Take a deep breath.

If you've been renting up until now and think it's time to use your money to build equity in a home as well as to recoup the considerable tax deductions of holding a mortgage, you're right!

Still, it's a big step. Working together, I'll make sure to provide you with any information you need and walk you through all of the steps so you feel comfortable throughout the process.

Below is some basic information to help you get your feet wet.* The parameters vary greatly from person to person and I recommend a more detailed discussion with both myself and a qualified mortgage lender when you're ready to move forward.

How much do you need for a down payment?

This is an enormous question for first time homebuyers who will have to put down a considerable amount of money. Traditionally, if you are unable to put down 20% of the purchase price, your lender will require you to purchase mortgage insurance (PMI). Check with your lender for the most up-to-date rates, but here's a rough guide to PMI costs for a $300,000 loan:

• 5% down: .78% per year ($2340.00 or $195/month)
• 10% down: .51% per year ($1530.00 or $127.50/month)
• 15% down: .34% per year ($1020.00 or $85/month)

Typically, 1 - 2 months of PMI is paid at closing.

It is also possible to arrange a "piggyback loan" to make up the difference. With low interest rates, that can be an attractive option, particularly since the interest payments are deductible just as they are on your standard mortgage. But the only way to be sure which option is best for your needs is to consult a mortgage lender directly.

How do you qualify for a mortgage?

The first step is to get in touch with a reputable mortgage lender. Before we start looking at homes together in earnest, it's always a good idea to get a pre-qualifying letter from your mortgage lender. After a quick check of your credit history and basic finances, your lender will be able to give you a rough estimate of a realistic price range. This will help us filter your search and give you peace of mind about placing a bid.

How do you bid on a house?

When we find you a home you're ready to bid on, we draw up a contract that details your offer. The contract is submitted to the seller with a good faith deposit. Additionally, we encourage prospective buyers to write into the contract an additional interim payment that will be deposited into escrow prior to closing if your bid is accepted.

Why does this matter since the seller won't get any money until closing? In a heated market, committing yourself with additional funds can indicate to a seller that your offer is serious. There are no absolute rules or magic formulas to this step, and it is completely up to you. I will do my utmost to give you as much information as you need to make your decision.

What happens if your bid is accepted?

At this point, things happen very quickly. In the state of New Jersey, there is a 72-hour attorney review period during which either party can walk away from the deal with impunity. Scary, it's true, but the seller can decline to sell you the house during this period for any reason (or no reason) even after accepting your bid. On the other hand, you can do exactly the same.

Once you are out of attorney review, you have a short period (generally a week), to complete your home inspection. Don't worry about arranging for a home inspector on short notice; this is standard procedure and they do it on a regular basis.

Based on the inspection report, you can opt to ask the seller either to make repairs or offer a reduction in the sale price. Of course, they can say "no" in which case you'll have to decide whether or not to move ahead.

No matter what, it's a negotiation and having a savvy broker like me on your side will help you determine the best arrangement.

Who pays the broker fees when you're buying a home?

As a buyer, you pay NO broker fees. You are, however, responsible for your closing costs, which range depending on the type of loan and your individual lender. Again, make sure to discuss this with a qualified lender when you are arranging for your pre-qualification letter.