The first quarter of a new year is a time for life evaluation and planning. Right now, I’m hearing that a lot of people have dreams of home ownership. I’m proud to be able to say that I’ve checked that milestone off of my goal list!
I never thought I’d purchase a home 100% on my own, yet here I am. Some parts of the process were smoother than I imagined. Others…whew chile!
BEFORE YOUR HOME SEARCH
This might be one of your largest purchases and it’s wise to get some things in order.
- Save, save, save. I got tired of hearing this but I’m glad that I finally broke down and did it. Love a morning run to Starbucks? Make coffee at home instead. Love to shop? Only do so when there are significant sales. Child free? Give up your apartment and stay with family or rent a room. People raise their eyebrows at things I’ve done to cut costs. I have no regrets and each sacrifice was worth it.
- Improve your credit. You knew this already. Here are a few tips. Your credit may be good enough to get a mortgage approval but making it better can secure a lower interest rate and other perks. In a joint purchase, the other person’s credit may balance yours. As a single woman, everything needs to be on point. The first time I applied for a mortgage was in 2017. I was denied by one of my banks, but other places were willing to finance me. I decided that it wasn’t the right time and gave myself a year to get where I really wanted to be. It be like that sometimes – this is a process.
- Research lenders. It may seem like a no brainer to apply for a loan with your current bank. They already have your information and you trust them. There may be another company that will offer you a better package. For example, I have accounts with Navy Federal Credit Union. They’re known for good customer service…but they don’t usually have the best interest rates in my experience. Shop around.
- Know what you want. As a single, your opinion is the only one that matters. Are you staying in the home for 30 years? Then you may be more stubborn on features. Are you planning to hold it for a couple years then sell for profit? In this case you may be more flexible about things being exactly the way you like them inside the home. Just like when you’re dating – have your non-negotiables and things you’ll budge on. Don’t compromise so much that you wind up settling and having buyer’s remorse.
- Narrow down your area. For me this was one of the most important factors in purchasing. I could’ve gotten more bang for my buck if I ‘d moved to other cities but I’d be further away from downtown and have to deal with more traffic. My neighborhood isn’t in the best school district but as a single childless woman I didn’t care about that. Think about if you want to live in an established neighborhood or somewhere that’s up and coming. Location is strategic now and for the future.
- Choose an agent carefully. I found out that there are some shady folks in the real estate industry! If you can get an agent recommended by someone you know, that’d be great. Check the agent’s reviews online as well and read over contracts S-L-O-W-L-Y. Don’t rush anything.
DURING YOUR HOME SEARCH
This part was fun to me but there are still logistics involved.
- Don’t get turned off too easily. OK you hate the paint color in the dining room. Are you really going to walk away from the purchase because of that? Faucets, cabinet knobs, front door color, light fixtures – these are aesthetics that can easily be changed without costing a lot. Be cool and reasonable when doing home tours. If you can’t do that, take someone with you who can.
- Be clear on a budget. Your realtor may try to get you to spend more because it puts a larger check in their pocket. You may want to go over budget for a home that has all the bells & whistles. Don’t be swindled. Your mortgage payment will include the purchase price of your home AND other things like taxes, home owner’s insurance and HOA assessments. The electric bill for a condo will be much lower than one for a modern 3 level town home. Consider the entire picture of the purchase.
- Keep your emotions in check. A seller may not accept your offer on the place you wanted the most. Your mortgage company could deny financing on a particular property for many reasons. Be frustrated but don’t give up. I believe that things usually work out the way they’re supposed to.
AFTER YOU FOUND A PLACE
You’ve finally found a place that you’re willing to pay for. Great! There’s still work to be done though.
- Put up a good offer. Your agent will be able to help with this. I put in an offer above asking price because it made sense. Everything is a negotiation and I learned that my contract could include more than just an agreed purchase price.
- Give the people what they ask for. I’m talking about the finance company. They’re going to ask you for documents that you already gave them. They’ll send revisions for signature. They’ll want you to submit updates. Get it done. If you don’t your closing can be delayed and the deal can fall through. The previous owner threatened to put my home back on the market even though the issues we faced weren’t my fault. Talk about stressing…LAWD! Moving on…
- Listen to your agent. You have to trust them and their judgment even if you don’t like it. They’ll have insight on things that you won’t. When I wanted to play hard ball during negotiations (alpha female traits I swear *eye roll*), my agent told me not to do it. I didn’t want to back down but I did. It wasn’t until the very end of the home buying process that I realized how spot on she was.
- No new accounts. PERIODT. Your mortgage lender will continue to monitor your credit profile until you close on a home. Any changes can result in them pulling funding.
- No crazy cash activity. Yes, they’re monitoring your bank accounts too. If you deposit a lump sum of cash they’re going to ask where it came from. They want to know that it wasn’t a loan and they’ll ask for proof. Keep things consistent across all of your accounts.
Purchasing a home is a huge leap. It can be scary but being informed makes the difference.
Are you planning to purchase your first home in 2019?