Finding the right home can feel like a daunting endeavor, but staying organized can help the process go as smooth as possible. Having the right documents prepared and ready to go can save you from wasted time and unnecessary headache. In most cases, to get pre-approved for a mortgage you will need: proof of employment, proof of income, most recent credit report, tax documents, and bank statements. Get ahead and start getting these documents in order as you begin to think about the possibility of owning your own home.
Keep in mind that being approved for a larger loan does not necessarily mean you need to buy the larger home. Take into account your income, savings, and other expenses before letting yourself get carried away by the guest house with heated floors. A larger home usually goes hand in hand with larger monthly expenses, which can take a toll on your bank account. Investing in the size you need, not the size you can afford, can save you extra money that can be put into either an emergency or vacation fund, whichever you prefer.
Remember the Fees
Most likely, some or a lot of the money you allocated to the vacation fund will be used to pay the countless fees you encounter. In addition to the down payment, there will be closing fees, loan application fees, and in the future property taxes, homeowners insurance, moving expenses, etc. Foreseeing and budgeting for these will prevent you from being blindsided and keep you in control of your finances.
Take Your Time
A home is an investment. It is not the same as buying a new phone or car, where trade-ins come every two years. In addition to being a huge financial investment, it is also a personal investment that can carry emotional value. So you’ll want to do what you can to avoid buyer’s remorse. The best way to avoid this is to take your time and research. Research the market, locations, and the mortgage process. With today’s advances in technology research has become easier than ever. In the end you’ll appreciate knowing way too much rather than too little.