Homeownership can seem daunting, but a financial checkup can set the right path

Homeownership is a big endeavor — whether for yourself, or guiding a child, loved one or mentee as they begin the process. A financial checkup is a good first step:

1. Determine your debt-to-income ratio. This is your monthly bills divided by your gross monthly income, before taxes. A lower DTI is less risky to lenders.

2. Know what you can afford. Consider keeping housing costs below 30% of your gross income. Budget for mortgage payments, property taxes, insurance, utilities, and repairs.

3. Know your credit score. Typically, FICO scores over 760 mean more favorable mortgage rates and terms.

4. Check if you qualify for grants and low-interest loans using local state government and the Federal Housing Authority and Federal National Mortgage Association websites.

Paying off debt, building savings, and pre-qualifying for a mortgage before house shopping are all important next steps.