Gather your documents
Locate all of your important financial documents, whether they are on paper or digital. Regardless of the loan type, lenders will need information about you. Make copies of financial statements; bank accounts, investments, credit cards, auto loans, college loans, any other relevant loans, recent pay stubs and two years’ tax returns.
Check Your Credit Rating
Credit scores range between 400 and 800. 620 + is considered “good”. 680 + is considered “premium” and may possibly help get you a lower interest rate.
Below you will find the contact information for the 3 major credit reporting agencies to help you determine your credit rating. You are entitled to one free credit report from each of these agencies per year. It’s important to check all 3 as they may contain different information. If you find errors, report them and try to resolve them. If you need help improving your credit score, give us a call and we can introduce you to a lender who can help. Going forward, treat your credit like gold.
Savings & Debt
Try to accumulate funds towards your down payment, closing costs (appraisal, miscellaneous fees, escrow, title insurance, etc.) and expenses such as inspections. Your mortgage consultant can discuss with you how much you need for these expenses and can also advise you regarding paying down existing revolving and high interest rate debt like credit cards.
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, seek advice from a lender first! 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.