Buying a house is a process involving a number of specific steps, some of which may be optional but all of which should be considered by the buyer in devising a strategy for acquiring the house that he or she wants. The strategy must begin with the decision to buy a house and continue through to taking possession and paying off the mortgage.
Warner, Serkes, and Devine (1990) make a good point when they note that two of the most important steps begin with the decision to buy a house--deciding what sort of house you want, and determining what sort of house you can afford. The two must be matched until the buyer understands the type of house sought and the price he or she is able to pay for it. The authors offer this advice: "Trust yourself, not experts" (p. 2). In order to do this, though, you have to be certain of what you want and have enough understanding of the market to know a good deal when you find it.
It is possible to adjust the way you pay for a house to make it more affordable, and this is determined in part by the size of the down payment you can make. Shenkman and Boroson (1989) note that there are two ways a down payment can affect what house to purchase. First, since a certain percentage is required, the size of the down payment is directly related to the amount one afford for the house. Second, the size of the down payment will also determine the monthly payments, and the buyer has to be certain that he or she will be able to afford those monthly payments as well (pp. 14-15).
Raising the money for the down payment can be part of the procedure for buying a house, but there are many ways to accomplish this. The buyer may have the money, be able to borrow, have access to a government loan, or have an existing house that with equity that can be used to buy a new house. In some cases, it is possible to substitute a second mortgage for a down payment. Once the buyer knows the type of house he wants and th...