Are you one of those people who worry? A recent client of mine was definitely a worrier. She worried about whether she and her husband could afford a house. She stressed about having a lender look at every aspect of her life. She feared judgement for past money mistakes and for not having a 20 percent down payment. Once she told me she stressed about everything. And she meant it.
At one point, she told me to just forget it, it wasn’t meant to be. This was right in the middle of trying to buy their dream house.
We all get this way at some point in our lives – many of us when it comes to home buying. It’s stressful and it’s scary. By the time the lender has come back for the fourth time asking for more proof of income or questioning how you plan on paying off that last credit card that you accidently maxed out being too generous around the holidays, it’s easy to want to throw in the towel. For my client, it was the lender asking her why they were moving cities instead of staying where they were (which was living with her mother).
Falling prey to life’s stress is easy, but the rewards come from pushing through and not giving up. I told my client to have faith in me for just a little bit longer…and their dream house closed two weeks later. She and her husband now have a home of their own. Their new home has given her the ability to get back into horseback riding and following her writing and sewing passions.
And all because she didn’t fall prey to her worry. And neither should you.
What should really bother you is paying all that money to rent housing that does nothing for you and everything for the landlord. After all, you are paying their mortgage, building up their equity, and even giving them tax breaks, while you throw your hard earned money away. You will never get it back. That’s scary.
So don’t be scared about home ownership. Make 2017 the year where your home ownership dreams become a reality. Are you scared already? It’s understandable. But you made the resolution – now what? If you’ve never bought a home there is a lot to consider. Remember, don’t let that fear devour you! To help, here is a simple guide to ownership to help you keep your New Year’s Resolution.
Check Your Credit. Knowing your score is a great starting point. It will help you know how close you are to getting a mortgage and what you need to address (unpaid debts, big balances, etc.) before actually applying.
Pay Off Debit. Paying off as much debt as you can, especially credit cards, will make it easier to get a loan. Once paid off, do not rack up more debt. Also do not open new lines of credit, including buying a car.
Save For The Down. A 20 percent down will save you money in interest and make you more appealing to lenders, but it’s not necessary. Just know that if you have less, you will may get higher interest and will have to pay mortgage insurance, which will increase the overall cost of your home and thus increase your monthly payment.
Determine How Much House You Can Afford. Do a budget and figure out the top of your price range. It is important to keep this in mind because emotions can sometimes lead you toward something you can’t really afford. While a difference of $10,000 doesn’t make a big impact on your monthly payment, if you start looking $50, $60, $70k over budget, you may end up with a mortgage you can’t pay.
Choose A Realtor. Friend referrals are a great way of finding an agent. Don’t go by just the number of sales a realtor has made; look at their online reviews. Most of all, it’s important to feel a connection with your realtor. You will be discussing very private, personal and emotional matters with them, so a comfortable and trusting relationship is imperative. At the end of the day, your realtor can make or break the deal. So take the time to find a quality one.
Make Your Must Have List. This is a great thing to give your realtor to help them locate your dream home. Don’t forget to include the top of your budget on this list! Remember that you will not find a home with ALL the things you’re looking for so prioritize them. Be realistic about what is offered within your budget.
Speak To A Lender & Get That Loan. Don’t just ask them if you are approved. Ask them about what the interest rates will be doing in the coming months. Could waiting a few weeks save you a bit? Be sure you understand all aspects of the loan you are getting. The more you know, the less stressful you will be – knowledge is confidence, so don’t be afraid to ask questions. And, like your realtor, chose a lender that you trust and whom you feel good about.
Breath deep, overcome your fears and make 2017 the year you finally achieve your dream of home ownership. Have questions? Feel free to contact me, I am happy to be a resource.