When I started my search for my first house I thought I was going to buy a condo.
I got on a call with Wells Fargo and I got a mortgage preapproval for a $175K for that condo.
I was making $48,000 a year and living in New York City.
I honestly was over the moon for my $175,000 because it was wild to me that I could get anything at all…
On top having a low salary in literally the most expensive city in the world to live in, I had over 100K of debt. 😩
Car loan..
Student loans..
Personal loans..
Credit cards…
I was the poster girl of the American Debt trap.
As you probably know…
I eventually bought a three family house and not a condo.
And got approved for WAAAY more than 175K.
The full tea on condo to three family is here.
So why did it take so long to actually buy my house?
Well…
I had no idea what I was doing.
There was no one amongst my circle in NYC who had ever bought a house let alone a multi-family house.
Heck…
No one in my immediate circle was even talking about buying houses.
We were just twenty somethings living our best lives in the city meeting for brunch at 3pm and getting back home at 4 in the morning.
I was the epitome of not knowing how the heck to get this home buying thing done.
But one thing about me is I WILL solve a problem.
I was able to piece together information scoured from the interwebs and I made that three-family house purchase happen!
Even though it was stressful AF.
One thing that I wish I had was a step-by-step guide on what to do.
We learn by doing.
So buying that first house has made every other mortgage that I have applied for a lot easier.
The next three mortgage applications have been a walking in the park relative to that first one!
Why?
Because I know exactly how to be in the best financial situation to buy a house that fits my current needs and future goals.
And I know what lenders want to see so that they are EXCITED to give me a loan.
I want you to have the same confidence when you talk to your lender about buying that first house.
Here are three things to have in order so lenders WANT to give you their money
➡️ Understand your finances
Contrary to popular belief your mortgage lender is not there to advise you.
Your lender tells you how much you qualify for based on the internal rules and regulations for that type of loan.
You can get a mortgage pre-approval for $100,000 but you don’t have to use that full $100,000 to buy your house.
And just because the bank approves you for $100,000 doesn’t mean you can afford that.
How do you figure out how much of that 100K you can actually afford to use?
Look at your monthly spending. Then decide from there how much is reasonable for you to spend on a mortgage payment.
Use that number to determine how much of a house you can buy.
NOT the amount the mortgage lender tells you you can spend on a house.
Most home buyers have no clue what’s happening with their money.
So your lender will pay more attention to you when you ask questions that make it clear that you aren’t a regular buyer because you know your finances.
➡️ Get organized
You are going to need a slew of paperwork to get pre-approved or approved for your mortgage.
Speaking to a lender without organizing your paperwork will make you want to pull your eyelashes out.
I know… because that has been ME.
Searching for documents in the middle of a mortgage transaction is STRESSFUL.
It definitely IS self-induced stress though.
I have never had a lender “pressuring” me to get a document or a seller pressuring me to close faster
But there is always that voice in the back of your head telling you that if you don’t get the loan done quickly the deal may fall through.
But for the most part, if you delay getting your paperwork to your lender, you just delay yourself moving into the house.
The lender, seller, and realtor will still get their money if you close late (as long as the seller is flexible).
But your lender is also working on multiple applications at the same time.
So if you are the borrower that submits everything on time and with no drama, you are going to stand out cause you make their life easier.
Which means your mortgage file will likely be moved faster.
I have applied for a mortgage WITHOUT having all my paperwork in order. And I have applied with everything ready to go before even speaking to a lender.
I choose being organized all day every day!
Some of the major documents you will need are:
⇨ two most recent years of tax returns
⇨two years most recent W2 forms
⇨ most recent two months of bank statements
⇨ most recent month of paystubs,
⇨ valid government ID
⇨ social security card.
➡️ Be selfish when choosing your team
Most first time home buyers go straight to a lender or straight to realtor when they decide to buy a house.
This should actually be the very last thing that you do.
Every person that is working with you in a real estate transaction is paid on commissions.
The bigger your mortgage is, the more income they make.
This is why it’s important for you to clarify your goals before talking to a realtor or lender.
And choose your lender and realtor based on YOUR needs.
Don’t choose someone cause they work with you and you want to be nice.
Don’t choose someone that you dont like just cause your mom referred them to you.
And DEFINITELY don’t just speak to one person and call it a day.
Treat finding your realtor and lender as a job interview.
Keep talking to candidates till you find the one that understands you and gets what you are trying to do.
You never got a job cause your employer wanted to be nice, so don’t pick a lender or realtor just to be nice.
Keep in mind as you interview your team that there is money on the line so what they tell you is not completely unbiased.
I’m not saying you shouldn’t trust your realtor or lender.
I am saying as you speak to your lender and realtor treat it like any other advice:
Hear it.
Apply the filter of your goals.
Then decide if you will take all, part or none of the advice.
Just because the advice is coming from a professional doesn’t mean it’s infallible.
You make the final call on what to do with the information given to you.
What action can you take today to get started?
I’ve broken down these three major steps into a checklist with twenty tiny actions to get you from lost and confused wannabe homeowner to a confident and empowered multi-family home shopper.
This is the detailed breakdown I wish I had when I was buying my first multifamily house.
If you would like a FREE copy of the checklist, DM me on Instagram and I’ll get it to you!
Which ONE thing will have the biggest impact and get you to your first multi-family house with ease – understanding your money, getting organized, or building your team?
