What are the First Steps in the Home Buying Process?

Buying a house is the biggest part of the American dream. So many people want to become home owners but they don’t know where to start. Come along with me as I go over some critical first steps in the home buying process.

Know Your situation

Knowing your situation is critical. What do I mean by situation? I mean know your credit, debt, and finances. Access your credit report, most lenders are looking for a 620 or higher. The better your credit, the better your rate can potentially be. Looking at your credit report can give you a good look at your debt as well. Are you carrying a lot of debt? Will any of your debts be resolved in more than 10 payments. Your debt to income is equally as crucial as your credit score. Calculating your debt to income isn’t a task you need to complete (your lender will do this) but be mindful of the debt you have as some of it may need to be paid off. Finances are also important. Keeping your income in mind, how much would you comfortably be able to spend on a mortgage. If you rent, and your monthly rent payment is a comfortable amount consider using that amount. 

Research

Research is the best self help thing you can do. You’ll want to know what areas you want to live in, what type of house you want rather it be a bungalow, colonial style, new construction, etc. You’ll want to consider the school district. Looking up homes in your desired area will give you a heads up on prices, so that it wont come as a shock later. 

Preparation

Preparation is also very important as a first step. Throughout the course of the mortgage process there will be several documents needed and provided back and forth between client and lender. To help prepare for this some common documents are, w2s, tax returns, pay stubs, and bank statements. These documents help the lender assess how much home you can afford.

The home buying process can be stressful, as it’s one of the biggest purchases a person makes in their life. Even though it can be stressful, there is light at the end of the tunnel. Getting your keys to your new home will be well worth it in the end.