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Get Organized
You
should be in this section because you have been inspired to buy real
estate. So, the prospect of looking at
property is now becoming even more exciting. So, before we waste any time, energy and dollars let's look at some
additional points that should help us not become disappointed or frustrated
with the process.
Start an SP Purple File: Let Signature
Properties (SP) help you create an SP Purple File. This file should contain all of your
important financial documents. Regardless
of the loan type, lenders will need information about you. Make copies of financial statements; bank
accounts, investments, credit cards, auto loans, recent pay stubs and two
years' of 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 three (3) major credit reporting
agencies to help you determine your credit rating. Ask your lender how to improve your credit
score if it is not where you would like it to be. Then, going forward, treat your credit like
gold.
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Firm |
Web Site |
Phone Number |
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Equifax |
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(800) 685-1111 |
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Experian |
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(800) 392-1122 |
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Trans Union |
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(800) 888-4213 |
Get Pre-Approved by a Lender. There are several benefits to going the extra
mile and getting a pre-approval letter rather than just pre-qualified. First of all, you will know exactly how much
real estate you can afford. When you
find a property you want to buy, your offer will be better positioned than
someone less prepared. Finally, being
pre-approved is more efficient; it reduces the amount of time it will take your
lender to fund your loan. Be prepared to
provide comprehensive documentation, which the lender may independently verify,
including but not limited to:
- Job status
- Income
- Monthly payments
- Cash position
- Total assets and liabilities
Credit Behavior: When you are
considering the purchase of a major ticket item like a new home which you are
going to want to finance, it is not a good time to change careers, move your
money around, or buy other 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
debt payment of $500 a month such as a credit card or auto loan debt could
lower the amount of a home you could afford by about $83,000! *
______________________________________________
* Based on
a 30 year mortgage at 6% interest.
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