Most times, being a first-time homebuyer may seem so overwhelming as a result of all the paperwork involved. Being prepared beforehand can go a long way in making the whole process more bearable and worth your while.

Your Financials Have To Be In Order

As a potential homebuyer, it is very crucial to first of all have your financial documents ready. Normally, the lender would like to assess four major things. They are:

1. A good credit score:

Basically, a mortgage is a loan worth hundreds of thousands of dollars. From your credit history, the lender can deduce how well you deal with debt and also the possibility of making payments promptly. Before mortgage lenders offer mortgage, they would want to be certain of how regularly you would be able to make payments you already have on your loans, credit cards and auto payments.

2. A minimum of two years of stable employment:

Mortgage companies look out for stable employment of at least two years and would even make calls to confirm employment. It is normal for a lender to request W-2s for two years or tax returns in the case of self-employment, in order to get approval for a mortgage.

3. Debt-to-income ratio:

Mortgage companies would check to know the amount of your income you spend in offsetting recurrent bills such as credit cards, school loans, medical bills and auto loans monthly. In order to ascertain your debt-to-income ratio, sum up all debts for the month and divide the result by your gross income. Banks usually expect to see a ratio not exceeding 36%, that is, it should be 36% or less.

4. A strong savings account:

When getting ready to buy a home, it is very important to save as much money as possible. Normally, an initial payment lies between 3.5% and 20% of the total price of the home. You would also have to make use of savings to cover closing costs amounting to an extra of about 1%-2% of the price of the home.

The fact that your finances may not exactly be where you want currently should not in any way deter you. Building a strong employment history by maintaining a stable job for at least two years is a step in the right direction and also offsetting credit card balances as well as other debts.

Truly, the process of looking for a house or home to acquire involves a mix of emotions. The rejection of an offer tends to be personal and fill you with so much anxiety, leaving you afraid to even attempt to make another offer. This is totally normal so there is no need to panic – Relax. With time, you shall find your own home. All you have to do before beginning your search is to prepare yourself for the rejections to come, making sure not to leave any room for apprehension as a result of the rejections.

In most cases, it is quite uncommon to have a buyer’s first offer accepted. Getting a couple of rejections is pretty normal. Optimism is very necessary, and you do not have to feel sad for the homes you get, knowing you tried your possible best.



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