Step 1: FAITH – First and foremost, I don’t know what your religion is, but honey I pray before I do anything and I mean anything! SO, Pray to God and ask for guidance with every decision and step in the process of your home buying journey. You want to make sure what you’re asking for is aligned with what he wants for you. This process is not a cakewalk, it will be tough as lenders request paperwork after paperwork, which could seem aggravating but I promise you’ll see the light sooner than later. God’s timing is perfect – I promise!
Step 2: FINANCES – This part is going to be a little longer because it’s MOST important and people don’t like to talk about finances. Listen, you need to have your money in order. There will be NO frivolous spending during this process, this process is for the MOST disciplined. You need to first understand where your money stands and what your money can afford, also knowing how to budget because this is not like an apartment there will be unexpected costs that arise.
Have all of your bank account, tax documents (past 2-3 years), savings, investments, and any other income documents (if applicable) handy and ready to share with the mortgage banker because this WILL be required.
Know and understand your debt to income ratio (your monthly debt payments divided by your gross monthly income) – I hate to inform you but student loans do count even if they’re in forbearance. The maximum varies depending on your loan program, most of the time it’s somewhere between 40-50%. But don’t get discouraged this may mean that you need to pay off a credit card or two, get a co-borrower, and most definitely AVOID taking on more debt.
This one, seems simple but is actually the hardest... Create a strict budget and stick to it, you can get assistance from your accountant if need be. There are also several affordability calculators out there.
Then, you’ll need to get pre-qualified for your mortgage. You may do this by checking with your Credit Union (if you have one – usually offers the lowest rates), your bank or special programs that you qualify for. Don’t even contact a Real Estate Agent or anyone if you don’t even know how much you can spend on a home (Don’t nobody got time for that) You need to know how much you can actually spend (see steps 1-3 listed above). The lender will review your information and tell you how much they can lend, this will tell you the price range of your home you should be searching for.
Just please know what you can AFFORD, don’t live outside of your means because honey there is still life after the purchase.
Step 3: FIND – Now, it’s time to find a trustworthy Real-Estate Agent. There’s such a stigma when it comes to this but they are there to HELP you and YES they have to get paid because who works for free sis? Not me or you, so neither do they. However, you don’t pay them, they get paid compensated commission paid by the seller of the house. Real Estate Agents are knowledgeable and can provide helpful information on neighborhoods that aren’t easily accessible to the public. They also are very skilled, have knowledge of the home buying process, negotiating skills, familiarity of the different areas you may want to live in, which can be extremely valuable to you.
Step 4: FUTURE – Start shopping for your dream home in YOUR budget. This part is like love/hate. LOL, it might be helpful to create a checklist – I’m a spreadsheet kind of girl so everything was listed from the areas I wanted to live, the builders, number of bedrooms, bathrooms, the closet space, island kitchens, etc. You have to know what you want to be true for your home, what is absolutely non-negotiable, what’s important about your living area.
Things to consider:
- HOA Community?
- Swimming pools/ parks/ community centers/ etc?
- Visitor Parking
- Is it conveniently located near shops and schools you love.
Take your time, DO NOT rush this part of the process because remember this is your home NOT an apartment. Once you’ve decided, that’s when your Real Estate Agent will negotiate numbers for you with the seller.
Step 5: FOCUS – It’s not over just yet, stay focused though you’ll be happy you did.
Now you need a home inspection of the property to ensure no signs of structural damage or things that need fixing You want to make sure you document everything and I mean everything and renegotiate if needed.They’re so many loan options out there and now you’ll have to select your loan – like I mentioned earlier, they’re so many options out there, DO YOUR RESEARCH and ask for what you want (low monthly payments fixed mortgage, short term, etc.) Pay that extra and get that appraisal sis, you NEED to know the value of the house your buying. The appraiser basically determines an informs that you’re paying a reasonable amount for the house.
Step 6: SECURE the home – Now it’s closing time and you will sign your life away. LOL, but seriously you will have a day and time arranged to meet with the lawyers to sign your signature a million and one times on the required documents. Wheeeeeeeeeeew, You will receive your keys to your new home!!!!
Already purchased a house and you have any other tips, please feel free to drop them in the comments below. Just purchased a house – Congratulations love that’s a huge blessing. Thinking about or in the process – Come on, you got this!
*Here's my first home I purchased in 2017 at age 23.*