Get Started with the Pre-Approval Process
Do you need help getting started with the pre-approval process for buying a home?
Here are all the details to help you get started.
Start a File
The File should have all your most important financial records in it. Whatever the type of loan, lenders will require information about you. Make copies of your financial documents, including your latest pay stubs, bank accounts, investments, credit cards, auto loans, and two years’ worth of tax returns as the lender will require those.
Check Your Credit Rating
The 400 to 800 range represents credit scores. "Good" is defined as 620 or higher. The "premium" score of 680 or above is said to be helpful in obtaining a reduced interest rate. To get your credit rating, use the contact details for the three main credit reporting organizations listed below. If you need to, ask your lender how you can raise your credit score. Your credit score is the key to unlocking your new home door.
Equifax - www.equifax.com
Experian - www.experian.com
Trans Union - www.transunion.com
Saving & Debt
When you want to purchase real estate, you will need money for your down payment, closing costs which include appraisal cost, title insurance and escrow and prepaids for home insurance, homeowner association fees and other closing costs. To start your home buying journey, you should include you making an effort to save money but before you start paying off debt, make sure you speak with your lender first as he/she may have some guidance to give you to put you in the best financial position.
Walk the Line
It's not a smart idea to change jobs, shift money around in your account, or make large purchases. Lenders prefer consistency in all of the above areas. Therefore, it pays to visit with a lender and get their advice before making any modifications if you are thinking about making any significant adjustments. If you are tempted to purchase a costly item, take these things into account: Your ability to purchase a home could decrease by nearly $83,000* (Based on a 30-year mortgage at 6% interest rate) if you have to pay $500 a month toward debt such as a credit card or auto loan!
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