Buying home now requires groundwork

Mortgage interest rates dropped recently and home prices have moderated in many areas, making it a good time to buy. If you've never bought a home before or if you currently own a home but have never bought and sold at the same time, the process can seem intimidating.

You can ease your anxiety by formulating a plan and assembling the best team of professionals you can find, including a mortgage person; a real estate agent or two if you're buying and selling in different locations; inspectors; an insurance agent; a closing agent or escrow officer; and an attorney, depending on where you're buying.

The key players on your team are the mortgage person and the real estate agent. They can help you line up the additional help you need.

The first step is to find out how much you can afford. Most buyers need a mortgage in order to complete a home purchase. A lender will qualify you for a loan amount depending on how much cash you have available for a down payment and closing costs -- the various fees associated with buying or selling a home.

Other relevant factors are your credit score, your verifiable income and what type mortgage you decide to use for your purchase.

HOUSE HUNTING TIP: You can work with a mortgage broker who will shop around for you and place your loan package with the lender offering the best deal. Or, you can work directly with a lender. Just make sure you understand what kind of loan is being offered. You might want to check with an independent party like your accountant to determine which kind of financing is best for you.

Once you know how much you can afford, ask your mortgage broker or lender to have you preapproved for the financing you need. This will put you in a good bargaining position with the seller.

While you're checking on financing, you should also find a real estate agent. You want someone you trust and who you know will represent you professionally.

A good seller's agent can help you get ready to sell your home by creating a task list of the things that need to be done before your home goes on the market. Your listing agent should be able to give you the names of people who can assist with painting, inspections, landscaping and whatever else you need to prepare your home for a profitable sale.

THE CLOSING: With this groundwork completed, you are ready to hunt for a home.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.