While research says that 1 in 3 Americans are reduced to tears while trying to buy their first home, there are ways to make this whole process much less stressful and less painful.
Buying your first home (and even your second home for that matter.) will indeed take a lot of time. So much time that just trying to gather the paperwork and documents needed for financing will be a major pain! Prepare to be up late, biting your nails, and pulling your hair out of your head. However, there are ways to relieve your stress and anxiety.
Preparing For Your New Adventure
Everyone has a dream house even though not many of us can really attain that dream house, you can get close to it. Before venturing out and finding a real estate agent to start showing you random houses, try making a list of what you would like to have in your dream house. This way the agent can start knocking houses out that they think you’re not going to be interested in. You might have a few ideas that you absolutely have to have in your house for instance; 2 bathrooms, detached garage, or maybe the biggest kitchen possible. Keep those on your “must have” list. You could create an additional list with things you would love to have but would still consider even if they’re not included. (Keep in mind that this is probably the biggest purchase in your lifetime and you’re in it for the long haul. Don’t cut too many of your “must haves” out!)
Getting approved for financing can be a real drag. You’re probably going to be playing phone tag for days or even weeks. They’re going to request paperwork you forgot even existed and you’re going to have to do real annoying things like call your bank and ask for the last 2 years worth of bank statements or dig through cardboard boxes to find pay stubs or tax returns. When you think you’ve gathered everything the mortgage company needs, they’re going to call or email and say they need 2 more year’s worth of bank statements and tax returns and your 3rd grade report card to prove your existence. (I’m kidding about the report card of course! Although, it wouldn’t surprise me!)
Take some time before starting the whole home buying process and find the basic documents and paperwork you will need. If you aren’t already filing and keeping records from everything and anything, start. I’ve learned more than once that keeping documents forever is extremely important for many reasons. Make copies of everything, put all of it into a nice folder and just spend a little time each day or week, finding everything you will need. This way, when you think you have everything, you can call your mortgage company of choice for a pre-approval and offer to scan or fax everything right away. What kinds of paperwork should you start collecting?
1) Bank statements
2) Debt
3) Investment statements
4) Tax returns
5) Proof of citizenship/residence (Birth certificate, passports, state ID, drivers license, social security card.)
6) Pay stubs (or profit and loss statements, 1099 for self-employed..
You’re Pre-Approved So, Now What?
If you haven’t already found a reputable real estate agent, now would be a great time to do some research! Start by asking your friends and family, posting on Facebook, and reading online reviews about real estate agents who are local to wherever you’re house shopping.
You’re going to need some cash down so hopefully you either already knew this and have been saving or you have a ton of cash lying around that you can grab! The mortgage company and real estate agent will help you figure out what you need down. If you’re lucky, you can find a seller who is offering to help or cover closing costs! (Typically 3.5% down for an FHA loan and 20% for a conventional mortgage.) The 20% can be lower but you should discuss this with your mortgage company and real estate agent to determine what’s best for you!
The actual shopping experience may seem like it takes forever or maybe it doesn’t take more than a week. You could luck out and find your dream house or almost dream house immediately and you may just have to deal with making your offer and waiting to hear back from the seller. One of the most important steps in buying a home and doing everything you can to make sure you’re not investing in a money pit comes next.
Inspections
Depending on the property you may need more than 1 initial inspection. Finding professionals who are reliable and trustworthy may be yet another stressful experience. You can learn more about what happens during a home inspection here.
You should expect to pay at least between $200-400 for a home inspection however, depending on your mortgage company, the type of property you are buying and any notes that your appraiser may have added. One thing is for certain, a 2nd opinion is always a good thing. The seller may say something like, “Oh, no worries, I just had the roof inspected and it’s all good.” or “We recently had a termite inspection done so, you won’t have to worry about that!” It may seem like they are telling the truth and maybe they are! But, hiring professionals to give you peace of mind is probably a very wise idea.
In my experience, one of the most expensive repairs was a roof replacement. We purchased our house with the understanding that the roof would “be good for at least 15 more years” and when we closed on the house, we were given an estimate and a receipt that the sellers had paid for a local roofer to come to patch the roof when spring came around. So, we had the roof patched when the local roofer came by and then again a year later and a couple of years later and then we found out that the entire thing needed to be replaced and as soon as possible. This was our mistake because had we contacted a professional to inspect the roof, we may have had some wiggle room when it came to the price of the house. You can rely on the pros like, Westchase Roofing, to come evaluate and inspect your roof and let you know what your options are. This could save you a great deal of money in the long run!
If you have any other ideas or want to share your experience for first-time homebuyers, please leave a comment below!
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