By Sam Wax
Ready to buy a home? Home buying is an exciting process, and some may find it intimidating. Many documents, countless bullet points to address, and not a ton of time. While income is the primary focus for lenders, it’s not the only factor in the process.
To prepare for your home-buying journey, here are some things to look out for and what to do if any of these situations arise.
- Income
As mentioned earlier, income is the primary focus for lenders in the home-buying process. You are likely to have a smoother journey if stability is part of your repertoire. Stability provides some insurance that you’ll be able to make your monthly payments on time. However, things can change in the blink of an eye, including losing your job or getting a promotion. Going from the employed to self-employed can also raise red flags. Some of these changes are unavoidable, and you need to have a pivot.
If you have a sudden change in position, make sure your paperwork from your last destination is in order. If the way you get paid changes, such as going from a W-2 to a 1099, ensure your lender is aware of the change and provide them with the necessary documents you completed during the shift.
- Assets
Sometimes, when people get close to finalizing the home-buying process, they can forget the most essential part of buying their home: the first payment. Make sure that you have enough money available to a) qualify and b) make these payments. Don’t create problems for yourself: before that first payment is due, the money you saw throughout the entire process is gone to other expenses like new furniture, Utilities, and other necessities. While these things are essential for comfortable living, they’re not as important as your first payment, and getting them in advance could affect your qualification.
- Credit Score Impacts
One of the most critical steps in the home-buying process is when the lender checks your credit score. This check can include the amount of money owed on your credit card, requests from collection agencies, late payments, and how many times you’ve recently inquired about your credit. Usage rates, in particular, account for about 30% of your FICO credit score. The more often a person checks their credit score, the more skeptical lenders become about their finances and reliability.
The first time you even think about buying a house, check your credit score to make sure everything looks accurate. Inaccuracies can occur; make sure to dispute them whenever you notice them. Pay all your outstanding debts and monthly credit card statements on time, as ideal credit card usage is typically under 30%.
- Collateral
Another vital part of your home-buying journey is making sure that all necessary inspections take place and that your house is insured. Skipping inspections of the roof, foundation, wells, septic tanks, and other areas can cause severe delays in your home-buying process. Similarly, getting house insurance can save you both time and money initially, and if something happens to your house. These two steps are essential for getting the green light to close.
Conclusion
All of this stuff may seem scary: it’s a lot to process. But following these steps will make your home-buying journey much smoother in the long run and allow companies like My Easy Mortgage to help you achieve your dream home. Your biggest takeaway should be that preparation is the most vital aspect of your journey, and the more prep you do, the fewer obstacles you’ll face.
Whether you are a first-time buyer or looking to refinance, My Easy Mortgage, a reputable mortgage broker located at 2405 Creel Lane, STE 102, Wesley Chapel, FL 33544, and 16703 Early Riser Ave, Suite 266, Land O’Lakes, FL 34638, has a team of experienced professionals who can guide you through the process. Contact them at (813) 513-9846 to discuss your mortgage needs.