Contrary to popular belief, the home buying process doesn’t start with downloading the Zillow app and selecting your top 5 properties. There’s lot prep work that should go into the home buying process to ensure a successful transaction. You may be surprised to see that the majority of the prep work are things you can begin doing right now! Check out the below 5 ways to prepare for your home ownership journey:
Conduct a Personal Assessment: Home ownership isn't for everyone! It may not be conducive for your career, location, or personal aspirations. First things first is to conduct a personal assessment of where you want to live, how long you plan to be in the area, what amenities you want in your property, and your personal finances.
Determine How Much You Can Afford: Assess your monthly incomes versus your monthly expenses to determine what your mortgage payments should be comfortably. You can utilize mortgage calculators online to ensure that your housing payments are under 30% of your gross monthly income.
Manage Your Credit: Getting pre-qualified for a mortgage loan requires having a good credit score. Use resources such as Credit Sesame, Credit Karma, or Annualcreditreport.com to check your credit score and ensure there are no errors on your credit report. If you're looking to buy a home within the next 3 to 6 months, pay down your credit card balances and try to stop using them 2 months before applying for a mortgage.
Save, Save & Save Some More: There are a lot of expenses related to the home buying process. Some of the biggest expenses are as followed: down payment, closing costs, home inspection fee, appraisal fee, title insurance, and homeowners insurance
Consolidate Your Documentation: During the pre-qualification and approval process, a loan officer will require a LOT of documentation from you. The quicker you can locate these items, the better. Typically, you'll have to provide proof of employment, proof of income (pay stubs), W2's, the last 2 months of your bank statements, tax returns from the past 2 years, retirement account statements, and your social security number.
Really take some time to think through steps 1 & 2. Once you have your answer, dedicate a solid 3-6 months working on steps 3 & 4. The more time you have to save and improve your credit, the more buying power you’ll have. Step 5 should take you no more than a few days to achieve. More than anything, you’ll want to know how to access those documents once requested.
Outside of these steps, be sure to subscribe to our YouTube channel, Ms. Young Homeowner, to learn more about the home buying process and hear from everyday millennial homeowners! Follow us on Instagram and Facebook @MsYoungHomeowner and check out our website, www.msyounghomeowner.com, for more updates!