1-Year Plan to Homeownership Revealed

Whenever I meet somebody that is planning for home ownership, I often like to ask them what's their timeline, the most common timeline that I get probably over 90% of the time is about one year. So in this video, I want to help you the first time homebuyer that is planning to buy a home in one year, and you are just trying to figure out where to start. Alright, so I've broken this video up into segments. So if you want to check out specific segments based off of where you are, check out the chapters linked below in the video. The other thing is, if you dislike anything in this video, I want you to hit that dislike button. I intend to learn a little bit more about what you guys want me to create. So if you don't get any value from this video, hit the dislike button. But if you do get value from this video, do me a favor, hit the like button, because it does let the YouTube algorithm know that this information is valuable. And regardless of where you stand on this video, let me know in the comments, because I do read every comment. And I intend to create more content around information and things that you guys want to learn about. Alright, step one is going to be financial preparation, you need to get a understanding of where you're at financially, not only for your income, but also for your assets, your credit, and also your monthly liabilities. If you find yourself in a situation where your reason for wanting to buy a house in one year is due to your income, your assets, your liabilities, or your credit, what I want you to do is use this time very wisely, which means I want you to actually work with somebody who genuinely understands the financial situation you're in. And also the requirements that you're going to need to meet so that you can buy a house in one year, you maybe need to talk to a loan officer as early as now. So that way, they can tell you Hey, it looks like you maybe need to make more money, or maybe you need to pay down debt, or maybe you need to do some specific action items to increase your credit score. When it comes to assets. Typically, what I like to tell people to prepare for is about 1% to about 3% of whatever the home's purchase price is that you are buying to have set aside for closing costs. It's not something that the loan is going to require. It's just something that you want to have set aside depending on how much house that you are buying. And also depending on what you are purchasing with regards to that particular property, you may have the ability to negotiate having the seller to cover your closing costs. The next thing I want to talk about is going to be credit. Credit is going to vary depending on the loan that you're doing. When it comes to the VA loan, the VA technically does not have a minimum credit score associated with it. So depending on who you are working with is going to determine what their minimum credit score is. Because you see the VA does not do loans, the VA only guarantees the loan, which means that the lender can whatever their minimum credit score is in order for you to get a loan from them. Most lenders out there will have a minimum credit score of about 620. And then there are some like me and my team that can go as low as 580. When it comes to other types of loans, the minimum credit score can vary as well. Typically on FHA, you can see your credit score requirement being between 580 and 600. If you're going to go conventional, you'll need to be at about 620 or above. Now I want to jump over to your liabilities and your monthly debt, because this is what I think will play one of the biggest parts in regards to your ability to qualify. I often get questions about how much someone could qualify for if they made X amount of money. And the problem when I hear that question is I don't have the full context about your financial situation. Sure, you can make a significant amount of money every single month. If you have a significant amount of money going out every single month for debts, you're probably not going to qualify for very much. But I've also seen situations where a 100% disabled veteran be able to qualify for a home using just that income. For example, if your debt is making up over I would say roughly 30 to 40% of your income, then you're going to more than likely either a need to pay down and basically pay off some of that debt, or B, you're going to need to find a way to make more money and income to be able to support the lifestyle that you are trying to live. Hey, before I get into the rest of the video, I want to hear from you and what your timeline is. So if your timeline is one year like this video, let me know in the comments, maybe it's longer, or maybe it's shorter. Regardless of whatever your timeline is, I want to know so that way I can try to create more content around whatever your needs are. Another big reason why people wait to buy a home or feel like they need to wait 12 months is actually just because maybe they signed a recent lease, and they're in that lease for 12 months. Now I have two things to keep in mind of one, if you are in a lease, what you need to remember is going to be when your lease actually expires, because when you have the lease expire is not when I think you should buy a home. And here's why mortgage is paid in arrears and rent is paid forward. When you buy a house, let's say that you close on your home on January 1, your first mortgage payment is actually not January 1, it's not February 1, it's actually going to be March 1. This is because you're closing in a current month in the current month does not count. And also because mortgage is paid in arrears, you don't pay mortgage payments on the first of the next month, you pay it on the first of the month after why this is extremely important is because if you close on a house on January 1, you could potentially have a lease that ends in the month of February, but you never have to make double payments because you're going to typically have a gap between whenever your first mortgage payment is and whenever your last rental payment is. This also allows people to be able to close on a home have several weeks even sometimes a month before they have to make a mortgage payment and then be able to move without having to rush or feel like they need to move basically all in one day. Another thing to keep in mind of is if you are in a lease and that's why you're not buying a property right now, you could potentially have that lease broken and covered by the seller or by the builder. I have seen many situations where people have been able to purchase a property and their lease wasn't going to end for another six plus months and because they were in a lease, but they were buying a property that had a very motivated seller. The seller was willing to cover whatever penalties were going to need to be paid to be able to help that individual buy that property. The second thing that I want you to do on this journey is going to be identifying your needs and your wants list. Your needs are going to be things that the property must have and your wants are going to be things that the property may not have, but you would ideally like them to be there. Now with your needs, I would typically say bedroom and bathroom count are going to be primary things that I would include on that list. And then I would also have on there maybe the commute time, the school and what that school may be rated, certain amenities like shopping for groceries and other things that you maybe find yourself doing on a day to day basis. That's something that I would keep in mind of when you're coming up with that list is not so much just what's in the property, but what's around that property that provides value to your overall lifestyle. I'll give you an example. For me, I have a three year old and she loves going to the park. So we live within five minutes of a pretty cool park that she likes going to and that's an important thing for me and my family's needs. Some of the things that I would do is also plan for the future. I think a big mistake homebuyers make is they fail to plan for the future. I hear a lot of times someone thinking, okay, this is going to be my forever home, which don't get me wrong, maybe the case, but it's not always the case. The average American moves every five to seven years, and it's important to understand where you think you'll be in that little window. Now, you may be in a situation where you have a growing family like I do, and you're thinking I need more bedrooms over time. Well, you maybe don't need all those bedrooms this very second, you may need them in the next year or two years, which means it's you're better off buying a property that already has that bedroom there. The other thing that you want to plan for in regards to the buying aspect is also what does it look like whenever the time comes that you maybe move on from that property? Are you going to rent the property out if you are going to rent it out? What does that particular property allow in regards to the types of ways you can rent it out? For example, if it is in an association, or if it is in a community, they are more than likely going to have bylaws or rules in regards to the types of ways that you can rent that property out. Now, that's not everywhere. But there are some places that are like that. And if you're not planning to rent the property out, then that's fine too. You still want to know roughly what that neighborhood and that development in that area is going to look like when it comes to the timeframe that you think you will sell. Step three in this process, I want you to build the right team to help you on this journey. You see when you're going through the process, the last thing that I want you to do is just jump online, pick a loan officer or a lending company, and then just go on Zillow or Google and pick a real estate agent because you could find yourself working with somebody that sure may be licensed and somewhat skilled in the thing that you're doing, but it doesn't make them an actual knowledgeable resource as to why you should work with them. What you want to do is work with somebody who is extremely knowledgeable in a particular thing that you're trying to do. For example, me and my team focus on helping veterans achieve homeownership. And we have the resources on the lending aspect of things to be able to allow veterans to get not only the best deal possible, but to also be able to go through the process working with somebody that's helped thousands of veterans go through the process. The other thing that we do is we help connect veterans with real estate agents who are VA knowledgeable, because you not only need to work with a VA knowledgeable lender, but you also need to work with a VA knowledgeable real estate agent because the real estate agent needs to be able to understand what the property requirements are for VA loans in order for you to be able to purchase that property. They also need to know how to navigate negotiating to help veterans get offers accepted because there's a lot of myths and taboo around VA loans that many real estate agents don't fully understand themselves, which means if you're making an offer on a property and a seller's agent is pushing back on your particular offer, it's up to your realtor to be able to understand what this pushback is and how to help navigate this hurdle. So that way they can help you potentially win that offer versus just accepting what that pushback is. So if you're trying to get connected with a VA knowledgeable lender or a VA knowledgeable realtor, get connected with us. I have links down below in the description and I have the ability to connect you with someone in your local market that can help you out. Now if you're a first time homebuyer and you're not a veteran, I also have resources to connect you as well with the right people that specialize in that niche as well. The fourth thing that we're going to do is navigate the buying process. This is going to be where you are going to start looking at property whether that's scheduling showings with your real estate agent or going to open houses. You may be wanting to buy a new build property and you want to go check out some model homes. At the end of the day, I want you to make sure that whichever route you decide to go, you go there with your real estate agent. Do not go there without them. Do not go there without them sending you there because it's extremely important that you go there with representation. It's like walking into a courthouse without an attorney. That's not smart. Now when you're making an offer, here's a few things that can happen. You have the ability to negotiate, which means that when you're talking to your real estate agent, you want to ask them, what do you think I can get this property for? And do you think that I could potentially get this property at a price that allows me to also get some form of incentives from this seller to be able to cover my closing costs? Not every deal is going to present this as an opportunity, but it's important to have the conversation so that way you can identify what you potentially will be having to bring in at the closing table, whether that's more or less. Regardless of whichever route you end up going, it's important to understand whether or not you are getting the best deal for that particular property. No two property deals are alike because each seller may be in a different place and may have their property listed for different timeframes in which they may be one may be willing to accept a little bit more of an aggressive offer versus the other. Now once you get an offer accepted, the next thing that's going to happen is going to be a home inspection and a home inspection is going to be where somebody is going to go through every nook and cranny in that house, the crawl space, the foundation, they're going to look at the walls, they're gonna look at paint, they're gonna look for broken fixtures and broken garbage disposal. I literally was buying a property and I found out after my home inspection at the garbage disposal was broken, which I didn't even know when I went and looked at the house. Those are things that your home inspector is there to do to help make sure that you're buying a property that is worth what you're about to invest in. When it comes to the appraisal, the appraiser is there to only determine value. They're not going to dive into every nook and cranny like the home inspector will. And the appraiser is a third party individual that does not work for the lender or the real estate agent or the seller. They're solely there to do market research based off of recent home sales and also there to be able to provide a valuation for those recent home sales. The next thing that's going to happen is you're going to go through the loan process where you're going to have your loan be submitted to a processor and an underwriter. And what the underwriter's job is there to do is determine risk. They're there to make sure that what has been submitted in your application and your supporting documents meets whatever guidelines that are required for the loan that you are doing. The underwriter is going to ask for a lot of updated documentation that maybe you did submit when you went through the pre-approval. Things like pay stubs, tax returns, W-2s, bank statements. It could even be different letters, like a letter of explanation, for example, that you would potentially have to write as an explanation for why something happened in your financial situation. At the end of the day, it's important not to stress about those things. Your loan officer is supposed to be there to help walk you through what the verbiage needs to be and help you be able to submit the right information to the underwriter to help your loan be able to move forward along a smooth process. Now, once your home inspection is done, your appraisal has been completed, and you have had your loan reviewed by the underwriter, you're essentially going to be moving towards the closing phase. Now, typically the closing phase from the time your offer gets accepted to the time that you actually close on the property will be roughly about 30 days more or less. At the end of the day, it's up to the lender to be able to meet that contract timeline. So that way you don't find yourself in default of whatever that contract agreement was, and you're able to close on that property in a quick fashion during the closing process is going to be where you will wire whatever funds are needed to close on the property. Remember, we talked about your closing costs and it being between one to 3%. If you are required to bring money to the table for closing, you're going to typically wire that money the day prior at least, sometimes even a couple days prior to closing. So that way the money has already been there. And that way you are able to close and just get your keys in a smooth and quick fashion. Now every state is actually different in regards to the closing process. For example, in the state of Texas, you sign on a dotted line and you basically get the keys thrown at you before you even get the ink to dry. In the state of Hawaii, it's completely different. When you sign on a dotted line, it could be four business days before you actually get the keys to your home. And that's just because of how documentation is done in those different states to determine how they do things with real estate transactions. This is all I have for you guys in this video. Don't forget if you didn't get value from this video, hit the dislike button. But if you did get value, do me a favor and hit that like button. The last thing I want to leave you with is the most important thing. Jesus loves you and he paid the ultimate price for your life. So if you turn to him, trust in him and believe in him, he has a beautiful plan and purpose for you. I'll see you guys in the next one.