- I bought a home in Asheville, North Carolina, last year, but it came with a steep learning curve.
- I didn’t know I couldn’t qualify for a loan as a new freelancer and needed my dad to co-sign.
- If I’d gotten preapproved before I fell in love a house, the whole process would have been smoother.
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Buying my first house came with a pretty steep learning curve.
I was fortunate to be able to close on the house I most wanted in Asheville, North Carolina, in May 2020 — in a market flooded by big city buyers flocking to small mountain towns like mine — but it wasn’t all smooth sailing.
In hindsight, there are definitely a few takeaways I’ll apply the next time I consider buying a home, from navigating the search process more effectively to securing a loan less stressfully.
Having a co-signer as a backup is a good idea if you’re self-employed
In today’s gig economy, I think a lot of people would be not-so-pleasantly surprised to learn it can be hard to leverage freelance income for a home loan.
Getting approved for a home loan with self-employment income is certainly not impossible, but the process is more difficult than for typical W-2 workers.
For instance, what ended up being disqualifying for me was the short length of my self-employment history, even with a few years’ worth of tax returns on hand. I didn’t realize my freelance income wouldn’t be leverageable until my first conversation with a lender, which made it pretty nerve-wracking to have to ring up my dad and ask if he’d co-sign on the loan.
Exacerbating all the stress around the loan was the fact that I already had a house that I wanted to make an offer on, putting the pressure on my dad to make a decision about co-signing right away.
As it turns out, the process didn’t have to be that stressful.
Getting preapproved for a loan before starting the house-search process makes the whole experience easier
The idea of having a home loan sorted out before finding a house felt odd, premature, and presumptuous to me. Why talk about incurring a huge debt before even having something to spend it on?
Turns out, buying a house is a cart-before-the-horse type of protocol: You can get approved for a home loan, even if there’s no home yet in mind to buy. In fact, you should.
One of the big reasons I wish I had finalized my loan before finding a house is because of how emotionally invested I had become in my house. Every second spent hammering out the loan meant the agonizing stress of worrying someone else would swoop in and steal the house I was already fantasizing about moving into.
Don’t fall in love with a house before you know what you’re really getting
Naturally, pictures of homes focus on the more appealing aspects of real estate, with gorgeously lit rooms and sweeping pictures of the terrain, but I didn’t realize that two of the most important aspects are a little less sexy, i.e. the roof and the basement.
I wasted a lot of time in the search process pining over a gorgeous house that bore a striking resemblance to the adorable 1930s-style bungalow I grew up in.
On first viewing, the house seemed great, but a closer inspection made clear there was no reasonable way to make an offer that wouldn’t offend the seller — the house just had too many expensive problems. However, I was already so emotionally attached that I wasted time on multiple visits trying to convince myself to look past its faults. If I’d taken a more objective approach, resisting the urge to fall in love with a house before knowing its ins and outs, I might have saved myself a lot of heartache.
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