Many of us know what it’s like to feel like you’re out on your own for the first time. It can be exciting to finally be bringing in your own income but it can also bring a lot of questions about what the next steps are prior to finishing your education, whether that be high school, college or just finally moving out of your parent’s home.
Whether you are salary or self-employed makes a difference. If you’re a W2 employee, you can purchase a home fairly quickly. If you’re self-employed (you file 1099 on your taxes) be prepared to prove 2 years of work history showing profits.
- Look at your budget. Determine what you can afford. Lenders can help with this step and talking with them early on can be beneficial. They can explain what payments will go against you and count towards debt ratio and give other helpful tips that can help you purchase your first home.
- Plan accordingly. Now this step might take you 1 year or 2 years to accomplish. Try to save 3-5% and remember it’s always good to have even more than that to account for the unexpected. At least 6 months before you’re ready to purchase, find an agent. This will give you time to find areas or properties you like before the purchase of your first home. If you’re in a hurry to get into your first home, there are possible ways to speed things up. One way to speed up the process is to get gift funds from a family member or relative, but it depends on the program you use in order to determine where you can borrow from and how much you can borrow. So it’s important to discuss your options with your real estate agent.