The Easy Path to Home Ownership

The way things are going, you'd think that by this time next year no one in America will still own a home.

Yes, housing markets have slowed. Sure, plenty of borrowers got burned by overextending themselves in hope of cashing in on the housing boom. Homebuilders like D.R. Horton (NYSE: DHI) and Pulte (NYSE: PHM) have to offer incentives to coax buyers out of the woodwork. But does that mean people will stop buying houses? Is this the end of the American dream of home ownership?

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Of course not. In fact, it's a unique opportunity for those who had been priced out of their housing markets. So if the idea that the sky is falling hasn't dampened your interest in owning your own home, read on.

Gimme shelter
Buying a house is as simple as it ever was. You just need discipline, hard work, and time. Here's your blueprint for your next home.

Start saving. The best time to start putting money away for a down payment isn't while scouting out neighborhoods and visiting open houses. To set aside enough to handle any credit conditions, the sooner you start, the better.Know what you can afford. The mistake many people made during the housing boom was in assuming the market would turn a risky financial decision into a gold mine. If you could count on home equity loans to get more cash, it didn't matter if you earned enough to cover your payments every month. Plenty of people got away with that early on, but those left holding the bag now face losing everything. You can avoid that mistake at the start by figuring out how much you can spend and sticking to your limit.Beware of gimmicks. Do those monthly payments sound too good to be true? They probably are. Many unscrupulous financing methods have disappeared under close scrutiny and tighter credit terms. But with Wells Fargo (NYSE: WFC) having exited the subprime market, and E-Trade Financial (Nasdaq: ETFC) looking to get out of mortgages entirely, you can still find risky mortgages from the remaining players that could threaten your ability to keep up with your payments in a few years.Negotiate like a pro. With desperate sellers and a glut of inventory on the market, buyers have the best conditions for good deals in years. Take full advantage -- consider making low offers, and don't let real estate agents pressure you into making fast decisions. You have the leverage, and time is on your side, so consider all your options.

Don't jump the gun
You may be tempted to take a shortcut through these steps. If you find the perfect house, you probably won't want to wait until you've saved enough for a sizable down payment, or you might want to go beyond your housing budget.

The key to financial security is to know your limits. Giving up an opportunity that jeopardizes not just where you live but also your entire financial livelihood isn't the worst thing in the world. And even if that opportunity would have been profitable, there will be others. You don't have to time the housing market perfectly.

So if you're not ready to buy yet, don't fret. Get your financial house in order, and then start shopping. And for those of you who already have your ducks in a row, get ready. Your dream is about to come true.