The true first step in homebuying

Is contacting a real estate agent really the first step? Or a lender? Just today I saw a social media post from a first–time homebuyer looking for a realtor – who would typically refer them right over to a lender – who should ask them a series of important questions, that they may not know the answer to. It might surprise you to learn that neither of these are really the correct first steps. The very first step to buying or selling a house should be getting your financial house in order. What does that mean?

Honestly, this is some basic Economics 101, as well as financial literacy. I think most of us realize this is missing from our education, by no fault of our own. It's just not as available as would be ideal. So where do you begin? By asking yourself (and/or your partner if buying or selling together) these few questions:

What is our budget? Taking a look at all fixed monthly expenses along with variables and luxury spending – what does our monthly budget look like? What can we change or eliminate?

What can we afford? After looking at our budget, what is a monthly payment that we can afford and are comfortable with?

Should we just pay cash? Is buying with cash the smartest way to use our money, or are there other options?

How much savings do we have, and what can we add monthly while we house shop? Buying and selling a home is typically never a net zero cost. So, making sure there are some savings to start is necessary.

What are our short and long-term plans for a home? Determine the most likely and least likely plans for your time with the home – in regards to keeping it forever, becoming a rental property, career moves, outgrowing the home, etc.

What happens if we list and get a contract on our home and then find we cannot get approved or afford our next home?

These are all critical thoughts to work through long before you speak to a Realtor. Be smart, be wise; get your financial house in order first! Once you have thought through the answers to some of these questions, you need a mortgage advisor to help you with any missing pieces, as well as to understand the exact next steps, and in what order. This is not the same as punching data into a computer. This is a loan options consultation. So, if you are not offered this first, consider seeking another option. You likely won't have all the answers right away, but each one of these thought-provoking questions will put you that much closer to the clarity and the options that you are seeking to understand.

You can contact Alysha Boles at (661) 858–7214, or visit http://www.advisoralysha.com. See her ad on this page.