Buying a home, whether it’s your first, second, or third, can be an exciting time. Homeownership can bring a sense of pride. It’s something that you’ve worked hard for and can call your own. It can become your safe-haven, a place to relax, spend time with family and friends, and, most likely, the biggest purchase that you’ll make. To sum it up, buying a home is a big deal and should be treated as such.
Before buying a home, here are a few essential things that you should consider:
Determine how much you can afford. Financial experts generally advise that a total debt-to-income ratio be 35% or less and that your mortgage payment (including taxes and insurance) should not exceed 28% of your gross income. With that said, each person’s financial situation is different. A mortgage is a long-term commitment. You should make sure that you budget for a payment that you’ll be comfortable paying during the term of the loan.
Get pre-approved for a home loan. After you’ve been pre-approved, you’ll have a better idea of what type of loan and interest rate you’ll be able to get, along with what down payment will be needed and what your monthly payments will be. In a competitive housing market, sellers prefer a pre-approved buyer. A pre-approval on a mortgage generally lasts 60 to 90 days.
Find an experienced realtor that you can trust. It’s crucial to find a realtor that you feel comfortable working with and can trust.
It’s important to shop, research, and compare. Between looking at homes with your realtor, going through open houses and researching online, you’re likely to see several homes, which can become overwhelming. Having a list of “deal-breakers” and “must-haves” can help you narrow your search. For example, if you want a home that’s move-in ready, don’t waste your time looking at homes that will require a bunch of work for you to be happy. If you have kids or plan to someday, you may want to also consider school ratings, proximities to parks, and other factors that may be important to you.
AHFCU offers several home loan options. Please visit one of our branches or call 562-933-0370, ext. 45555 for more information.
AHFCU’s Home Loan Checklist
- Pay stubs (last two months), including year-to-date income
- W2s or 1099’s (last two years)
- Full tax returns (last two years)
- Pension/retirement statements (most recent)
- Social security/disability statement
- State issued ID (usually a driver’s license)
- Bank statements (last two months)
- Divorce decree (if applicable)
- Bankruptcy discharge paperwork, all pages (if applicable)
- Purchase agreement