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Buyers Timeline

Preparation

Preparing to buy a home is a bit like preparing for a very long journey. One of the most important steps you have to take is to have your finances in order. And when it comes to owning real estate nothing is more important. The following steps may be helpful when preparing to buy a home:

Find out how much home you can afford. Before you do anything else, find out how much home you can afford. To do this, look online for a quality mortgage calculator (our website has one that works well under the Buyers tab). Mortgage calculators show you how much home you can afford based on your income, an average interest rate, and the length of the loan.

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You also need to calculate your debt-to-income ratio, which shows the amount of your income going towards paying your debts. The lower your ratio, the more likely you will qualify for a home loan. Find out if you can get a mortgage before you begin searching for your dream home.

Your credit score also plays a role in your loan eligibility. If you have a higher credit score, you will be eligible for better loan rates. If you have a low credit score, on the other hand, you should first learn how to improve your credit score before you get pre-approved for a loan.

Get pre-approved. Take the time to get pre-approved before you begin looking at homes. In fact, many real estate agents will provide you with different lenders available to sit down with you and walk you through the pre-approval process.

Going through the mortgage-approval process can be a frustrating experience, so be prepared. In addition to all of the paperwork, you have to answer a lot of very pointed questions about your income, net worth, and credit worthiness. The BEST advice we can offer you here is to be completely transparent and share every bit of financial information you can with your lender. This can help you avoid road blocks along the way resulting in a delay in closing or worse yet keep you from closing on a home at all. Some typical items requested of you by a lender at the time of application are the following:

  • Latest W2
  • Most recent paystubs (covering last 30-60 days at time of application)
  • Most recent bank statements (covering last 30-60 days at time of application)
  • Copy of drivers license
  • Insurance agent’s contact information (to set up homeowner’s insurance)
  • If self-employed: 2 years complete personal and business tax returns including K-1s and all schedules; may need P&Ls as well as 1099s if applicable.

Other fun financial facts to keep in mind from pre-approval to closing:

  • DO NOT quit your job during the purchase process
  • DO NOT transfer jobs
  • DO NOT buy a “big ticket” item, like a car, boat, new furniture during the process
  • DO NOT make any “hard to identify” deposits into your account

Find a real estate agent. Realtors know what matters to buyers and sellers in your market area. Realtors have the expertise and experience to help you build on your investment. Your Realtor is there to act as your representative, provide you with information about market prices, and help you find a home to best fit your needs and wants. View our Weichert Realtors® - Porter Properties Agents.