Strategizing Your Homeownership
Homeownership can be rewarding. To many, it is a paramount of pride and stability. We firmly believe that any home buyer should understand the home buying process before proceeding to look for a house. There are many factors that can affect your and your family decisions.
Financial impact is the most important. Whether you are prepared in the financial obligations, the following guidelines may help you understand if you are ready for home ownership. These set of questions are not thorough and different ones may arise because every family financial obligations are different.
Some financial obligations to consider:
- Income and Debt obligations
- Job stability
- Household budget and allocation for home purchase
- Savings for emergencies (and in case something in the house breaks down)
- Income potential
- Current credit situation
- Loan qualification
- Tax benefits and how it can shelter net income to buyer
- GET PRE-APPROVED !
Your home-buying process will begin smoothly when you know exactly how much you are pre-approved for. Knowing how much your buying power lets you know how much you can afford. If you are pre-approved for an amount, know that you do not have to max out the limits. We suggest you do not. Home ownership should bring joy and not feel financially burdened if the payment is more than your comfort level. Knowing your financial health is the first step to homeownership.
Get your financial statements ready because you will need them soon. Do not get caught up in looking for papers at the last minute. Know where they are right from the beginning.
Some of the financial statements you may need are:
- 2 years of income tax statements
- 2 years of W-2, if applicable
- Bank statements
- Other asset statements (401K, insurance policy, retirement accounts, investment accounts)
Next, the property itself has important considerations to make:
Some important factors to consider are:
- Location (easy access to major freeways, workplace, suburbs, country)
- School district, public and private schools available in vicinity
- New construction, existing home or a fixer upper
- Number of bedrooms, bathrooms, garages
- Floorplan, one level, two story
- Architectural style… Colonial, Mediterranean, traditional or contemporary
- Lot size… small lots, acreage
- Type of floors, hardwood, tile, carpet
- Location of property in community (cul-de-sac, interior lot, corner, lakefront)
- Community Amenities
It is important to rank these features in its importance order. Some has more significant effect than others. At the same time, if buying with spouse, significant other or family, get them involved at the beginning. Make a list of what is important to them and work out a compromise. Different people have variations of what a home may be like and being clear right from the beginning will cause less aggravations along the way.
Important Note: The House planning stage is dynamic. More properties that you preview will make you understand what is more important than others, even though you may have the list to begin with. It is ok to make adjustments until you find a house that will suit you and your family.