Take A Close Look At Your Financial Picture
Proper preparation is a key to the success of any plan, and getting your finances in order ahead of an anticipated home purchase is a wise step.
At this time of the year with the holiday season approaching, many people will be taking a break from real estate, planning to get back in the market once after the New Year. Perhaps you are waiting till next year with the anticipation of new inventory becoming available.
If that is the case, take the time now to review your finances, avoid surprises, and put yourself in the best possible financial position to purchase a new home.
Get A Copy Of Your Credit Report:
Pull your credit. You can get a free copy of your credit report yearly from each of the major credit reporting bureaus – Experian, TransUnion, or Equifax. Look for a report from one of the bureaus that incudes your credit score. Check the report for accuracy, and report any errors or inaccuracies. You are looking for a credit score of 620 or above in order to consider applying for a mortgage. The better your credit score, the better the terms of your mortgage will be.
Start A Mortgage Application File:
Include the last 2 years of your tax returns, and ultimately as you move closer to a purchase you will add to this file with information such as your last 2 pay stubs, copies of your most recent bank statements, and any other relevant financial documents.
Clean Up Financial Bad Habits:
If you are constantly moving money between 5 accounts at 3 different banks, now would be the time to stop. Loan processors are not forensic accountants. Consolidate your funds for your home purchase into 1 or 2 accounts.
Pay Down Credit Card Debt:
Do not close out any accounts, but it does not look good if your credit is maxed out.
Check You Student Loans:
If your loans are deferred get a projected payment from your loan provider. Even though your student loan is deferred your lender will apply a portion of the projected payment estimate to your total debt ratio calculation.
If you have any questions concerning the mortgage process, give me a call.
Steve Madonna
Weichert Financial Services
610-566-2045
NMLS #140438
Wallingford PA Real Estate – Wallingford, PA 19086
