Home-based businesses have become much more common in recent years than ever before, and many entrepreneurs are thriving due to their ability to keep costs low. When the business starts to expand, however, there are several opportunities that can come with moving to a bigger home to allow for even more growth. An experienced pro can help you find the perfect house for your needs and budget, but before you jump in, you’ll need to do a little research and prepare for the home loan process.
When you’re ready to apply for a home loan, it’s necessary to gather tax returns, proof of renting history, W-2 forms, and bank statements that will aid in the application process. Lenders will want to see not only that you have a solid credit history, but also that you have recurring income that doesn’t fluctuate. It can sometimes be a bit more challenging for self-employed individuals to obtain major loans because of this, but if you can show paperwork from all of your income--even part-time jobs and side-gigs--it could be the difference between an approval and a rejection.
When you have all your paperwork in order, read up on the various types of home loans available to find out which one best suits your needs. Conventional mortgages are the most common, but there are also government-backed loans that require little to no down payment. Fixed-rate mortgages mean your monthly payment won’t change over time, while adjustable-rate options start out with low interest so you see some savings in the beginning. If you’re unsure of which type is best, talk to a lender about the loan you most qualify for.
Whether you’re currently a renter or have already obtained a home loan in the past, you’ll want to ensure that your credit is in good standing and that you have the funds for a significant down payment on a new place. Download a credit monitoring app to make sure the numbers are where they need to be and talk to your lender about getting pre-approved for a loan. They’ll look at your score as well as your debt-to-income ratio to ensure that you’ll be able to pay it back, so if you can pay down credit cards or medical bills beforehand, you can improve your chances of getting approved with a good interest rate.
Real estate trends fluctuate, so it’s important to get familiar with current home prices in the area and to do some research on the types of homes that are up for sale. If you live in a city with a fairly competitive market, you’ll need to be ready to put in an offer if you find a house you really love. That’s why it’s so essential to get pre-approved for a loan in the very beginning; that way, you’ll have a solid idea of how much you can afford and won’t be stuck waiting on paperwork while others place bids on a property you want.
To help facilitate a quicker sale, your current home needs to be listing-ready as soon as possible. Otherwise, you’ll be spinning your wheels trying to buy a new place and waiting to sell your home. Plus, depending on your updates, you could actually improve the value of your property.
Start by addressing any necessary repairs. Fix cracks in the walls and ceiling, add a fresh coat of paint to a few rooms, update hardware, and consider adding new light fixtures. You also need to tend to tasks like tidying up your lawn and cleaning your gutters. If you must farm this out to a pro, look for highly rated lawn care and gutter cleaning services. You want experts that have solid reviews, so check out a site like Angi to narrow down your choices.
Acquiring a home loan can be a stressful process, so it helps immensely to be prepared. Take a look at your debt and credit history to see how much you can clean things up before getting started, as every little bit helps. With a solid plan in place, you can buy the perfect home for expanding your business.
Gloria Martinez loves sharing her business expertise and hopes to inspire other women to start their own businesses and seek promotions in the workplace. She created WomenLed.org to spotlight and celebrate women’s achievements.