A new year is nearly upon us! Going into the new year, it’s a great idea to have certain parts of our lives in order to make the coming year easier for our future selves. Thorough planning is also one of the easiest ways to ensure that we’ll be able to achieve any big long-term goals that we may have over the course of the next year.
What’s a big long-term goal that needs a lot of preparation—that we happen to be experts on? Homebuying!
We know how stressful, exciting, and complicated the homebuying process can be. Which is why we always strive to make the process as simple as possible for our potential homebuyers.
We consulted with our team of real estate experts for their best pieces of advice for how a hopeful homebuyer can prepare to become a proud homeowner in 2022.
Do you have any big plans for 2022?
1. Use Your Tax Refund on a Down Payment
Depending on how much you get from the IRS, you can use your upcoming tax refund towards, or even as, your down payment on a home purchase. It’s a common misconception that mortgage lenders require 20% of a home’s purchase price to be used as a down payment. Mortgage lenders actually accept down payments as low as 3% of the purchase price. That means, depending on how much you receive from the IRS, you could use your refund towards your down payment, or completely cover it.
2. 1099 Self Employed Should Consult a Tax Preparer
The self-employed may think that the homebuying and mortgage approval process may be more complicated than for those with traditional employment and access to a W2. However, while the process can be more complex, the difficulty can be greatly minimized by coming prepared with good documentation of income and good credit history.
One mistake that some self-employed individuals make is to write too many items off in their tax documentation. This can lead to trouble in getting mortgage loan approval, since writing off too many items can mistakenly show less net income than what was actually earned. A tax professional will be able to review all sources of income, all potential write-offs, and properly weigh the two against each other so that the proper amount of net income is represented. When the proper income amount is represented, loan approval will be more likely since you are more likely to prove having reliable, sufficient income for a home purchase.
3. Start Application Process Early And Talk To A Mortgage Lender
If you’re planning on purchasing a home in the spring or summer of 2022, it’s important to start the preparation for a mortgage application as early as possible, preferably around six months in advance. One of the first steps you can take is filing your taxes early. Once you receive your W2 from your employer, you should file your taxes shortly afterward, after consulting with a tax preparer if needed.
From there, you should talk to a mortgage lender who can guide you further along in the process. They can make sure that you are on the right track for loan approval and are paying close attention to other factors like your credit history.
In Conclusion
We hope our tips were helpful to potential homebuyers who have been wondering what they can do now, to make sure the homebuying process is easier for them in the future. We’re sure that all of our homebuying hopefuls will become proud homeowners over the course of the next year, with just a little extra prep work. Happy house-hunting!
If you find yourself needing additional information or help, then feel free to reach out to me directly via phone or email.
About Gerardo Zavala, Realtor
There is a true passion for connecting people with real estate that makes me fall in love with my career over and over again. While my title says, REALTOR® I think I am much more than that. For example, I am present and actively listening to my client’s needs, on the spot when things are urgent, and by your side to say “congratulations.” Most of my clients will say that I am a connection away from support no matter the situation, day, or time. In my opinion, customer service, educating the client on progress and next steps, and overall satisfaction are my top priorities. How can I help you?
