Buying a home can be a complicated and confusing process, especially if you have never bought one before. As an agent, it is our job to make the process as easy to understand and go through as possible. Here we've broken down the entire process into an easy to understand guide you can use as a checklist! Understand the process to see if buying a home is something you really want
Step 1: Pre-Stages
Your first step is to make sure your finances are in order and get prepared to buy a home. This includes:
Credit score is at least 550
Nothing in collections (past due medical bills, utility bills, car loans expired, overdue student loans)
Note: Current payments/payment plans for those are OK! As long as they are not late and in collections
Credit card mostly paid off/ total usage under 25% at a maximum, under 10% is even better
Steady job for at least 2 years
Note: If you have switched jobs, that is fine. As long as you have had some sort of proven steady sources of income for 2 years.
Employed at your current job for at least 2 months
Debt to Income under 45%
Note: Debt to Income is your monthly expenses compared to your monthly income. This includes what your new monthly payment would be if you bought a new home. This only includes "bills" such as credit card bills, car payments, car insurance, phone bill, student loan payments, etc (this does not include gas, food, entertainment, etc). If you make $3,000/month, then you can afford a home whose monthly payments and your other bills don't exceed $1,350
A minimum of $500 in your bank account
Note: $500 is the bare minimum for some loans, to keep your options open and have the best chances, 5% of whatever you're wanting to buy is highly recommended. For a $150,000 starter home, we highly recommend having at least $7,500 in your bank account. We can make less work depending on your situation.
These items are generally the minimum recommended. The good thing about real estate is there is a lot of gray area. Contact an agent/ lender to see if you qualify for an exception. If not, then a professional can help you get to where you need to be! Usually for no cost at all.