There is no doubt that the process of buying a home is stressful. You have to juggle your wants, your needs, your funds, and your time. With everything that goes into this one purchase, you probably feel overwhelmed.
So, here are a few tips that will hopefully lessen some of the stress during this hectic process:
Figure out the Math
One of the most stressful aspects about buying a home is the issue of money. One way to take away the stress is to figure out your range ahead of time. The easiest way to do this is to get a mortgage pre-approval. This shows you’ve passed the credit check and lists how much you can afford.
However, there are more expenses involved than some think. There’s the typical principal, interest, insurance, and taxes to consider, but there’s also the down payment, closing cost, moving cost, maintenance, upgrades, utilities, Homeowners Association dues, and other miscellaneous costs.
Make a List
Making a list is practically a necessity. It takes the emotional aspect out of your choice and narrows down your search. Create a checklist that includes what you absolutely have to have; things that are nice, but not necessities; and deal breakers. Make sure when creating your list to also take the neighborhood into consideration, such as schools, public transportation, and neighbors. You should also leave a section for notes.
Take a Camera (Restrictions Apply)
Unless you are very lucky and find the perfect house immediately, you’ll be looking at several places. At some point, you may confuse houses. Eliminate the confusion by bringing your camera. While you’re being shown the house, take pictures of details that you like and dislike. It will help you separate details from different houses that you’ve viewed and is a great comparison tool.
However, this is a touchy subject. Before you go around taking pictures, make sure that you obtain permission from both your seller and your agent (preferably in writing).
Get Documents in Order Early
As soon as you start looking for a house, you should also start getting your documents together. There are a lot of documents and you don’t want to be scrambling last minute to find them all.
Lenders typically request the last two years’ W-2s; two of your most recent, consecutive pay stubs; the last two months’ bank statements for all financial accounts (all pages included, even the blank ones); signed personal and business tax returns (all pages included, even the blank ones); if self-employed, a copy of your most recently quarterly or year-to-date profit/loss statement; and a copy of the signed Purchase and Sales agreement. On top of all that, they will also want to know how much cash you can put down and how much house you feel you can afford.
They also may want you to provide documents of your total monthly debt payments, your credit score and any credit issues in the past few years, and the source of any big deposits (e.g., your parents gave you money for a down payment).
Know Your Rights
Make sure to protect yourself from unscrupulous practices. When it comes to signing for your home, know your rights, such as the Real Estate Settlement Procedures Act (RESPA) and Borrower's Rights. Also, make sure to educate yourself on predatory lending so that you’re not exploited.
Take a Breath
You’re probably overwhelmed. So make sure that when things get to be too much, you take a step back from the situation and breathe.
Hopefully these tips will help you to do just that, breathe a little easier. You can visit riafcu.com/homes for information on ways R.I.A. Federal Credit Union is here to help!