Now that you have started to buy, its time to get organized. A little preparation on the front end can save you time and money on the back end.
Start a Green File:
A Green File should contain all of your important financial documents. Start by making copies of all your financial statements; bank accounts, investments, credit cards, auto loans, recent pay stubs and two years’ tax returns. If you haven’t already, start saving a down payment and extra funds for incidental home buying and closing costs (i.e., inspections, appraisals, title insurance, etc).
Check Your Credit Rating:
Credit scores range between 400 and 800. Just a year ago 620 + was considered “good”. Now new rules for lenders change almost daily. I is very important that you know your credit score and how that may effect your ability to qualify for a mortgage.
Below you will find the contact information for the 3 major credit reporting agencies to help you determine your credit rating. Ask your lender how to improve your credit score if you need to. Going forward, treat your credit like gold.
Equifax equifax.com (800) 685-1111
Experian experian.com (800) 888-4213
TransUnion transunion.com (800) 888-4213
MyFico MyFico.com (800) 319-4433
Get Pre-Approved By A Lender:
There are two key benefits to getting pre-approved. First, you will know how much house you can afford. Second, when you find a property you want to buy, your offer will be better positioned than someone less prepared. Your lender may want to know some of the following information:
Job and career status
Monthly debt payments
Total assets and debts
Toe The Line:
Now is not a good time to change careers, move your money around, or buy big ticket items. Lenders like stability. So if you are considering any major changes, it pays to meet with a lender and ask them how to proceed before you make any changes! If you are tempted to buy a big ticket item, consider the following:
A $500 a month debt payment (like a credit card or auto loan) could lower the amount of home you can afford by about $83,000! *
* Based on a 30 year mortgage at 6% interest.