As we head into the New Year, many of you may be planning to take the leap and finally buy your first home. Homeownership is a rewarding experience, and also one of the largest investments you’re likely to ever make. If your New Year’s resolution is buying a home, I’ve put together a primer guide that will help you along the way.
Make Sure You’re Ready
Buying a home is a big commitment, and one that should be carefully considered. Before you even start looking, make sure you ask yourself the following questions:
- Is my job stable enough to allow for buying a home?
- Do I really want to commit to living here for the next 5-10 years?
- Am I prepared for the maintenance and work that comes with homeownership?
If you can answer “yes” to all of these questions, you’re ready to start your search!
Create a List of Dealbreakers and Compromises
There is no such thing as a “perfect house,” and it’s unlikely that you will find a home that meets every single criteria you and your family have in mind. What’s important to distinguish are things you are willing to compromise on, and things that are absolute dealbreakers. Maybe you are willing to forgo having a big back yard if you find a home with a gorgeous finished basement. Maybe you refuse to even attend an open house if the home isn’t in the neighborhood you have your heart set on living in.
Creating a detailed list of things you require from a new home can help you narrow down your search and save time. Spend a good amount of time thinking about what is most important to you in a new home, and stick to it.
Set a Price Range
There are many different expenses that go into buying a home, and these costs need to be considered. Once you’re ready to start looking for a home, you need to figure out exactly how much you can afford. This will help your realtor work with you to find a home that is within your budget, so you can avoid falling in love with a home that is out of your price range.
Get Your Paperwork in Order
The process of applying for a home loan requires a considerable amount of paperwork. To get the process rolling quickly, you’ll want to get some essential documents in order. You will need proof of employment from pay stubs, as well as copies of the past 2 years W2 forms. If you are self-employed, you will need your 1040 tax returns. You should also prepare bank account and investment statements form the past 30 days, cancelled checks from the past 12 months showing you have consistently paid rent on time, and the contact information for your landlords from the past 2 years. Having this paperwork available will get you off to a smooth start.
Get Preapproved Early
Before you even set foot in an open house, make sure to get preapproved for a mortgage. This could help you avoid missing out on your dream home because you didn’t get preapproved in time. Also, many sellers won’t even entertain an offer from someone who hasn’t been prequalified, so it is in your best interest to take care of this step early.
Find the Right Realtor
Buying a home requires support from an experienced realtor. We’re the ones on the front line, helping you find the perfect home for you and overseeing the purchase from start to finish. As the #1 realtor in Encinitas, I can help you prepare for homeownership, and make the process as painless as possible.