It’s time to put down roots and buy your very first home here in Tucson. What an exciting adventure! The path to homeownership is not always a smooth road, but it also isn’t one that's hard to navigate if you have the right guidance.
In Part One of this blog, I discussed the first steps toward setting yourself and your family up for a smooth home buying process. Be sure to get your credit in order, including building a great credit score and keeping track of your credit history. Next, with your larger home budget in mind, find your down payment price point – the number that you can afford to put down on your home without jeopardizing your financial stability. Third, get an estimate of what your month-to-month costs will be so you can see how much you can afford to pay for a monthly mortgage including insurance and taxes.
There are a few other ways to put yourself in the best position to make buying a home as simple and stress-free as possible.
Get Your Documents Organized
When you meet with a mortgage lender, they will need to look over your financial documents and other records to see if you are a suitable candidate for a home loan. There are several documents that you will need to have available for your lender’s perusal including:
W-2 forms for the previous two years for anyone in your home whose name will appear on the mortgage loan and who will be responsible for making monthly payments.
All recent pay stubs for verification of income for the previous six months. If you own a business, your lender will want to see your 1099 profit and loss statements from the past two years. A list of your cumulative debts, including student and auto loans, credit card debt, child support payments, and any additional monthly debts you may have. In addition to the debt you owe, your lender will also want to know what your minimum monthly payments are.
A list of all assets including bank and mutual fund statements, home and auto titles, and records of investments or additional sources of income.
Your two most recent federal tax returns, and potentially some from previous years as well.
Have all of these documents, as well any canceled checks for rent or mortgage payments that you may have, so they can do a full financial workup and learn your viability as a financially sound candidate for a mortgage.
Get Pre-Approved by Lenders
When you can get yourself pre-approved for a loan from multiple sources, including banks and credit unions, it will put you in the position of power to negotiate the best rates available for your loan. When shopping around for a mortgage lender, however, you run the risk of your credit score getting dinged for multiple credit checks. To avoid this, be sure to schedule your evaluations with lenders within the same month to prevent a credit score decrease.
Find the Right Realtor
No one wants to help you get into a great home more than a realtor does. Though every real estate agent will be happy to put you in a home, not all realtors are created equal. You need to find a realtor who is dedicated to finding you the home that suits all of your needs and offers the fewest compromises on your wants, while also looking out for your best interests during the negotiation process.
Having the right person representing you can make a world of difference in the terms, costs, and conditions of buying your new home. A great realtor will be upfront with you about the reality of your search, allowing for more detailed search parameters so that you can find the exact home you’ve been looking for. They will also be a strong negotiator at the table and ensure that you get the deal that you deserve on your home offer.
Do not settle for just any real estate agent. You need someone who will have your best interests at heart for days and months ahead. Do your research and find a highly recommended agent with a history of excellence in the neighborhoods you are interested in buying a home in.
Organize Yourself for House Hunting
As previously mentioned, finding a home can take days or can take months. To cut back on the time that you will have to spend searching for that perfect house, get yourself organized for the search. Keep a binder or folder of your needs and wants in a home, including neighborhoods, schools, community benefits, upgrades, and price ranges per neighborhood.
Carry a travel pack with you when you visit a home that is for sale including a tape measure, notepad, pen, a camera, and a checklist of things that you want to look out for which may be potentially costly down the line. Things like cracks, leaks, fittings, and fixture security, and basic on-site evaluations need to be noted, so you don’t forget them.
Schedule home visits when during daytime hours, and be sure to visit a home you are considering purchasing, at least from the outside, at nighttime as well so you get a feel for the neighborhood at all hours.
Remember to Look at the Positive in Everything
The home buying process is just a means to an end, but that is a reality that we can lose sight of when we just can’t seem to find the right home. Every home that you view will have benefits, so be sure to note the positive aspects of each as well as the negative ones. You may not choose that home in the end, but viewing homes with a positive attitude will go a long way toward reducing your stress during the hunt.