Unless you’re paying for your new home with cash (good for you!), the first step in buying a home is talking to a lender. We like to use the analogy that it is really hard to go grocery shopping when you don’t know how much you have to spend. You’ll need to talk to the lender to have them help you determine what price of home you can afford. So it’s time to start gathering up all your important financial documents. Here are the things your lender is going to want to know before they can give you an idea of the home price you can qualify for:
- Financial statement
- Bank accounts
- Investments
- Credit cards
- Auto loans
- Recent pay stubs
- Tax returns for two years
- Copies of leases for investment properties
- 401K statements, life insurance, stocks, bonds, and mutual account information.
If you do not have a lender you know, please contact us and we can refer you to lenders we have worked with in the past that we recommend. You do not need to have all these financial records before you start talking to a lender but eventually, they are going to need this information or at least those that apply to you and your situation.
Check Your Credit Rating.
Your credit score will have a huge impact on what type of property you can buy, and at what price. It is first recommended to check your credit rating with an experienced lending institution so that we can determine what you can afford. The lender will research your credit ratings from the three credit reporting agencies Equifax, Experian and Trans Union. We will be happy to recommend experienced, knowledgeable lenders we have worked with in the past.
Be Careful With Your Finances.
Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability. Once we have made an offer on a home and had it accepted by the seller and it is in escrow (we will discuss this in another tab) until it closes and you have the keys in your hand to your new home, DO NOT purchase expensive furniture or other things for your new home. The lender will run your credit at the last minute and might asked for updated bank statements just before closing and you don’t want that information to change or you may no longer qualify to purchase the home (wait to buy that new car or furnish your new house until AFTER closing).
