To embark on the journey of home ownership is to experience what historically our county acknowledges as the very core of the American Dream; The largest monetary undertaking most tax paying citizens will ever experience is that of buying a house. Here are the 1 2 3s to getting the keys & unlocking that timeless American Dream.
Number one is a stream of income & while important for pre-approval to look for a home, is the major determinant of what monthly mortgage you can support. Most lending institutions look for at least 24 months of solid job history and the line of work within those 24 months can sometimes be different so long as the income isn’t varied. It is generally advised that your mortgage payment should reserve 28% of your monthly income but the percentage of homeowners where that is the case is lower than we would hope for and that is okay for you personally so long as you can consistently and confidently make your house payment while in a career that supports it. Before you commit to purchasing a home, set yourself up with a great long term supplier of wealth.
Finance is step two, a daunting thought to first time homebuyers, but with planning and patience, you will soon see it as a manageable thing. This financial step has two components within it to establish your buying power. Improving your credit and prepare for the downpayment. With an FHA loan or a VA loan approval is possible with a credit score of 580 but the standard across the board should be 620 or higher. If the debts that keep your score down are complicated and you do not know where to begin there are credit repair resources for you both online or indivual credit repair specialist. Otherwise take the cards with the smallest debts first and pay them off. Negotiate down an affordable payment plan for the remainder. If you have a card that you’ve maintained good history with continue to do so responsibly but one thing is for certain, lenders will always agree, do not ever take on new large debts if your goal is still that great American dream. The same way you don’t put the cart before the horse, don’t put a new ride ahead of the goal of a homeownership.
The other component of step 2 is saving enough for a down payment fund and the sweet, sweet victory in getting approved. First, create a certificate of deposit or CD for short at a credit union or bank with a three-year withhold. That means you can’t take the money out early without costing you, but it will earn interest on whatever you deposit. When you do create this account, call it “Future Home Funds” therein taking the next step you could call manifesting your dream by speaking it into existence.
If you qualify for a conventional loan, you likely need to save 3% of the home price which at 300K is $9,000. If you qualify for an FHA loan the down is 3.5% same house would require a down payment of $10,000. You can apply the same principles to a Townhome for 150K. Now look at your existing budget and trim the fat. As you do, you will notice old subscriptions perhaps or memberships that dent your accounts monthly, determine if they are worth it. Every man or woman has toys that don’t even necessarily bring them joy. So cancel out some of those monthly fees and sell off some stuff that just fills your garage. If you do these things and you are honest with yourself about your spending habits then you’ll be ready to make that phone call to the realtor of your choosing. You’ve done the hard work & this is where the fun really begins.
I will go on to the last step shortly and this one will likely determine your overall experience. I thank you for the time you’ve entrusted me with to receive good information for your real estate endeavors and that leads us here. The foundation to real estate success begins with careful observation followed by calculated action at the right time. A foundation that should largely be entrusted to the real estate agent you hire that doesn’t fit into any algorithm. The real estate agent/home buyer relationship is facing immense potential change. Automation is driving technological advancement, it is even making simple telephone conversations or riding in an elevator appear burdensome. Automation has the power to further isolate people, some of whom are already introverts who need as much as any, a healthy community they feel a belonging. No two age groups communicate the same. From 20-year-old TicTockers Instagram in your 30s or Facebook… you know your age. A new wave of first-time homebuyers of America are gravitating towards using Open-door or Zillow to procure a house because it seems easy right? You have worked this hard to save your money, keep a steady job and yes, even to sell a house without a person to ever meet.
Nobody to text when you have a question about the neighborhood or how the school’s rate or any insurance claims in the home’s history. I am 39, making me young enough to see the appeal, old enough to know better. Here is the truth of the matter from a licensed, certified residential specialist with 8 successful years in the business: Entrust nothing but an actual human, yes only a man or woman in the real estate profession for guidance in the largest investment purchase in your life. With as many variables as there are to a house and its community, the contract, and its legality or all the negotiations that bring escrow to a close. Can they tell you about the the builder? Or if radon exist? Who from the customer service line can help you obtain a road maintenance agreement to get funding? I’ve had to obtain one, and it required walking door to door with a road maintenance agreement stamped and approved at title. Its these examples this new way to do real estate does not have answers for. The same way you don’t want a cyborg to be your psychologist, or a robot to saw at your bones, I don’t want a website on my computer to ever sell you a home.
Spend your energy instead in finding excellent stable representation for your real estate goals going forward. A good realtor is found usually by the kind referral of a friend, or just having a conversation with an agent and just see if they are listening to your needs. If they are a CRS agent as I am that means they did threefold the education and training for the designation of Certified Residential Specialist, and you will almost always receive a higher level of care. You can find reviews of agents on many different sites such as realtor.com, Zillow or yelp. The same way you might shop around for the right doctor it might take a minute to find an agent you mesh with. But I assure you it is worth a call or two. Once you’ve found a real estate agent that you love, over the years you’ll find they become your friend because as you relied on them once to help you achieve your American dream you can most certainly rely on them again.
It is human nature to allow our minds to go wild and make something appear more complicated than it really is. There are whole industries built around our doubt or uncertainty, but it really is as simple as the steps I’ve laid out. Because from here you have done all the hard work you needed to do and it is time to tell your realtor where you want to be as well as the types of homes you’d like to see. If you can then entrust professionals to take the stress out of the process you will have an amazing time buying your first home, yes your first time realizing an American Dream.