How to get your finances in order for a first-time homebuyer
Author: Angela Scott-Briggs
So you're ready to buy your first home? Do you know what that entails financially? Buying a home is exciting, and it can be a significant investment, but the process might seem daunting at times. You need to get all of your finances in order before making an offer on a house so that you don't face any surprises down the road. In this blog post, we'll talk about how to get your finances for buying your first home! The key to success in this process is preparation.
Do your research
There are many steps involved in the process of buying a house. You need to get your finances and credit reports into top shape before you start looking at homes, as well as research average home prices and interest rates for mortgages. Be sure to meet with an experienced real estate agent who can walk you through all the steps towards financing a property purchase.
Make a budget
Creating a budget for your first home is one of the most critical steps in buying. You'll need to know what you can afford monthly as well as how much money you have saved up for a down payment on the house and any other fees associated with purchasing. Be sure that these numbers align with what the bank is telling you and that your calculations are accurate. If they aren't, or if for any reason it doesn't look like buying a house will be possible for you at this time, then don't go through with the purchase!
It is also vital that the numbers work out to afford to have a big enough house for your family. If you are buying with someone else, then this means making sure both of your incomes can afford the mortgage payment and other costs associated with owning a home.
Have your paperwork in order
A first-time homebuyer must be financially prepared for the entire process. There are specific documents that need to be provided, and it is helpful if you have all of your financials in order before applying for a mortgage loan. In other words, it is best to get your finances in order before you take out a home loan.
Start by gathering all of your information and include: pay stubs from the previous year (or two), interest rate on any loans outstanding, monthly income and expenses list including credit cards or debts that need to be repaid, tax returns for the past two years.
If you are self-employed, you will need to provide your bookkeeping records covering at least one year's activity. If it has been a while since you last filed taxes, see if an extension is available so that all of this information can be provided in time.
Having a home is one of the essential things in life. There's nothing better than going through your day knowing that you have a place to come back to and call your own. If this has been on your bucket list, then now might be the perfect time for you to get started!