Lenders use slightly different formulas for arriving at "total monthly house payment". These costs generally include your mortgage principal and interest payment, property taxes as a monthly figure, and hazard insurance as a monthly figure. These four items are referred to as PITI (principal, interest, taxes & insurance). If you're required to pay private mortgage insurance (PMI) because your down payment is less than 20%, those premium payments will also be included. If you decide to buy a a condominium or town house, the monthly homeowner's association fees will be included. Keep in mind, these formulas aren't cut and dry and things change from lender to lender, so your best bet is to consult.

What Type of House Do You Want?
Perhaps you know exactly what you want...2,200 square foot ranch style home on a wooded lot. If so, your realtor can look immediately for only that type of house. On the other hand, if you don't know what you want, but "you'll know when you see it", you need to complete the Home Shopping - Needs and Wants checklist at the back of this section. It will help you define what you really have to have and really want to have in a house and neighborhood. This will help your realtor considerably when searching for the right homes to show you. When you look at homes, bring your checklist with you and pick up flyers at each home, so you'll remember which home offered what.Get Your Financing in OrderYou can get together with a lender to get your loan application completed and the financing process started. Be prepared to provide the lender with copies of any important and necessary information.

Making Your Purchase
Once you have found the perfect house, your realtor will take you through the purchasing process:

• Submit your offer to buy the house. The seller may accept your first offer, or you may go through one or several counter-offers before you and the seller agree on the terms of the sale. Once you both agree, you have a contract of sale which spells out the details and responsibilities of all parties involved in the transaction