Road to Closing

HEY GUYS!! It is with GREAT pleasure that I can now announce that YA GIRL IS OFFICIALLY A HOMEOWNER!!!

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YAAAAYYYY!!!! This is a huge deal to me for a few reasons.

  • I’m 24 years old
  • I did this allllll by myself. As someone who was raised to wait and do life-changing things with a man..it feels good to say that this is ALL me.
  • This is the start of me setting my son up for success as this is an investment property and will be one of many properties I plan to own.

So now that I’ve got that out the way, I want to bring you guys along my journey. This can seem like an overwhelming process but stay persistent and motivated because the end result will be worth it.

When you start thinking about buying a home, I know it’s easy to get started thinking about what all you want your house to look like. HOWEVER, the most important and beneficial thing you could do is

CREATE A BUDGET

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Plan everything else around that. I know you’ve been to a car dealership or dealt with any type of sales person that tries to show you the nicest of the nice initially and then when you start to talk money, you damn near pass a kidney stone.

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Don’t let that be you. I personally started from the cutoff amount I was willing to spend monthly and then worked it backwards towards the principal of the overall loan.

Knowing what you can and can’t afford will save you a world of embarrassment and financial burden when you get to the bottom line. Nobody wants to be house poor.

THINGS TO CONSIDER

How much debt do you have?
What does your credit score look like?

Do you want to do a 15 year fix or a 30 year fix?

Is there a chick-fil-a within 10 miles?…you know…the important things.

FIND A LENDER

Know what type of loan you’re looking to get.  (FHA, VA, Conventional) Be very particular in this process because a 3.8% APR and 4.1% is a matter of thousands of dollars difference over the span of 15 or 30 years.

To avoid talking in circles I just ask what is the best interest rate their company offers for excellent credit and if that number is too high then move on. You don’t want hella companies pulling your credit so once you’re serious about this then narrow your options down. Typically there’s a grace period that credit bureaus will allow since they know you’re shopping around for interest rates so be mindful of that as well.

Discount Points

What are discount points Lo? I’m glad you asked! Discount points give you the opportunity to buy your interest rate down. So while that 3.8% might look good, you may also have to come out of your pocket $1400 at closing to get that rate. Of course it’s all about what you want but if you don’t plan on keeping your home for that long then I wouldn’t worry about it.

Make the process work for you

Once you’ve found a Lender, you can ask to see if they have any programs that will help you along the process of finding a realtor. Sometimes certain companies have preferred lenders as well and you potentially get some money BACK from the situation for using certain businesses. By the time everything is said and done, you want to save all the pennies you can.

Documents to prepare

Certain banks may ask for different documentation but overall you’re going to need to provide the following documents before you can be pre-approved:
Paystub for the last 30 days
Tax Returns for the past 2 years
Bank statements for the last 60 days
Proof of ID (license)
Divorce decree (if necessary)
Any properties/businesses you may own
investments
Child support

It may seem like a lot but they’re just trying to get an accurate representation of your financial situation so they can see just how much you can be approved for. Once you’re approved

IT’S TIME TO SHOP!!!

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THIS is the fun part. Think about how many bedrooms/bathrooms you want. Do you want a deck? Fireplace? Do you want crown molding? Recess lighting? The possibilities are ENDLESS! Usually the bank will let you know how long their offer is on the table for so you’ll have a good idea of how long you have to get a contract.

Once you’ve found a house and fallen completely in love, make your offer on how much you’re willing to pay but keep in mind the taxes that will incur. The seller will either counter your offer or accept it and then YOU HAVE A CONTRACT!

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At that point, it’s just a matter of underwriting your contract and reverifying certain details which may require you to submit/sign the same documents. Just be patient. Once you get your closing date, you’ll know what all you need to bring (hopefully no money) and then you be free to move in!

All in all, the process shouldn’t take any more than 2 months. It all depends on how fast you,  your loan rep, and realtor work. Buying a house is a huge accomplishment and investment if you do it right. Hopefully the tips I gave you were helpful. Let me know if you have any house buying nightmares or unique situations. Thank you for reading!

XO,

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