Looking to move in 2019? Before you get too far into the process, consider your finances. Do you have enough savings to purchase a home or will you need to tap into a retirement account? Can you afford a monthly mortgage payment on top of your other bills? If you’re not sure, that’s okay. Start by completing the application to be pre-qualified. That will give you a sense of what you can afford.
Following that, contemplate your comfort level for monthly payments and cash-to-close for the new home (i.e. down payment, closing costs, taxes, insurance, etc.). Evaluate your monthly costs and fixed income to map out what you can afford and then create a monthly budget that you would like to stay within.
Maybe you need more time to save money or raise your credit score. If you’re not ready to buy in early 2019, do not fret. Here are five simple steps that you can take today to prepare for the future:
1.) Improve (And Maintain) Your Credit Score
Credit is like a muscle. The more you work it, the better it performs (within moderation). Having good credit is important when buying a home. A higher score reflects well with lenders. More importantly, higher scores get you the lowest rates, which makes the home more affordable. To improve your score, make payments on time and don’t miss any payments on current debts. Do not open up any new debts either, such as purchasing a car loan, before consulting with a loan officer.
2.) Consult a Lender
The sooner you visit a loan officer, the faster you’ll know where you stand on getting a mortgage and the steps you need to take to improve your situation. Finding the right lender to review your financials and secure your loan is critical because you’re establishing a relationship that should last for years to come. I always recommend finding someone you can trust and that you feel comfortable with. I strive to be that person for every client, as I guide them through every step of the home-buying process and answer any questions they have along the way.
3.) Visit Open Houses
Explore neighborhoods and open houses to get a feeling for what you like and dislike. Knowing the location, size of the home, and your preferred features can help narrow down your options throughout the home-search process.
4.) Interview Real Estate Agents
At each open house, you will also meet realtors: another important relationship to secure. Open houses are a great way to network and find the right connection. Not every real estate agent is a fit for everyone. As an experienced loan officer, I can recommend local realtors that I have frequently worked with that I feel would suit your needs and exceed your expectations.
5.) Collect the Necessary Paperwork
Collecting the following paperwork in advance will eliminate stress and save you time when you’re finally ready to put in an offer!
- Pay Stubs: Save your last pay stub of the year and provide your four most recent ones
- W-2’s & 1099’s: You’ll need these from 2017 and 2018
- Tax Returns: You’ll also need business and personal tax returns for 2017 and 2018
- Bank Statements: You’ll need these for all of your bank accounts for the two most recent months (include all pages)
- A Copy of Your Driver’s License: Make sure it is current and not expired
- Work Offer Letters: If you recently started/switched jobs, you’ll need to provide work offer letters
How I Can Help
Ultimately, as a loan officer with the Kelly Mortgage Team, it’s my job to listen and to find the best financial solution for you and your lifestyle. By exploring various types of mortgages, we can find a home loan that works for your unique situation. Contact me today if you have any questions, or if you’re ready to get started with buying a home in 2019!