If you or someone you know is about to embark on the first time home buying experience, there are some things you should know and be doing now. Follow these simple tips and your home buying process will be a breeze.
Check Your Credit. Check your credit before you get too far into the process. If you’ve made your credit card and other account payments on time, at least no more than 30 days past the due date, your credit report will be just fine. But you have to check to make sure there are no mistakes on your report or someone else is showing up on your report that’s not supposed to be there.
Gather Your Paystubs. You’ll need to get copies of your most recent paystubs covering a 30 day period. Your paystubs should show both a monthly amount and a year-to-date amount.
Get Your W2s. You’ll need to document at least two years of employment. Providing your last two years of W2 statements will do just that. Your W2s will also be reviewed to make sure they match up with your current pay.
Call me. Before you submit a loan application, let’s talk over the phone and answer any questions you have. I’ll also walk you through the process of what needs to be provided and when.
Get Your Prequalification. After our brief conversation, I’ll give you an amount for which you’re qualified. This will be somewhat of a moving target on your end because what your prequalification says and what you’ll ultimately end up borrowing will likely be a little different.
Get Your Bank Statements. Your bank statements will show how much money you have available for your down payment, closing costs and cash reserves. If you’re going to tap into your IRA, which first time buyers are allowed to do, get recent copies of your IRA statements.
Submit Your Application. Even if you don’t have a property picked out, you should still submit your application. I’ll also need to run a credit report. Submitting your application either online or with an in-person visit, will allow me to take the next step and issue your preapproval letter. Sellers want to see this letter when you make an offer.
Get Your Agent. Buying a home isn’t something you should do on your own. You need a real estate agent to help you find the right house for you. Your agent will take your preapproval letter and qualifying amount and start searching for homes that meet your criteria. An agent doesn’t cost you anything at all. The sellers pay all real estate commissions, not you.
Review Your Lease Agreement. When lease agreements expire, they’ll typically change to a month-to-month lease. If your agreement hasn’t expired, you’ll need to know the expiration date. Most lease agreements ask the tenants to give the landlord a 30 day notice of intent to vacate the property.
Enjoy the Ride! I understand there will be a little trepidation about making the transition from a renter to an owner. But remember you’ll be surrounded by professionals both by me, your agent and others. When I issue a preapproval letter it essentially tells you all you need to do is find a home. And that’s the best part so enjoy the ride!