What are the initial steps toward home ownership?

My husband and I have been married for 4 years and renting for 6, we both are considering the prospect of owning a home, but we live in Chicago where homes are very small and expensive. We have 3 kids. What should our credit score be for us to get a decent interest rate and loan? Is there any not for profits that assist first time home buyers for free? Please only summit intelligent and useful responses.

well the first step is having 20% of the money to put down.

if you don't you will have to pay PMI, Banks noqw offer second loans to pay for the PMI but i don't recommend this, you are losing the advantages to buying a house and making your bank rich (in interest) at the same time..

here is a site that has some very simple practical answers to the most asked questions

http://www.hud.gov/buying/comq.cfm

Good LUck, I live in the chicago area and ito be honest if i had to buy my house again (bought in 2000) at the price it is now, i don't think i could afford it..

There are so many other things to take into account, other than credit score. Call a local Mortgage Broker. It shouldn't cost you anything to get pre-qualified for a mortgage.

Others will be better to give you the specifics you asked about, but in terms of getting a good interest rate, one key consideration is your down payment. If you have a target price in mind, and the payments will be higher than your rent now, try putting away the difference in a bank account while you search, so you have some cash available for a down payment or for new things for the house

Your credit score should be above 620, but consider your long term debt as well. A lender will give you all the correct answers and in writing, which is important. Check with several local lenders. I say "local" because you are talking about a lot of money you will be spending and being face to face with someone can tell you a lot about the person and his/her company. I don't advise using an "online" lender. If something goes wrong, you want to walk into their office and talk to them face you. They will prequalify you and you will know exactly what you can afford to spend on a new home.

#2 make a list of the things your new home "has to have", and a second list of "would like to have". Once you find the Realtor, give them the list.

#3 I suggest you visit open houses in the area you want to live. The agents holding open, typically work that area and when you find one that you are comfortable with, ask them to help you find your dream home. Obviously you can also get recommendations from family and friends. But sometimes finding them on your own, is best.

That's the first 3 steps. Hey, thanks for being in the market to buy a home. There is no doubt you will have a lot to chose from. Take your time. Enjoy the process and the anticipation of owning your own! HUGS FROM MINNESOTA