Thinking of buying a new home? Follow these simple steps to prepare yourself. By determining what you can afford, what you are looking for, and who you will work with, you will be ready to put a deal together as quickly as possible.

Understand Your Current Financial Picture

A home is most likely to be the most expensive purchase you will make in your lifetime. Knowing how much money you can afford to spend is an important first step in the homebuying process. Start your journey to a new home by focusing on your financial picture.

How much income do you have? Of course, you will consider your job salary, but don't forget any income streams, including alimony, investment income, rental properties, side jobs.

Create a tally sheet of all of your expenses. Some things to take into account: car payments, credit card debt, insurance, medical bills and prescriptions, utilities and groceries. Also be sure to allow some money for discretionary spending on clothes, entertainment, travel, and holidays. Be honest with yourself here; if you do not accurately capture your expenses and overspend on your house you will find yourself with hard decisions to make later.

Calculate your anticipated downpayment. Proceeds from selling a current home can be included here, as well as any gifts you may get from friends and family, in addition to your savings.

Understand Your Housing Market

The second step is to understand your housing market. Doing research to understand what kinds of homes are available, as well as what kinds of neighborhoods, will help you zero in on what you want. Having a basic understanding of the real estate climate in your area will be helpful as well.

What type of home are you interested in? Even an older single-family home will cost more, both to buy and carry on a monthly basis, than new construction townhomes Salt Lake City markets confirm. Consider costs when deciding on the type of home you'd like to own.

What is your desired neighborhood? Would you like to be in the city near the action, or in a quieter suburb? Would you prefer to be closer to work or closer to your kids' school? Focusing in on a neighborhood can help you decide how to spend your budget.

What is happening in your marketplace? Is it a buyer's market with lots of inventory, or a seller's market where the number of buyers is higher than the number of listings? Understanding the market conditions in your area will give you a sense of how quickly you will have to make decisions, and how willing a seller may be to negotiate with you.

Understand Your Homebuying Team

No one buys a home alone. Assembling a great team of people who can provide the help you need to close your deal is essential. Consider asking friends and family for references, as word of mouth is a valuable tool for finding the best service people.

Choose a realtor to work with. Your realtor stands to make a fair bit of money, so do not be afraid to ask questions, or even interview more than one before you decide on who to work with. The home buying process, even when it goes perfectly smoothly, is fraught with stress and full of tension-filled moments, so take the extra time to find someone you feel very comfortable with.

Choose a mortgage broker or banking institution. Your realtor may have someone to recommend and your friends and family may have worked with someone they found especially helpful. Establishing a relationship early will allow you to have a mortgage preapproval before you begin looking at homes. This is especially important in a seller's market, where deals may be made very quickly.

Choose an attorney or title company. Money changes hands through agents, and who those agents are vary state by state. If your location requires an attorney, look for someone who charges a flat fee to handle your closing.

Having these factors handled will ensure that you are ready to choose a new home and make your deal come together.