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How to Buy a House in 2021

In Real Estate
January 21, 2021
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With the atypical year of 2020, we all found ourselves spending more time at our homes. As we turn into 2021, it may be time for some upgrades to find the perfect new home. 

Whether you’re looking for a new vacation rental property, or your family is expanding and you need a little bit more space, buying a home is a lengthy process, and you should evaluate if buying a house in 2021 is the right decision for you before diving into the home buying process. 


  1. Are you ready to buy a home? 

In order to buy a house, you need to have your ducks in a row. Your lender will need to see proof of income–with a reliable history of a stable income. Prepare and evaluate your documents: collect your recent pay stubs, W-2s, and other tax documentation. 

Evaluate your debt-to-income (DTI) ratio. Your lender will utilize this figure when determining the

amount of debt that your income can support. You can calculate your DTI by dividing your

monthly debt by your gross monthly income. Most lenders will require a DTI of 50% or less to qualify for a mortgage loan. 

Consider how long you will be willing to live in this home. If you’re looking to downsize your loan, consider a refinance to lower your payment or to use money from the equity your property has accrued. To see if this is an option for you, visit a mortgage refinance guide regarding the process. 

  1. How much can you afford for a home?

After you calculate your DTI ratio, consider how workable this figure is for you and your budget.

Consider that homeownership comes with added costs from maintenance to property taxes and

homeowner’s insurance. 

  1. Start saving for a down payment

A down payment is a large cash payment when you purchase your home. The larger the down

payment you put down, the smaller your monthly payment and lower interest rate will be. So, saving a larger sum of money for your down payment can pay off in the long run. 

  1. Find the right real estate agent

Your real estate agent will be your right hand man when it comes to negotiations with the seller. 

Finding the right real estate agent can greatly improve your housing search. Word of mouth can often be the best way to find a real estate agent. Ask your friends or family for real estate agent recommendations.

  1. Start house hunting

Create a list of your top priorities you’re looking for in your home. While it may be difficult to find a

home that checks all your boxes, take the time to look for the perfect home for your needs. 

  1. Make your offer

When you find your perfect home, you will submit an offer letter in writing. This letter will include your current details about your living situation, the price you’re offering to pay, and a deadline for the seller to reply to your offer. 

After receiving your offer, the seller will either accept your offer, reject your offer, or come back with a counteroffer. Your real estate agent will play a key role in the negotiations with the seller. 

  1. Close on your new home

Three days before your closing, you will receive a Closing Disclosure. This document informs you of the closing costs and important details of your loan–so be sure to review this document carefully! 

At the closing, you will sign even more documents: your settlement statement, which outlines the costs involved in the sale, your mortgage note, which documents your promise to repay the loan, and your mortgage, or deed of trust, which secures your promise. 

Phil Hearing | Unsplash

As 2020 increased the time that we spend at home, the value we place on our home has become more important than ever. Buying a home in 2021 can help us feel at home in a new home–whether it be near or far