Once you’ve made the decision to buy a home there are some important pieces of information you need to gather if you plan to secure a loan for your purchase. When making offers on homes we recommend that our clients have a pre approval letter from a lender. The pre approval process can be daunting, however, we have referral partners in lending that we work with and refer to our clients to help take the stress out of the pre approval process. They recommend gathering the following documents which you will need to submit along with any other pieces of information that are more specific to your situation:
Financial and bank account statements for the past 3 months
Tax returns from the past 2 years
Statements for credit card, automobile and other outstanding debts owed
Mortgage statements for any real estate owned
Last 2 months of pay stubs
Last 2 months of 401k, investment or life insurance account statements
Your Credit Rating
Once these pieces of information have been gathered, your lender will research your credit ratings from the three credit reporting agencies: Equifax, Experian and Trans Union. Your credit score will have a huge impact on what type of property you can buy, and the price and terms. Now is not a good time to make sudden career changes or large purchases (read: don’t buy a car or a boat ☺). You want to approach your property purchase from a position of financial stability.
Your Down Payment
There are many options for financing a home from zero down, down payment assistance, FHA, VA and Conventional. Not only should you be budgeting for your down payment but you may also need money for your expenses in closing your loan, the appraisal from your lender and a home inspection. We can help you identify what you should be budgeting for these items so you are as prepared as possible when you find the property you want to put an offer on.