So You Wanna Buy a Home in 2019?
You've decided that 2019 is the year when you stop throwing away your rent money and paying someone else's mortgage. Maybe you've even made this a written resolution and saved up a down payment to show for it. But up until this point, it's just been a vision, an item on a wish list or --- how millennial of you --- a dream board. Perhaps you came close to pulling the trigger in 2016, 2017 or 2018, but the thought of getting beat out by the severe competition was just too anxiety inducing to bear. However, this time will be different because as the last strains of 2018's Auld Lang Syne faded into the midnight air, you decided this is it. This is the year. Good for you.
What You Need to Know
2019 is starting with interest rates trending lower and (once normal market activity resumes) a greater amount of housing inventory. The extreme sellers' markets of years recently passed are giving way to more price reductions and longer days on market. These are all very good signs for the buyer, first-time or otherwise. Credit availability is at its best levels since before the downturn of 2008 and while you still need to qualify to get a loan, even the self-employed borrower or the entrepreneur without a steady paycheck now has a multitude of mortgage options that allow them to jump into the market with their less-financially-complex brethren. And low down payment options remain as well; 0% down for veterans, 3% down for conforming loans, 3.5% down for FHA and 5% and 10% down on super jumbo. Speaking of conforming and FHA, new and higher limits exist for the higher-cost areas of the country. Can you find anything negative in the paragraph above? Me neither! It's still a great time to consider buying over renting.
What You Need to Provide
As mentioned above, we are still squarely in a "fully documented" world, even if bank statement and asset depletion mortgages don't follow the traditional documentation guidelines entirely. Still, for most, getting your paperwork organized is a worthwhile exercise if you plan to purchase this year. As the year gets underway, you'll want to create a folder for the following:
- 30 days worth of paystubs. If you earn bonus or commission income, save your year-end paystub from 2018 as well.
- 2 years of W-2 forms (you'll have your 2018 W-2 by the end of January).
- 2 years of Federal tax returns. Until you file your 2018's, we'll work off of 2016 and 2017.
- 2 months of bank statements. Save all pages of your statements, even if blank.
Now if you're self-employed, this list will vary, but we're happy to help you understand your specific requirements. And remember, WE LOVE THE SELF-EMPLOYED. You work hard to maintain your business and we work hard for you.
What You Need to Do
Admittedly, looking at homes is the exciting part of your search and also admittedly, that piece does not fall within a mortgage lender's purview. I'm sorry about that. However, no top-notch Realtor is going to take you out to look at property without a pre-approval letter in hand and that's where we can assist. Our pre-approval process can be entirely digital (if you prefer), it's free and it doesn't obligate you in any way. Your pre-approval is valid for at least 90 days and can be updated if necessary. The exercise, even in a worst case, is insightful, informative and confidence-instilling. In my nearly 20 years as a mortgage professional, I can attest that going through the pre-approval process is the single best step any potential homebuyer can take. It makes you serious. It makes you smarter. It makes the difference and sellers can sense it when you make an offer. So invest in your pre-approval once you resolve that you're serious about buying a home.
With diligent care, thought and planning, there's no reason 2019 cannot be the year that sees you become a homeowner. Real estate ownership is, in many high-cost areas, a fundamental pillar that supports financial freedom and we're here to help you understand what it takes to turn a resolution into reality.
Should auld acquaintance be forgot,
Robert J. Spinosa
Vice President of Mortgage Lending
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate's Human Resources Department.
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