value due to location. The best locations are those in prime spots such as within top-rated school districts, close to outdoor recreation and nature, those with a view, near entertainment and shopping, in economically stable neighborhoods, and near public transportation, healthcare and jobs.

Picking out a suitable location while home buying can be easy when you know the town. You might even have specific areas in Sacramento, California that you prefer to settle down in. It would make sense to be located near friends and family if you are looking for support from them.

* How much house can you afford?

Even if you’re short on funds, the home buying process will go smoothly if you get familiar with the real estate market and narrow down your choices to fit within your budget.

How much cash do you have available for a down payment? How much do you anticipate closing costs to be? The answers to these questions will help you determine what kind of mortgage you can get.

* Size of the Home

You can start the process of finding a perfect home once you have a workable price range. List the things you want, like hardwood floors, skylights or a spacious living room, and the things you definitely need, like three bedrooms, a garden, a first-rate school district, etc. If you discover a house that comes close to having all your needs but doesn’t have all you want, give it another look.

Will you be able to handle a huge rambling home or do you want something smaller and more modern. Remember the plumbing and electricity is easier handled by a building supervisor than by you. Is there scope for expanding the home at a later date? Home buying today must cater to your expected future needs for the next decade. So consider all these tips.

* Get pre-qualified for a home loan before you shop with a realtor

While a loan from the bank is always an option, saving up on the deposit will reduce your financial compulsions. When home buying is a priority with you, make saving for the home a priority as well. Put aside a fixed sum from your earnings every month to build up your nest egg. If you save about 10 to 15 percent of the house cost, you will get a loan faster, and at a lower interest rate.