Start A Green File
A Green File should contain all 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’ tax returns.
Check Your Credit Rating
Credit scores range between 400 and 800. A score of 620 or higher is considered “good”. A credit score of 680 or higher is considered “premium” and may help you secure a lower interest rate. I’ve included the contact information for the three major credit reporting agencies to help you figure out your credit rating. Ask your lender how to improve your credit score if necessary. From now on, treat your credit like gold.
Equifax http://www.equifax.com 800.685.1111
Experian http://www.experian.com 800.392.1122
TransUnion http://www.transunion.com 800.888.4213
Savings & Debt
If you are buying real estate, try to accumulate funds for your down payment, closing costs (including appraisal, miscellaneous fees, escrow, title insurance, etc.), and expenses such as inspections. Furthermore, try to pay down existing revolving and high-interest-rate debt, such as credit cards.
Now’s not the time to make significant financial moves.
Avoid changing careers, shifting funds, or making large purchases at this time; lenders value financial stability. If you’re considering making any significant changes, it’s smart to consult with your lender first. Getting their guidance can help you stay on track and avoid surprises during the approval process. 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.
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