There are many things a person can say about buying a home and each person's thoughts and experiences will be different. Here are 5 key things I find to be helpful or things I wish I would have really followed through with, or did better throughout my home-buying and moving experience.
1. Take a Home Buyers Course ~ Do not underestimate the wealth of knowledge being offered at a Home Buyers Course. These courses provide you with information about credit, debt, types of loans, taxes, insurance, closing costs and the closing process. Depending on the organization providing the course, you may also get information regarding home maintenance and the ongoing cost of maintaining your new home. I took a home buyers course twice, once at least 2 years before I bought my home, but didn't take the information seriously. My credit improved and I also reduced my debt, which in turn improved my credit score; however, my savings declined. ***Please take heed to the information you receive at these courses, and take action so when the time comes to buy your home, you will be well prepared.
2. Do Your Homework When Finding a Real Estate Agent ~ Have a set of criteria regarding what you are looking for in a Real Estate Agent. Do not look at superficial qualities, such as race, appearance, location of real estate office, or even age. Instead focus on how knowledgeable the agent is about the market where you would like to live. Also, make sure you're real estate agent understand what you wants and is not trying to sell you what he/she wants. If you want to look at condos in the suburbs, your real estate agent should not be taking you to look at brick bungalows in the city. If they constantly miss the mark with properties they show you, it may be time for a new agent, which is what I had to do. My first real estate agent hardly ever contacted me with property's to look at and when she did, they were not what I was looking for. I just stopped contacting her about looking at properties and she never called me again. I knew then she wasn't the one.
3. Save Money ~ I regret not having more money in savings when the purchase actually went through. I qualified for a grant so I had to put down very little money and I think that's what got me out of savings mode... knowing I didn't have to have much for a down payment, and that my closing costs were covered. In fact, I even received a little money back from closing because of the grant. Yet in still, there is so much that needs to be done when you are purchasing a home and moving. You need to have money saved so that you can cover all these expenses without having to utilize your pay check at the time of closing and moving. Your home buyer course should get you into the habit of saving for the big closing day, but you have to really be set in your mind that you will have the money for a decent down payment and closing cost, even if you don't need it. Because trust me, sooner or later, you will need that money for your house in some capacity. Save yourself the headache of having to go further into debt in order to fix things or decorate your home. I advise you to start saving early for your home and keep on saving even after you move in. It can save you thousands!!!!
4. Prepare Your Mortgage Documents Before You Apply for the Loan ~ The home buyer course should give you a good idea of what you need to officially apply for your loan after you have found your home. This will be much different than the pre-approval process and depending on the type of loan, can be much more intensive. Each person's situation is different, however, HERE is an overview of most of the documents you will need when you meet with your Loan Officer to apply for the loan:
Income Verification ~ Can be pay stubs, self-employment accounting and tax records, pension or social security award letters, etc... Whatever your income is and no matter the source, you will need to provide something to your loan officer to verify what you earn.
Debt ~ Credit cards, car notes, student loans, personal loans, other mortgages, and any and all other kinds of debt you have that you pay. Even if your student loans are in deferral you will still need to provide that information.
Assets ~ This is kind of tricky because some of your debts may also be considered assets, such as a car and house. Other assets include, checking and savings accounts (yes, they do check these), 401 K plans and other retirements accounts, CD's, stock, trust funds and more.
Vitals ~ Identification such as a driver's license or state ID card, social security card
Work History ~ This can especially important for certain types of loans. Have at least your work history prepared with addresses and phone numbers as well as a contact person for your previous employers for the past 5 years. For the self-employed people, your tax returns for the past 5 years may suffice as proof of work history.
Address History ~ You will also have to give your lender information regarding where you resided for the past 5 years, could be more or less years depending on the lender. If you have lived with a relative, you will have to report that as well.
Tax Returns ~ You will need your tax returns for the past two years. Depending on the lending institution, you may need an actual signed copy of your returns as opposed to getting a transcript from the IRS.
Housing Information ~ You will need to have the purchase agreement with you for the house you are buying. Once your offer is accepted, you and the seller will sign the purchase agreement. This states what the terms of your agreement are and information about closing. You may not have to actually take this with you; the seller agent may fax it or send it to your lender. Either way, it will be needed.
Addressing Discrepancies ~ You may also have to submit a written statement to your lender to clear up and inconsistencies or gaps in your history. Everything has to line up when you complete your application, so be prepared to handle any question that may arise regarding your pay, work history and previous residences.
5. Plan Your Moving Day in Advance ~ Do not wait until the week of your move to start packing!!! Start to schedule your service shut-offs and shut-ons at least two weeks prior. Don't schedule everything on the same day and if at all possible don't try to do everything in one day. Depending on how far you are moving, you may need to pack an overnight bag that has everything in it you will need for the next day, such as a change of clothes, hygiene products, and of course your cell phone charger!!! You should also plan eat take out or to dine in at a restaurant for the night of the move. If television is a main source of entertainment for you and your family, plan to have your cable and Internet connected on the day of the move so that you and your family can enjoy some good food and a good movie on the first night in your new home!!!
Lastly, the most important things to remember throughout the whole process are knowledge and preparation. You need to know what to expect so that you can prepare for what is coming up!!! The more knowledgeable you are about the whole process, the more likely you are to stay on top of what is needed at each step. Don't be afraid to slow down or stop if you find things are not going the way they should or if the process is moving too fast and you don't know what is going on. Take some time to make sure you're doing the right thing and to make sure there all information is being presented up front because in the end, no one will be left paying the mortgage (insurance, taxes, utilities, etc... ) but you!