10 Tips For Buying a Home The Smooth + Easy Way
Is buying a house ever really easy? Not really, especially when you have no clue how the process works or what to expect. The whole thing could be quite daunting and unpredictable, and you’re not alone if you’ve considered just renting instead. If that’s you, fear no more.
I went into it completely oblivious but am so thrilled to say that our entire process was only 63 days! That was from deciding it was time to contact a mortgage company to closing on our home. While it was stressful (as any home buying experience will be), it was also quick and pretty simple.
Here is exactly what we did to ensure an easy home-Buying process:
1. Act fast.
You’ll be asked to provide a series of documents from the last three years including W-2’s, tax returns, employment history, pay stubs, education, bank statements, etc. Act fast and have those documents sent to your loan officer the same day they request it (and if possible, before their office closes). This has been our number 1 advantage. The reason why this is so important is because when they ask for it, they are ready to review it, so if you wait, that opportunity will likely pass, pushing your file back inside their desk and probably left to sit for a couple days. That might not seem like a big deal, but that could result in a delay for closing, and that’s obviously not the goal. Be organized, have your documents available and send them asap. Which leads me to the next tip...
2. Be organized.
Save yourself a huge headache by having easy access to your files. Maybe you save everything digitally like tax returns or pay stubs, or maybe you save everything in a filing cabinet. Whatever you do, make sure you’re actually doing it. If you feel overwhelmed trying to search for these things, it’s probably because you haven’t figured out the best system yet. Organization is key! It’s what makes acting fast possible.
3. Know your options when you make an offer.
Say a house is on the market and listed for $175,000. You place an offer for $170,00 and it’s accepted...great! Except it’s not so great…because you didn’t negotiate closing costs or warranty. A better offer would probably be $170,000 plus a $2,000 credit toward closing, or $175,000 and the seller pays all closing costs plus 1 year home warranty. You might not be so lucky to get both, but it’s worth a shot asking when you make your offer. Also know that your realtor is there to advise you and help you get the best deal.
4. Save money ahead of time.
This one might seem obvious, but that’s because it’s really important. If you get approved for a conventional loan, you’re looking at 20% down payment cost alone (conventionally...there are ways around this, but I don’t have enough knowledge to talk about it). Of course there are FHA loans that require as little as 3.5%, but either way, it’s a good chunk of change that you’ll be expected to cover. There are also many different fees you’ll have to pay such as for your lawyer, inspection, appraisal, application, etc. Ask your loan officer for a good faith estimate, or a list of all your estimated costs, so you will know exactly what to expect.
5. Leave your bank accounts alone.
When you apply for a home loan, your lender wants to see that you’re smart with your money and will be a reliable borrower. So whatever funds you have in your account, leave them there. Obviously you have bills to pay -- that’s not what I’m talking about. I’m talking about the unnecessary spending like on fast food or the guilty Target trips we all like to make. Those things are OK once in awhile, but try to pay with cash and budget!
6. Don’t do anything that could cost you your loan.
A big mistake people make when buying a house is buying furniture before they close. It’s a big cost that often requires financing which does not look good in the eyes of your lender. Don’t open up any credit cards, change jobs, decrease your hours at work, or make any big purchases. The goal is to show good job security along with low, consistent spending.
7. Find the person you connect with most.
Each person in your home buying team has a different role, but they all work together to reach the same goal -- closing the deal. You’ll find that the process is naturally a slow one, so find the person you connect with most who seems the most able to speed things up. And put pressure on them! They’ll in turn put pressure on their team to close the deal.
8. Take the inspection and appraisal seriously.
And not just because they cost you around $1,000, but because they tell you everything you need to know about your home’s condition and value. Remember that you are making a huge financial decision and long-term commitment. If you’re not happy with the results of your inspection, ask the sellers for a credit toward repairs. But also be mindful of any major problems that could end up costing you tons of money, like foundation or plumbing issues. Sometimes it’s better to walk away from a home before committing to a money pit.
9. Be wise with your budget.
Just because you’re approved for, say $220,000, doesn’t mean you have to look for homes only in that price range. Sure, you might like them better, but think long term. Will you be comfortable with your mortgage payment and taxes? How about insurance? I generally like to think $20,000 below pre-approval is a smarter budget to aim for, but that’s just me… Ultimately, you’re the only one who can decide what you can afford.
10. Don’t be afraid to ask questions.
If you’re totally confused by the process, ask for clarification. Your team is there to help you, so never feel stupid asking questions. I asked hundreds and I’m glad I did. Also remember that if you don’t ask, the answer will always be no! (A motto I’m learning to live by in my adulthood)
Lastly: relax and breathe. Buying a house is a stressful experience, and you’re bound to feel pressured by it all. So during this time of wishing it all was over with, remember to breathe and take it one day at a time. Also trust that your team is working their best to get you the best deal and the smoothest closing possible.
It will all be so worth it!
What tips can you share? I’d love to know! ↓↓↓
Enjoy this post?
You should sign up. There's a lot more like it comin'.