Last year my husband and I brought our first home. It was a lengthy and painstaking process. What made it more difficult that it needed to be was the fact that were we going through the process on our own with much assistance from anyone. We aren’t rich and we don’t have rich families, and with one income, saving was almost impossible for us, so we took out time to slowly achieve a goal we made for ourselves for 2018.
Closing on our home was one of the highlights of our lives. It made 2018 a year of growth and success for us. If you’re planning on purchasing a home soon, here are six steps to homeownership that will hopefully help you navigate the process smoothly.
Check Your Credit
The first set to getting started with purchasing a home is getting an up to date copy of your credit report. You can easily check your score on sites like Credit Karma and Credit Sesame, however for this process you need to get a detailed look at your credit profile. You can obtain a copy of Free Annual Credit Report. Get your report from all three major credit bureaus since each one could contain different information. Make sure you check for any error or wrong information on your report, and contact the credit bureau if anything needs to be changed.
Pay Off Debts
Lenders use the amount of debt you have when factoring the amount your are approved for when shopping for your home. Pay off a much of your debt as possible to get your debt to income ratio lower. It could end up saving you thousands of dollars over the life of your loan in interest and allow you to be approved for more funds.
Find the Right Lender
There are so many different paths to homeownership. Finding the right lender could mean you end up getting to home to being outright denied when you’re close to the finish line. Be sure to do your research and start with financial institutions you already have a relationship with in terms of your everyday banking. Companies like The Associates Home Loan of Florida, offer a variety of loan options for different credit profiles. You want to start your search with a lender that has flexible options to give your the best loan options possible.
Back in the day you could just contact a realtor and start looking for a home, now most realtors want to know you are pre-approved with a lender before beginning the process of showing you homes. Getting pre-approved is a much more detailed process than getting a pre-qualification. For pre-approval the lender needs to verify our assets, income, prior year taxes, and check your credit score. Pre-approvals does require a hard pull of your credit, however once approved it is valid for 90 days as long as there are no major changes to your credit profile and financial situation.
Find the Right Realtor
Of all the steps I mentioned above, this is one of the most important ones for me. Finding the right realtor can save you money. They will work hard to help you get everything you want in our dream home and for the right price. Make sure your realtor is working for you and doing all that they can to get you the best price possible on the purchase of you new home. Interview with a few realtors if you aren’t sure which one to pick, narrow your choices based on experience, especially in the area you are planning to purchase your new home. You’ll be surprised even in the same state, different counties may have separate governing laws in regards to purchasing a home.
Find Your New Home
Once you start the process of looking for your dream home, be sure to enter with an open mind. Don’t get caught up on one things because you could end up missing out on something great. Create lists of things you must have in your new home, things you would like to have, and things that would be nice to have but if not, it’s not a deal breaker. Keep notes of all the homes you see, especially if you’re viewing several in a short space of time. Record video if you have to, just so you remember them all individually. Once you have narrowed it down to the house you want to purchase, take to your realtor about making an offer. Depending on how much activity the house already has, make sure your offer is strong and stands out from the beginning. Once your offer is accepted make sure you’re talking to your realtor about the timeline of everything that needs to happen before closing. It’s a long list and so much can happen between having an accepted offer to closing. However if everything goes as planned you’re be moving into your new home before you know it.
Purchasing a home is a huge undertaking, but it is possible if you plan and make sure you prepare for anything. Keep detailed records of the whole process while you are going through it. Most importantly make sure you gather all your financial paperwork when finding a lender, the right loan officer and realtor will make the process painless and rewarding.