It’s been a month and a half since I moved to our new home and just to look back to all the paperwork that needed to be done previous to the closing date I feel stressed again. I am relieved this mess is done but as I recall the days we started to look for a house, I know there are some things that I could have done differently that could have saved me a lot of time and stress. So I decided to share with you a list of things to do when you are thinking about buying a house. Here they are:
- Start building your credit at least a year ahead. I know it sounds like a lot of time, but if you get a good credit score, the mortgage companies are more likely to approve you, give you a bigger loan and also a better interest rate, which is translated on saving money every month til your mortgage is payed.
- Invest in a home buying course. If you have no idea where to look first, invest in a home buyers course, like the ones that are required to obtain a government insured loan. They are well worthy and give you tons of information.
- Save money, save money, save money. For the earnest money, for the downpayment, for the closing costs, for the moving, for contracting utilities, you get the point.
- Search for information about the downpayment assistance programs. There are organizations that at the begining of the year have a budget to help first time home buyers. You have to meet certain criteria, but you can get free money for your downpayment!
- Get paperwork from your student loan. If you are still paying your student loan, contact the ones you are paying and get paperwork about your garnishments, the amount you pay monthly, the total amount owed, etc. The bank will want to know this information.
- Set a mortgage station somewhere in your current residence. Take the time to download your bank statements from the last three months previous to contacting a mortgage company. You will also need your W-2 form from the last two years, a copy of your earnings statement from the last three months, ID and social security number. Put all these paperwork in a folder and have a scanner-printer ready for whenever they ask you to send paperwork, usually they accept emails but some will ask you to send the information via fax for security purposes.
- Get pre-approved by at least two mortgage companies. I recommend this because sometimes they can beat the first offer with a better interest rate, but remember they do hard inquiries on your credit and that can lower your credit score, so if you have a low credit score, make sure that you will actually be getting a better interest rate before allowing them to do the credit score inquiry. Always read the fine print before signing any paper, remember to compare rates with the same loan conditions.
- Make sure your realtor is working to meet your needs. My first realtor was recomended at work and she worked well, but she wanted us to bid for crappy houses that we didn’t liked, saying that’s what our budget could afford. When she went on vacation, I found another realtor that showed me houses that were in my budget and that were more likely to fill my needs, and he also recommended me the mortgage lender I ended up signing with, so long story short, make sure your realtor is working for you. Sometimes realtors just work with one mortgage lender, so make sure that your realtor is suggesting the best option.
Well, that’s pretty much what you will need to do to start your mortgage process. Contact your mortgage loan officer for information. I contacted four different companies and at the end I signed with the third one. My husband’s credit score was impacted by the inquiries but we still got a good deal with his good credit score.
If you have any questions, comment below and I will get back to you later. If you liked this post, share it with your friends!